forbes.com
U.S. True Unemployment Rate at 24.3%, Exceeding Official Data
A new study by the Ludwig Institute for Shared Economic Prosperity (LISEP) reveals a true unemployment rate of 24.3% in the U.S., far exceeding the official 4.2% rate, due to a broader definition encompassing underemployed and low-wage workers.
- What are the potential long-term consequences of a high rate of functional unemployment, and what policy changes might address this issue more effectively?
- The substantial difference between LISEP's and the government's unemployment figures underscores the limitations of traditional metrics. Ongoing economic uncertainty and the prevalence of low-wage jobs may sustain high levels of functional unemployment. Policymakers should consider adjusting metrics and policies to account for this broader measure of underemployment to better address economic inequality.
- What is the discrepancy between the official U.S. unemployment rate and the rate calculated by the LISEP, and what accounts for this difference in methodologies?
- The Ludwig Institute for Shared Economic Prosperity (LISEP) reports a 24.3% true unemployment rate in the U.S., significantly higher than the official 4.2% rate. This discrepancy arises from LISEP's broader definition of unemployment, encompassing underemployed and low-wage workers. The higher rate indicates millions of Americans struggle to meet basic needs.
- How does LISEP's definition of "functional unemployment" differ from the official government definition, and what are the implications of this difference for understanding the current economic climate?
- LISEP's methodology includes those seeking full-time work but finding only part-time positions or low-paying jobs. This contrasts with official measures that count anyone working one hour a week as employed. The differing methodologies highlight limitations in capturing the full impact of economic policies on American workers. This is causing concern about the true state of the US economy.
Cognitive Concepts
Framing Bias
The headline and introduction immediately highlight the dramatic difference between the official unemployment rate and LISEP's findings, emphasizing the 'stunning' 24.3% figure. The article frequently uses language that casts doubt on the government's data, framing the official numbers as 'overly pretty' and flawed. This framing strongly favors the LISEP's perspective and may lead readers to unduly dismiss the official statistics.
Language Bias
The article uses loaded language to present the LISEP study favorably and the official unemployment data negatively. Terms like 'stunning,' 'stark contrast,' 'overly pretty picture,' and 'harsh reality' are used to create a specific emotional response. The description of individuals working one hour and being considered employed is presented as absurd, without providing a balanced discussion of the complexities involved. Neutral alternatives would be more descriptive and less emotionally charged. For example, instead of "overly pretty picture," one could say "presents a more optimistic view." Instead of "harsh reality," one could say "a different perspective on the employment situation.
Bias by Omission
The article focuses heavily on the LISEP study's findings, presenting the 24.3% unemployment figure prominently. However, it omits discussion of potential flaws or limitations in LISEP's methodology compared to the established BLS methodology. The article also doesn't explore other economic indicators that might offer a more nuanced view of the employment situation, such as participation rates or underemployment rates beyond LISEP's definition. While acknowledging the BLS methodology's potential shortcomings, it doesn't offer a balanced comparison or critique of both methodologies.
False Dichotomy
The article sets up a false dichotomy between the official unemployment rate (4.2%) and the LISEP's TRU (24.3%), implying a simple choice between two starkly contrasting realities. This ignores the complexities of measuring unemployment and the potential for both figures to reflect different aspects of the labor market. It overlooks the possibility that both figures could be partially accurate, representing different perspectives on employment.
Sustainable Development Goals
The article highlights a significant discrepancy between official unemployment figures and the true rate of unemployment, indicating that millions of Americans are "functionally unemployed," struggling to make ends meet, and living in or near poverty. This directly impacts the ability of individuals and families to escape poverty, hindering progress towards SDG 1: No Poverty. The high rate of functional unemployment, including those in poverty-wage jobs and those unable to find full-time work, underscores the challenge in achieving decent work and economic growth, further exacerbating poverty.