We just posted John Miller’s article on the real unemployment rate—adjusted to include involuntarily part-time workers and “discouraged” workers. The May numbers from the Bureau of Labor Statistics, using the bureau’s expanded “U-6” rate, show an astonishing 16.4% rate of unemployment. As Miller points out, “no bout of unemployment since the last year of the Great Depression in 1941 would have produced an adjusted.”
Of course, many groups of workers have already been facing official unemployment rates in the double digits—in some cases even higher than the adjusted rate of 16.4%:
As of May, unemployment rates for black, Hispanic, and teenage workers were already 14.9%, 12.7% and 22.7%, respectively. Workers without a high-school diploma confronted a 15.5% unemployment rate, while the unemployment rate for workers with just a high-school degree was 10.0%. Nearly one in five (19.2%) construction workers were unemployed. In Michigan, the hardest hit state, unemployment was at 12.9% in April. Unemployment rates in seven other states were at double-digit levels as well.
Another measure of how this downturn compares to other post-war recessions: “The current downturn has pushed up unemployment rates by more than any previous postwar recession,” from 4.9% at the start of the recession to the current (official) rate of 9.4%—an increase of 4.5 percentage points. The only post-war recession to rival the current one, the 1982 recession, had a peak official unemployment rate of 10.8%. But that was only 3.4 percentage points above the starting rate of 7.4%. And as Miller points out, “topping the 1982 recession’s peak rate of 10.8% is now distinctly possible.”
Read the full article.