NC State Economist Dr. Mike Walden – Will the Corect Unemployment Rate Stand Up?
The government’s latest report puts the national unemployment rate at 7.2 percent. Some critics say this rate is way too low to be accurate. N.C. State University economist Mike Walden considers whether the critics have a case.
“The government — and most people don’t know this — … produces each month six … alternative unemployment rates. The one that gets the most attention, the one you mentioned at 7.2 percent, is the most restrictive in terms of defining someone is unemployed. Very simply, to be unemployed under that restrictive case you have to not have a job, you have to want a job, and you have to have been actively looking for a job over the past month. If you don’t meet those qualifications, you’re not classified as unemployed. And, again, that’s the 7.2 percent.
“But each of the other five unemployment rates gradually relaxes those restrictions. The broadest measure is one (that) concludes anyone who is unemployed … says that they don’t have a job and they want a job. And it even includes people who say they’re working part-time but only because they can’t find ful- time work. Now, that definition of unemployment gives you a much higher number: Right now it stands at 13.2 percent.”