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The Unemployment Rate Is Off, According to Former Head of U.S. Employment Studies

employment attorneyAccording to and employment attorneys and Keith Hall, the statistician who used to run the government’s figures on employment, we shouldn’t believe the government reports on out-of-work Americans.

As the individual who used to serve as the head of the entire Bureau of Labor Statistics, which generates the monthly job report for the U.S. government, Hall recently told reporters that the current “official” unemployment figures of 7.6% are inaccurate, and may even be 3 points below the actual rate.  This remark came to light in a recent story in the New York Post.

Although Hall is currently employed by the Mercatus Center, a right-wing think tank at George Mason University funded by the conservative Koch Brothers, he never insinuates that the Labor Dept is deliberately cheating on the numbers (as some other prominent right-wing commentator have suggested).

Rather, he argues that the unemployment rate doesn’t factor in all the Americans sitting on the sidelines feeling hopeless about the prospect of finding a job. The percentage of working-age Americans who are actually working is 58.7%, Hall notes, significantly below a peak of 63% prior to the recession and the lowest level since the early 80s. In light of these factors, Hall concludes that there are many more folk out of work than the official unemployment rate suggests.

Employment Attorneys Assess Figures

For a more accurate picture, Hall recommends looking to the labor-force participation rate, which counts both people working and those seeking work. That number has hovered around 63% in the last few years, well beneath the 66% that was about average pre-recession. While it might not seem like a huge gap, the 3 percent difference would mean there are 18 million unemployed Americans, not 12 million.

Do the math, and this puts the unemployment rate at nearly 11%. Ouch.

As an economic journalist put it: “tomato, tomahto, let’s call the job market awful. Hall also points out that the seasonal adjustments the BLS makes to the employment numbers have been skewed ever since the massive recession blew a big hole in the numbers.”

It’s worth noting here that none of these ideas and figures are exactly controversial. Indeed, Federal Reserve Chairman Ben Bernanke has indicated at several points in recent weeks that he doesn’t entirely believe the unemployment rate, characterizing it as in many ways “too optimistic a measure of the state of the labor market.” Coupled with rising rates of unlawful termination reported by workplace discrimination lawyers, and the picture certainly looks troubling.

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Emery Reddy