Admiral Janeway’s U3 statistic

After reviewing yesterday’s unemployment report, I went to sleep last night very uneasy.

The unease was for two reasons. First, being unemployed, broke, and isolated, one of my few comforts in life is having my cat, Admiral Janeway, curled up next to me, stretched out across me, or standing on top of me, purring and wanting to be petted. She was hiding elsewhere in the house (the weather was too wretched to be outside) last night and left me bereft and worried.

But Admiral Janeway is actually a very wise cat. I have to attribute a couple A’s I’ve gotten in my academic career, including a course grade for an introductory class in my Ph.D. program to her. She did the work for these grades; I just typed it up.

Last night, she was making damned sure I was uneasy. Because yesterday’s unemployment numbers didn’t make a lot of sense. The government was admitting that a million more jobs had been lost in the course of this recession yet claimed the unemployment rate went down. I highlighted the percent change in people being excluded from the labor force.

Calculating the U3 (headline) unemployment rate is pretty straightforward. All the Bureau of Labor Statistics does is take the number of people it counts as unemployed and divide it by the number of people in the work force. Both of these are manipulated. The U3 number doesn’t count underemployed people (who are working fewer hours than they want). And the BLS excludes discouraged workers who have found the job hunt so futile that they’ve given up searching for work.

These manipulations (among others) serve people in power–the Labor Department is part of the executive branch–by understating unemployment. I’ve long watched the number of people excluded from the work force because I’ve recognized that they were spinning the numbers this way, but hadn’t figured out what to do about it.

And yesterday, the monthly report showed a fairly significant drop in the number of people excluded. What that masked was the rate at which they’d been excluding people throughout the recession. But I’ve got it:

I woke up this morning (Admiral Janeway did eventually rejoin me) realizing that the notion of excluding people from the work force entails some assumptions that a more humane society might challenge:

  • That many people don’t want to work and have the luxury of choosing not to. This is why you would ever consider excluding people from the workforce in the first place. But in fact, Riane Eisler points out in The Real Wealth of Nations that we also exclude and devalue a lot of caring work, such as parenting or caring for relatives. This assumption rationalizes cuts to social programs even where people are working more than full time raising their own children. It means society owes nothing to the unemployed. And indeed wage earners contribute towards unemployment insurance premiums.
  • That many people only work because they have to, for compensation, in an authoritarian hierarchy. Indeed, most jobs are structured this way, so people hate going to work. But conversely, anarchist theory assumes that, and can not function unless people willingly contribute to society, because they are naturally altruistic. There’s evidence for the latter, so we can question why we are structuring our society the way we are.
  • That society has no responsibility to encourage and assist in individual self-development. If work is viewed strictly as an exchange of services for goods or money, then it is socially acceptable that some work should be menial or degrading and that we can assign this work to disadvantaged people whom we can accordingly stigmatize as “working class.” This insulates people higher on the hierarchy from menial tasks and deprives people lower on the hierarchy of opportunity for self-development.

With that, I set about creating a new U3 statistic. For this statistic, I make different assumptions. In my U3 statistic, when people enter the labor force, they don’t leave until they die. In our present society, people leave the work force because:

  • they become disabled, which does not reduce the amount of work needing to be done;
  • because they retire, but if they are truly enjoying their work, they get a good feeling for contributing to society, and they are truly developing themselves as work should do, why would they do this?
  • or because they die, which means both that society need no longer support them and that they can no longer contribute.

I calculate the number by adjusting both the number unemployed the work force size for increases in excluded workers and decreases in civilian non-institutionalized population 16 years of age and over. I only make these adjustments in the directions indicated. I am using the BLS number for unemployed people and assume that neither the labor market nor the number of unemployed is ever smaller than BLS says it is.

(UPDATE: I have concerns about this methodology and have come up with, I think, a better one.)

This U3 still doesn’t adjust for underemployment or properly for discouraged workers. That would be an adjusted U6. And I haven’t even looked at BLS’s methodology for the U6. I believe John Williams has a different methodology for measuring discouraged workers. I haven’t looked at that either. And this U3 certainly doesn’t adjust for Eisler’s caring workers.

Even so, it still shows January unemployment in the double digits, at 10.15 percent (BLS 9.69 percent). The peak came in October, at 10.57 percent (BLS 10.15 percent). In the annual numbers, 2009 unemployment at 10.94 percent (BLS 9.25 percent) just edges out the previous peak in 1982 at 10.92 percent (BLS 9.69 percent). The differences are small, but Admiral Janeway has just curled up in my lap. I’m guessing she approves this as a first step.

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