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'Real' Unemployment Rate Shows Far More Jobless
by Jeff Cox

While the national unemployment rate paints a grim picture, a look at individual states and their so-called real jobless rates becomes even more troubling.

The government's most widely publicized unemployment rate measures only those who are out of a job and currently looking for work. It does not count discouraged potential employees who have quit looking, nor those who are underemployed — wanting to work full-time but forced to work part-time.

For that count, the government releases a separate number called the "U-6," which provides a more complete tally of how many people really are out of work.

The numbers in some cases are startling.

Consider: Nevada's U-6 rate is 22.1 percent, up from just 7.6 percent in 2007. Economically troubled California has a 20.3 percent real rate, while Rhode Island is at 18.3 percent, more than double its 8.3 percent rate in 2007.

Those numbers compare especially unfavorably to the national rate, high in itself at 14.9 percent though off its record peak of 17.2 percent in October 2009.

Only three states — Nebraska (9.1 percent), South Dakota (8.6 percent) and North Dakota (6.1 percent) — have U-6 rates under 10 percent, according to research from RBC Capital Markets.

Election battleground states paint a picture not much more flattering. Florida's U-6 number is an ugly 17 percent, though Pennsylvania and Ohio are both around 14 percent, below the national U-6 average.

The numbers come as the government prepares to release its latest reading, the July nonfarm payrolls number, on Friday. Economists expect the report show about 100,000 jobs created for the month and the traditional "U-3" rate to hold steady at 8.2 percent.

"The lack of improvement in state U-6 rates continues to be troubling," Chris Mauro, head of US Municipals Strategy at RBC, said in a research note. "While down from recent peaks, state U-6 levels remain dramatically higher than they were in 2007 and 2008."

Mauro used the numbers to demonstrate that investing in municipal bonds remains a challenge because high real unemployment rates will be a drain on local finances.

"We remain concerned about the corrosive influence that these stubbornly high U-6 rates may have on both consumer sentiment and state and local tax revenues," he said. "At current levels, these U-6 rates will continue to be a drag on credit quality."


Believe it or not, I had to really hunt to find something like this that wasn't politically tied. With the silly season going on about elections it becomes tougher to do that.

This whole dog and pony show about unemployment and what it's numbers are, is a statisticians game. It's not about real numbers, it's about how it sounds.

Just before the Great Depression, the unemployment numbers during 1929 were 3.2%. At the greatest height of unemployment during the Great Depression, the figure for unemployment stood at 24.9%. All this depends on what source you site for figures as they too appear to have been tampered with depending on who sites the stats.

Now you have this closer to real number of 22.1 percent for February, 2001. Yet all the government and politicians what you to believe it's much lower, because their jobs depend on you believing that. Historically, when the economy craters, politicians pay the price by who gets removed from office.

I would say that most reading this know someone without a job, probably more than one someone. Even during the Great Depression it wasn't that people weren't working but how many weren't compared to how many were.

As a sign of the times, a recent article showed that you can't rent a 2 bedroom apartment for minimum wage. The cost of rent requires you work two jobs or the family works that much to pay for the monthly tab.

The EPA determined that pretty much all sewage plants across the nation needed upgrading to prevent pollution. As a result water bills went sky high to pay for the upgrades. At the place I was living at the time it hit locally, my water bill went from $15 to $30 to pay for the upgrade. At the time I thought it outrageous but later learned that was a bargain. I have no idea what they went to now, as I have a place with a septic tank, grandfathered into allowance and no longer pay for sewage. I would expect were I paying for it the total water bill, including water usage, sewage, and trash collection would probably hit close to $90.

If I haven't mentioned it, electricity rates are going up. That's to cover upgrading the grid and infrastructure. So your electricity bill is going up too. Last year, it hit here. My bill would have climbed by another ⅓. I've not mentioned that the cost of energy, food, and every other nominal cost has been going up to...everything but wages.

Face it, wages have not been keeping up with times. The pressures these put on people, mean that less and less goes into keeping the economy going by buying. 70% of the economy is driven by consumer spending. When the consumer has less discretionary income, he has less to spend. At the bottom of it all, this is the economic drag. Giving tax breaks to the rich haven't worked in 30 years. This proposal to give more to them, is the very definition of insanity. Where insanity is claimed to be doing the same thing over and over, expecting different results.

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