Unemployment Figures of 4% is the Biggest Lie and Cover up
While the official unemployment rate is a widely used economic indicator, it does have significant limitations that can lead to an incomplete picture of the job market:
Limitations of the Official Unemployment Rate
- Excludes Discouraged Workers: The official rate doesn’t count people who have given up looking for work, potentially understating true joblessness.
- Ignores Underemployment: Part-time workers who want full-time work are counted as employed, masking underemployment.
- Quality of Jobs Not Considered: Low-wage or temporary jobs are treated the same as high-quality, full-time positions.
- Long-term Unemployment Not Highlighted: The duration of unemployment isn’t captured, obscuring persistent joblessness issues.
- Marginally Attached Workers Omitted: Those who want work but haven’t searched recently aren’t counted.
Alternative Measures
- True Rate of Unemployment (TRU): A more comprehensive measure developed by LISEP shows a much higher rate of functional unemployment –
24.6% as of May 2024, compared to the official 4.0% rate.
- U-6 Rate: The BLS’s broadest measure includes discouraged and underemployed workers, typically running several percentage points higher than the headline rate.
Implications
- The gap between official figures and more comprehensive measures suggests the job market may be weaker than headline numbers indicate.
- Policymakers and analysts increasingly recognize the need to look beyond the official rate for a full picture of labor market health.
Pair this with the national debt of 34 trillion USD and annual interest payment the country pays, there is nothing to be exuberant about.
