The Bureau of Labor Statistics will on Friday release its first monthly jobs report since the Trump regime came to power. It’s therefore a tad surprising no word has yet come from the White House commanding the BLS data gatherers and interpreters that their efforts are no longer needed. Or at least that the public should not get to see their conclusions.
The pr*sident, after all, has no respect for the work of the bureau, having come to his own conclusions about what the nation’s employment situation actually is. Given how prickly he becomes over the slightest hint of dissent, if the job market takes a downward turn during his time in office and the BLS dutifully reports this, it would be no surprise to hear him labeling the reports “fake news” and throwing a tantrum.
The man’s views about the job situation first got serious national attention in an interview Time magazine conducted with him nearly 18 months ago. Trump claimed that the 5.3 percent unemployment rate then calculated by the BLS was actually 42 percent because 93 million American adults aged 16 and older didn’t have jobs:
Don’t forget in the meantime we have a real unemployment rate that’s probably 21%. It’s not 6. It’s not 5.2 and 5.5. Our real unemployment rate—in fact, I saw a chart the other day, our real unemployment—because you have ninety million people that aren’t working. Ninety-three million to be exact.
If you start adding it up, our real unemployment rate is 42%.
As Jordan Weissman pointed out, Trump didn’t come up with that nonsense on his own.
Instead, it came from David Stockman. In case you don't remember him or weren't yet sentient when his was a household name, Stockman was budget director during Ronald Reagan's first term and favored the phrase "zero out" when discussing social program budgets. While he has long since become critical of the Republican Party's approach in a range of matters, he remains a believer in the voodoo of supply-side economics to this day.
Stockman, and thus Trump, were right that 93 million American adults were not in the labor force then. Today that figure is 95 million. Anyone not in the workforce is not counted as employed or unemployed. They have no impact whatsoever on the unemployment rate. They aren’t in the workforce because they are in school, engaged as caregivers for children or elderly parents, too disabled to work, retired, or have other reasons for not working or looking for work, including being frustrated that their search for a job has not panned out. Only those in that last category could be legitimately considered to be “out of work.”
Unemployment has fallen in the months since Trump’s pronouncement about the “real rate.” If you add up all the people who aren’t in the workforce today, they make up 37.3 percent of the adult population.
That's not the unemployment rate, however. And while there are a number of ways the BLS might choose to calculate the rate differently than it now does, no statistician worthy of the name would figure it at 37.3 percent because that’s just nuts. Neither Trump nor anybody else could put more than a small fraction of these adults to work without clearing out all the colleges and nursing homes as well as urging people who want/need to be stay-at-home parents to drop their kids off at day care so they can get jobs.
But just because Trump and Stockman botch their criticism of unemployment statistics doesn't mean that what gets reported each month as the unemployment rate doesn’t have its flaws. Indeed, economists like Paul Krugman and an array of bloggers—amateurs and experts alike—have been pointing out that the nation's headline rate of unemployment—which the BLS labels U3—is flawed and doesn’t, by itself, give a true picture of the health of the U.S. job situation.
That's not, however, because the staffers at the Bureau of Labor Statistics are cooking the books. In each of its reports, the bureau includes measures that together give a fuller picture of what's actually going on. For example, the BLS counts people as employed whether they worked 10 hours or even one hour a week in the previous month. There is plenty more that the current 4.7 percent unemployment rate papers over. The bureau also includes a measure that covers unemployment and underemployment, which it labels U6. As of December, the U6 rate was 9.2 percent.
It’s rare for that figure to even be mentioned by most media even though many economists believe it provides a better, though still imperfect, picture of the overall job situation.
The shortcomings of BLS methodology, however, would not be repaired by adopting Stockman-cum-Trump's own condescending calculation. Indeed, substituting that metric for the current ones would provide little insight into the health of the job market.
Seven-and-a-half years since the economic recovery began, the acute problems associated with the Great Recession have mostly been taken care of even though millions of American families are still putting their economic lives back together after losing their jobs, savings, and homes, as well as delaying plans such as going to college. In addition to the impacts of this residual damage, we’re still stuck with the economy’s chronic problems, the ones predating the Great Recession, such as stagnant wages, loss of well-paying manufacturing jobs, and inequality of income and wealth.
So whatever howls Trump raises Friday or upon the release of future BLS reports, you can bet the economy’s chronic problems won't be addressed by this pr*sident, a fellow who claims the real employment rate is 42 percent and Americans would be better off if they would work for lower pay.