Friday, October 5, 2012

Worcester Unemployment Rate - Sept. 20

We should have unemployment and jobs figures for Worcester, but we need a statistic better than the official "U3" unemployment rate.

The BLS issues a "U6" rate that includes many categories of unemployed and involuntary part time workers that don't get counted in the U3 rate. New grads and returning housewives who've never held a job, people taking one college course or putting in a few hours on a family business, job seekers with a small military pension, etc., plus "discouraged workers" who gave up looking less than a year before. This U6 rate is running about twice the official U3 rate nationally - 15 to 16% - but is not calculated and reported out by state, much less by metro region.

What we need is not a local version of the very-misleading official "unemployment rate" but a figure that takes the U6 rate and adds in the "long term discouraged workers" figure that the government stopped collecting in 1994. <> publishes a "Shadow Government Statistics" (SGS) unemployment rate which adds to U6 their best guess at what the long term discouraged worker rate would be using the pre-1994 definitions. THe SGS rate has been going up even as the "official rate" goes down, and is now hovering around 23% unemployment nationally. What our local U6 or SGS rate would be is anyone's guess, but most regular people I talk to guess that the "real rate" in greater Worcester is something like 20%.

Most politicians, administrators, bureaucrats and professionals that I talk to don't have a clue, which is a problem. And they mostly talk to each other. The decision makers can't make good decisions because they don't understand that we have a real unemployment disaster on our hands! 6.3% sounds like almost back to normal, right? Some Republicans are speaking the truth about this, but will they keep it up if they win in November? Or will they go back to using the U3 rate to argue that things aren't so bad after all?

We need some honesty here folks! 

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