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Happy Labor Day! Or Is It?

August 27th, 2012

As America gets ready to spend a three-day weekend bidding bon voyage to summer — and celebrating what has traditionally been a holiday devoted to working men and women — is it really a happy Labor Day?

After all, how many of America’s men and women are actually working?  How many of them want to be, but aren’t?

The mainstream media keeps telling us that the job market is on the rise because the unemployment rate is going down.

But there’s a big difference between a lower unemployment rate and fewer people out of work!

As of July 2012, the nation’s unemployment rate was 8.1%.  However, that 8.1% only accounts for people who are filing for unemployment benefits.  All of the people who have reached the end of their benefits are not factored into that calculation.

How many people are we talking about?

By the end of 2011, more than 5.5 million Americans had exhausted their unemployment benefits.  And, remember, that’s after Congress extended the federal benefit period to 99 weeks (almost 2 years).  Some states are in such poor shape that they qualify for additional benefits, so some Americans are getting 125 weeks of unemployment (almost 2.5 years) — and they’re STILL maxing out!

Plus, our employment rate also ignores one other very important thing — the “nonemployed”.

People who have stopped looking for work are considered “nonemployed” instead of “unemployed”.  As a result, they’re not a part of the 8.1%, either.

How many people fall into that category?

It’s hard to say exactly, but many experts are trying to calculate a number.  In fact, Antony Davies, an Associate Professor of Economics at Duquesne University and an Affiliated Senior Scholar at the Mercatus Center at George Mason University, evaluated the numbers back in May.  Back then, America’s unemployment rate sat at 8.1%.  According to Davies calculations, though, if the “nonemployed” were factored in, the unemployment rate could be as high as 11.5%!

So, is it really a happy Labor Day after all?

 

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