There’s Unemployment, and Then There’s Unemployment

I have been sent this Reuters story from yesterday umpteen times, so I may as well post it, as well as the underlying graph. The gist: If unemployment were being measured the same way as it was during the Depression, the U.S. would be well on its way to similar numbers.

Check the SGS line in the following graph from John Williams’ ShadowStats:

Chart of U.S. Unemployment

Eye-opening, is it not?

A few quick comments:

  • Unemployment by SGS’s measure is at almost 18%, but it’s also not been under 10% in recent history.
  • The whole idea of employment/unemployment has changed a great deal over time, with, for example, there being more part-time and flex work etc., messing with figures.
  • The existence of a social safety net has, for better or worse, made it possible for people to withdraw permanently from the workforce without having to live on the streets.
  • There is no denying that there are far more able-bodied people out of work than the skewed-low U.S. BLS figures purport to show.