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What good, then, is the Unemployement Rate metric?


THE unemployment rate is low. The jobless rate is high.
The unemployment rate paints a less gloomy picture. Among men ages 25 to 54 - a range that starts after most people finish their education and ends well before most people retire - the unemployment rate is 4.1 percent.
But there is another rate - called the jobless rate in this article - that counts the proportion of people without jobs. To be sure, some of them do not want to work. Some are raising families on a spouse's income, or are disabled, retired or independently wealthy. But others may be discouraged workers, who would take jobs if they thought any desirable positions were available.

In the latest report, for March, the Labor Department reported the jobless rate - also called the "not employed rate" by some - at 13.1 percent for men in the prime age group. Only once during a post-World War II recession did the rate ever get that high.

Even beyond measuring the strength of the current recession, the fact that we use the more optimistic unemployment rate is problematic. Often when comparing our social programs to those of European countries, we are told "Yeah, but their unemployment rate is like 11%!". In Europe, they count people who have given up looking for work, so our unemployment rates are actually comparable.

By fnord12 | April 15, 2008, 11:46 AM | Liberal Outrage