Newest Federal Numbers Show Lowest Employment on Record

Despite Job Creation, Unemployment Reigns

by Wes Markham on May 25, 2011

According to the latest U.S. Labor Department’s Bureau of Labor Statistics, the last 14 months have shown a slow but consistent increase in private sector job creation. The 268,000 new payroll positions added in April, however, were still not enough to counteract a rise in the official unemployment rate, which jumped from 8.8 percent to 9 percent. More than 13.7 million people still remain jobless.

Despite indications of potential long-term recovery, the BLS report hides a disturbing data point – the percentage of unemployed workers may actually be 15.9 percent, according to Line U-6 of the “Alternative Measures of Labor Underutilization” table. While the official number only tallies those registered for unemployment, the discrepancy of 6.9 percent includes all persons marginally attached to the labor force and “discouraged workers” – unemployed citizens who have stopped searching for work because of a lack of perceived job opportunities. Part-time workers looking for full-time employment also count as the “unofficially unemployed,” as are those whose unemployment benefits have run out.

Though a surprising statistic to some, the real unemployment percentage is actually lower than the staggering 17 percent reported last year in April 2010. One positive indicator of economic recovery may be the decrease in discouraged workers. Over the last year, this number dropped by 208,000, indicating a hopeful change in attitude towards the job market in Texas alone. While 989,000 discouraged job seekers are still estimated to remain out of work, continued job creation can only continue to instill confidence in an eventual economic recovery.

Government jobs are in short supply as beleaguered state and local governments slash funding in desperate attempts to balance budgets. April’s loss of 24,000 positions – 14,000 at the local level — may seem miniscule when compared to the overwhelming millions already out of work. In the face of revenue loss, federal budget cuts, and mounting debts, recently unemployed workers from the public sector are seeking private jobs, adding to the mounting issues.

By definition, ‘discouraged workers’ do not seek jobs because they believe no jobs are available. Many also cite personal obligations, such as family responsibilities. Some have turned to schooling or education to fill the interim between jobs, but taxed and underfunded educational institutions are a risky proposition. Many potential students see thousands of dollars in student debt as a major mistake in an economy where jobs for existing graduates are scarce.

Though experts and economists alike predict an upturn in the American financial landscape, without a confident change in employment statistics, the number of discouraged workers may continue to rise, even as more jobs become available for those actively seeking employment.