Summary of U.S. Real Unemployment – May 2011
by Leo Hindery, Jr., Chairman of the Economic Growth/Smart Globalization Initiative at the New America Foundation
Our Summary of U.S. Real Unemployment makes these three important adjustments. It also identifies average weeks unemployed, job openings, and the “Jobs Gap” that needs to be filled in order to be at full employment in real terms. As adjusted, in May:
- The number of real unemployed workers in all categories increased by 454,000 workers to 29.3 million, a figure which remains more than twice BLS’s official figure of 13.9 million. The private services sector increased by 80,000 jobs; government employment, mostly state and local, declined by 29,000 jobs, the seventh monthly decline in a row; and, most relevant during this prolonged economic recovery, the all-important manufacturing sector fell by 5,000 jobs, while construction employment was again essentially flat with no medium term uptick
- Thus, the real unemployment rate is 18.2%, compared to last month’s real unemployment rate of 18.0% and to BLS’s official rate for May of 9.1%.
- The number of real unemployed workers has increased by 12.6 million since the start of the Recession in December 2007, and since December 2008 by 4.7 million.
This post-Inauguration job-loss figure of 4.7 million and the Jobs Gap figure that follows are of significant political import as we approach the 2012 Elections. Over the last 80 years or so, the unemployment ‘hurdles’ that must be overcome, so to speak, in any quadrennial national election are a BLS official rate of no more than around 7.2% and, most telling, a real unemployment rate of no more than around 9.5% to 10.0%.
- The all-important Jobs Gap that must be filled is 21.3 million jobs. To put this figure – and the magnitude of its challenge – in perspective, the economy needs to add at least 150,000 (some say 200,000) new private sector jobs each month simply to keep up with population growth.
The average number of weeks unemployed is at least 39.7 and the number of workers unemployed a half year or longer is at least 10.8 million (i.e., BLS’s official figure of 6.2 mm plus the 4.6 mm discouraged workers). Each figure remains unprecedented in modern times, and when considered together, they are always a much better measure of the real employment condition than BLS’s weekly “initial jobless claims” number.
Compared to other nine recessions and recoveries since the Second World War, recovery from the Great Recession of 2007, which very much continues for millions of workers, especially for the long-time real unemployed, remains hindered by our nation’s large trade deficit in oil, the large and again growing manufacturing trade deficit with China, and federal tax policies that fail to incent job creation here at home.