Congress Should Extend Unemployment Benefits Again

Back in June, Barry Ritholtz over at The Big Picture complained that "U3," the Bureau of Labor Statistics' official rate of unemployment, the one that gets reported by 99% of the megamedia and the blogmedia, is just not accurate.

It has, over the years, slowly excluded many of the factors that USED to go into how the US reported unemployment. Hence, there has been a gradual decrease in the Unemployment rate that has occurred regardless of what was happening in the Jobs market.

U3 is now comprised in a way that merely repeating it without a slew of caveats borders on fraud.

As of the beginning of this month, that bordering-on-fraud unemployment rate had risen to 6.5%.

This statistical slipperiness began in the Reagan years, when government-gathered data on a broad range of matters besides unemployment were diluted, rejiggered and sometimes vanished altogether in an effort to keep the public disinformed. Beginning in the Clinton era, however, the BLS began also to report "U6." This broad gauge of unemployment includes everyone out of work and looking, workers who are not looking but would like a job and have sought one in the recent past until they became discouraged, and people who have settled for part-time employment but would work full time if they could find a full-time job.

As Daniel Gross at Slate observed, "The U6 is sort of the summa of job angst, a shorthand tally for the aggregate of job-related frustration."

It's not the BLS's fault the media don't report U6. The number is readily available every time the new unemployment numbers come out early each month. For October, the U6 was 11.1%. Last year at this time, it was 7.9%. Is U3 or the unofficial U6 the more realistic? Depends on what you seek to measure. Ritholtz argues the best approach would be for the media always to report both numbers. That suggestion would probably be met with demurrers that including both would confuse audiences. Nonsense, obviously.

Whichever figure you prefer, the grim consequences are all around us. In June, the U3 figure was 5.5%. That month, 404,000 Americans filed unemployment claims. It had become so tough for Americans to find work that Congress passed an emergency 13-week extension of unemployment benefits in July to help keep more of them from sliding into one of those U6 categories.

The situation hasn't improved. As Kai Filion at the Economic Policy Institute writes, last week, an additional 516,000 workers filed for unemployment benefits. That's the highest level since September 2001.

As anyone who has lived on unemployment benefits knows too well, it's tough sledding. But not as tough as going without. And, if Congress doesn't act soon, many Americans will be going without.

Over 890,000 unemployed workers already have exhausted their 13-week extension, and another 1.2 million are projected to exhaust benefits by year's end. Without these benefits, the Congressional Budget Office finds that about 50% of the long-term unemployed fall under the poverty line. Congress should act swiftly to extend benefits for another seven weeks in all states, and an additional 20 weeks (for a total of 33) in states with unemployment over 6.0%.

In all the talk of bailing out this company and bailing out that industry, workers who aren't working deserve some buckets too. Otherwise, it's dead certain the ranks of the frustrated, discouraged and the impoverished will swell. This will make no never mind to the majority of Republicans in Congress. Which is just one more reason to be delighted that fewer of them will be seated there come January.

[Update]:

Jarred by new jobless alarms, Congress raced to approve legislation Thursday to keep unemployment checks flowing through the December holidays and into the new year for a million or more laid-off Americans whose benefits are running out.

The Senate's vote followed Thursday's report that laid-off workers' new claims for jobless aid had reached a 16-year high and the number of Americans searching for work had surged past 10 million.