It used to be that you were in the labor force if you had been looking for work some time in the last four years, but that was changed to one year in the later Clinton years. If we use that older and more reasonable standard, the unemployment rate would be at least more than one percentage point higher.
If you are on disability, you are not considered to be in the labor force either. As of April, we have added 5.5 million people to the disability rolls since the beginning of 2009, several million above the previous trend. There are now roughly 9 million people on disability. In 1992, there was one person on disability for every 35 workers. It is now about one for every 16 workers. It is hard to believe that so many people have become disabled; disability has literally become another fallback position for people out of work. If disability had stayed at the pre-recession growth rate, unemployment would be at least one percentage point higher, leading to a true unemployment rate much closer to 10 percent and perhaps significantly more.
Underemployment is still in the range of 16 percent, and that does not count people who have a job for which they are overqualified or who are making much less money because they are aren't working in their chosen field. John Williams at Shadowstats, who uses the U.S. government methodology from 30 years ago, tells us that the U-6 unemployment rate is around 23 percent. The difference is in how you create the model. The feds keep changing the rules, and it should be no surprise that with each new rule the number of people officially counted as unemployed drops. If you can't find a job, whether officially employed or not, you are still out of work. Far too many workers have been idle for extended periods, and it is crucial to get them back into the labor force before their skills atrophy and their earning power shrinks permanently.
Then there is well-being. Fifteen percent of the U.S. population lives in poverty. Some 44 percent of the 46.2 million poor Americans are in deep poverty, making half the poverty level, defined as $22,811 for a family of four. Fifty-four percent of the long-term unemployed who have found jobs have had to accept lower pay. The typical family is back to where it was in 1995. Median income in 2011 has fallen to $50,054, the fourth straight year of the decline in well-being. Fifteen percent of Americans are on food stamps, compared to 7.9 percent from 1970 to 2000. Some 400,000 people per month have been signing up for the programs over the past four years. In August, nearly twice as many people went on food stamps (173,000) as found a new job.
One-third of homes are worth less than their mortgage debt. Values remain 30 percent below the 2006 peak and now match the level of a decade ago.
No wonder the country is unhappy with its direction, as Americans do not accept the inevitability of American stagnation or indeed of Obama's re-election.
In the debate, the president asked for patience, but he has become a prisoner of unfilled promises. Soon after his inauguration, he declared in a TV interview, "You know, a year from now, I think people are going to see that we're starting to make some progress, but there 's still going to be some pain out there. If I don't have this done in three years, then there's going to be a one-term proposition." A few weeks after that he said, "It's an agenda that begins with jobs." A month later, he told us that not a day goes by that he doesn't wake up thinking of jobs and goes to bed at night thinking of jobs. But now he just assigns most of the blame to George W. Bush, without reminding everybody that he accepted responsibility for putting America back to work. In Warren, Mich., in July of his first year he said, "Now my administration has a job to do as well and that job is to get this economy back on its feet. That's my job. And it's a job I gladly accept. I love those folks who helped get us in this mess and then suddenly say, 'Well, this is Obama's economy.' That's fine; give it to me."