(ThyBlackMan.com) When you understate the number of unemployed, which leads to understating our unemployment rates, people can literally go hungry, as they are underserved when it comes to potential and real federal government benefits. It is super important to get our unemployment rates right, so that the unemployed are not invisible. They should be readily visible to policymakers, to voters and the general public. Real data can lead to “real” solutions. Using real data, policymakers can actively address our unemployment situation and actually solve it.
The inability of a statistical survey, especially one that is official, such as our monthly jobs report, to capture the full picture of what is going on in our economy, when it comes to joblessness, leads to systemic racism. Objectivity and who is measured, and which unemployment rate category is presented as the “Official Unemployment Rate,” when it comes to the Bureau of Labor Statistics (BLS) reports is the subject of much criticism. THE TRUTH MATTERS, in the calculation of idle workers in our economy, who want to work. Although, the jobless rate is just one measurement of our economic progress; nevertheless, it is a vital one, given the role that employment plays in our economy.
The Bureau of Labor Statistics (BLS) admits its current configuration of Alternative Unemployment Measurement categories, where the U-3 category is identified, as the official unemployment rate lacks comprehension ( http://www.bls.gov/news.release/empsit.t15.htm ). That of course leaves the door open for the Biden administration to add clarity when it comes to our unemployment situation. Biden can change the “Official Unemployment Rate” category of U-3 to U-6, which is the most comprehensive of the rates (click on the link), which most economists recognize as the real unemployment rate, anyway. Here is what the BLS says, regarding comprehensiveness when it comes to our unemployment rates:
“The Bureau of Labor Statistics believes that the range U-1 through U-6 represents a useful, though by no means fully comprehensive, set of alternative measures of unemployment and labor market underutilization. Users will want to examine this set and perhaps create some sets of their own. Indeed, the Bureau “ENCOURAGES” such efforts” ( https://www.bls.gov/opub/mlr/1995/10/art3full.pdf ).
Former President Clinton’s Secretary of Labor, Robert Reich, in the following statement commented, in an April 9th e-mail to my blog, thefixthistime.com/about/, on the redesign of the unemployment rate categories, which were done on his watch. In his comments, he defers to the BLS, without admitting the U-3 category, or the official unemployment rate lacks comprehensiveness. He states, he had no role or input as the Secretary of Labor in the selection of the U-3 category, as the official unemployment rate. He takes no position on the changes. However, as stated above, the Bureau did encourage such involvement. Here is his statement:
“The Bureau of Labor Statistics is a statistical agency whose independence from politics is critically important to its credibility. Neither I as Secretary of Labor nor President Clinton intruded on that independence. The BLS decided and continues to decide how the nation’s unemployment rate is defined, measured, and explained to the public.”
If you read the PDF at the above link, the October 1995 article by Bregger and Haugen, who represented in-house economists at the BLS at the time the redesign was done, you will find these insightful comments on page 24:
“This (U-6) is the most comprehensive of the new range of alternative measures…” of the rate of U.S. unemployment.
Based on the above comments, there is nothing prohibiting the Biden administration from changing the official unemployment rate from U-3 to U-6, except President Biden. There is no reason for U-3 to continue to be our “Official Unemployment Rate.” If he makes the change, he will join a list of well informed and knowledgeable advocates, who have publicly gone on the record saying essentially U-3, the current “Official Unemployment Rate,” is ill-suited, and narrow in scope as a comprehensive monthly rate of joblessness.
Janet Yellen, the Secretary of the Treasury, on February 18, 2021 in an interview on CNBC, commenting on the nation’s January unemployment rate said, “We have an unemployment rate that if properly measured in some sense, is really close to 10%.” The U-3 category rate, Biden’s official jobless rate for the month of January flashed 6.3%, while the most comprehensive and real unemployment rate, U-6 was 11.1%.
Jerome Powell, the Chairman of the Federal Reserve at the Federal Reserve Open Market Committee news conference on January 27, 2021 said, “The real unemployment rate is close to 10 percent (for December) if you include people that have left the labor force.” At that time, the U-3 official rate was 6.7%, and the U-6 rate was 11.7%.
Biden’s Chair of the Council of Economic Advisers, Dr. Cecilia Rouse, on April 2, 2021, stated, she felt the March unemployment rate was around 9 %, rather than the 6% official unemployment rate Biden was touting. The U-6 rate clocked in at 10.7%.
Then there is the Balance, a business web site of some stature, which tracks the BLS monthly unemployment rate, and identifies the U-6 category as the real jobless rate, dismissing any reference to the U-3 category as being comprehensive of our unemployment situation.
So, we have a problem, a president who claims to be supportive of working-class Americans, who is intentionally or unintentionally openly condoning de facto and systemic racism, when it comes to our monthly “Official Unemployment Rate.” De facto racism is defined by Merriam-Webster Dictionary as, racism being in effect but not formally recognized. Systemic racism happens when racial discrimination embeds itself in our institutions, such as the Department of Labor, of which the Bureau of Labor Statistics is a part.
De facto racism is devious, based on its definition, because it hides racism. My objective in revealing it to you when it comes to undercounting the unemployed ought to be obvious. By “improperly counting the unemployed,” as Yellen says, which is what Biden and the Democratic Party is doing, all Americans suffer. Therefore, how can it be called racism if all unemployed working-class Americans suffer? It would appear to the casual observer, that Black Americans have not been singled out. But notice in the definition of de facto racism, when such racism is in effect, it means racism is “actually” being applied or is in use, but it is not being recognized, as RACISM.
Under Biden’s count the black rate which is always 5-6% higher than the real national average and is the highest unemployment rate of any worker group is never, and I mean never publicly revealed. Biden in using the U-3 category, which narrowly defines the nation’s unemployment situation is in essence hiding from you, me, and the public the most comprehensive rate of unemployment, U-6, which is based on factual data, and should be the “Official Rate of unemployment.” U-6 in March was 10.7%.
In doing this he is also hiding the “REAL” black unemployment rate. Before reading this piece, did you know the Black American unemployment rate is, as high as 16.7% for March? I guarantee that 90% of America does not know. It is what you could call a whisper number, always cloaked in silence, and never openly discussed. That which is never PUBLICLY revealed is never properly funded, or politically addressed, and that which is never properly funded, never gets the benefit of a real solution. Isn’t this de facto RACISM, by definition? The 16.7% jobless rate means in the month of March; seventeen out of every 100 Black Americans were unable to find a full-time job.
The BLS will announce on Friday, at 8:30 am, May 7th, our unemployment situation. Will the Biden administration continue to practice de facto racism, by using U-3 as the “Official Unemployment Rate?” He and the Democratic Party rail against racism, at every opportunity they get. Biden, in his recent speech to the nation spoke passionately about systemic racism. Additionally, this administration tells us time and time again, we are data driven and listen to the experts. The experts, when it comes to the issue of making U-6, which is the real unemployment rate, the nation’s “Official Unemployment Rate,” are speaking and have spoken loudly over the last several months. Again, THE TRUTH MATTERS, in the calculation of idle workers in our economy. Isn’t it time for Mr. Biden, and his team to acknowledge the truth and practice what they are preaching?
Staff Writer; James Davis
Mr. Davis is a leading expert and consultant in Financial Analysis and Social Dynamics. He is a graduate of Florida A. and M. University (FAMU), a former stockbroker, and a human rights activist who resides in Sanford, Florida. He was awarded the prestigious Governor Haydon Burns Scholarship to attend FAMU and while at FAMU was awarded the first Martin Luther King Scholarship. He is the author of three books, among them is “The Fix This Time,” Boost Your Retirement Income! Simultaneously Create Jobs and Spur Economic Growth (https://www.amazon.com/dp/B00MI3PD2M).
Mr. Davis can be reached through his blog @ https://thefixthistime.com.