A Gallup poll released this morning corroborates the calculation of unemployment that I’ve been using and publishing since the beginning of the recession – that unemployment and underemployment are closer to 20%, as opposed to the official government figure of 16.5%.
In findings that appear to paint a darker employment picture than official U.S. data, Gallup estimated that about 30 million Americans are underemployed, meaning either jobless or able to find only part-time work.
… The poll’s estimate of U.S. underemployment is higher than official statistics. The Labor Department says 16.5 percent of American workers were without employment or worked part-time for economic reasons in January against Gallup’s 19.9 percent.
… Gallup surveyed more than 20,000 U.S. adults from Jan. 2 to 31. The results have a 1 percentage point margin of error.
My own calculation of underemployment, which the Labor Department calls “U6,” is 20.8% – within the Gallup poll margin of error. My calculation holds the labor force at a fixed percentage of the population, as opposed to the government method of assuming that the unemployed can simply drop out of the labor force at a time when employment is most desperately needed – a tactic employed every time the economy sinks into recession in a bid to prop up consumer confidence.
Here’s my calculation again, along with a chart of the results:
With weekly first-time jobless claims continuing to run in the 450-500,000 range, it’s not likely that we’ll see any meaningful improvement in unemployment, at least not real unemployment – the kind the government doesn’t report.