Don’t be fooled by the unemployment figures that came out today
Millions of workers who have low paid and part time retail jobs want, need and are qualified for better paid full time jobs. The government's monthly job figures ignore these people. | Sarah Bentham/AP

It reminded me of the movie version of 1984 where the government of Oceania keeps announcing the improving figures in the production of everything from pig iron to chocolates. Only this time it was the U.S. government this morning announcing that the ever-improving jobless rate has dropped now to 3.8 percent.

What they did not announce was yet another in the continuing monthly drops in labor force participation. “As a result, the unemployment rate fell for the wrong reasons,” wrote Elise Gould, an economist with the Economic Policy Institute this morning. What Gould is saying is more people continue to leave the labor force every month than are finding a job every month.

If the government continues to calculate the unemployment rate the way it does now even if every single person over the age of 16 in the United States was out of work we could, in theory, have an unemployment rate of zero percent! The rate then does not tell us much about how many able-bodied people are actually without a job.

It doesn’t even tell us the whole story about those who are working, many millions of whom are working part-time when what they want and need is a full-time job. Nor does it tell us about the millions more who are “underemployed” in the sense that they are earning far below the amounts of money they are actually qualified to earn.

And then comes yet another enormous factor in the unemployment rate. The official figures totally ignore the millions who never had a job at all.

The official labor force participation rate, then, is a more important figure. It stands, according to the government, at 62.8 percent, meaning that a more accurate version of the official unemployment rate they should have announced this morning would have been 37 percent.

For minority communities that rate, of course, is far higher still.

But keep in mind that even the 37 percent rate is not accurate because it does not fully reflect all the eligible workers who have never had a job.

The rosy figures announced by Oceania this morning also ignore the stagnant wage growth suffered by most of those who are working. The amount of pig iron and chocolates the average worker can buy with each of their dollars is steadily going down.

If the true unemployment rate was anywhere near as low as Oceania says it is we would see robust wage growth as employers compete for the handful of available workers. Since the figures do not reflect reality, however, we see no such robust wage growth. Officially wage growth is at 3.2 percent, continuing below what the Federal Reserve says is needed to hold even with rising costs and growth in the economy – a figure of 3.8 percent.

The Federal Reserve held off raising interest rates this Wednesday. The reason they did it was that the labor market and wages have NOT reached even the recovery level, let alone the growth level.

The other factor not even considered in the monthly figures put out by Oceania is the wage gap and its detrimental effect on the economy. Gould wrote for EPI on March 1, 2018, that hourly wage data shows the gap between those at the top and those in the middle and bottom continued to increase through most of the 2000s. Wage growth, she said, continues to be slower than what we can reasonably expect in a robust economy.

In short, no one should be thinking that the 3.8 percent official rate announced this morning means we have reached full employment. We are far from it. We can expect that Trump will try to claim credit for a great economy as we get closer to the 2020 elections. The issue, of course, is “great” for whom. The reality is that the talents and abilities of millions of human beings in this country are going to waste. Unlike the people of Oceania, U.S. workers are fighting back with struggles for better wages and the right to organize. They will not allow phony figures churned out regularly by the authorities to lull them into any false sense of security.

The betting is that they will not allow Trump to use the phony figures in 2020 to worm himself into a second term. That is if we haven’t gotten rid of him beforehand!


John Wojcik
John Wojcik

John Wojcik is Editor-in-Chief of People's World. He joined the staff as Labor Editor in May 2007 after working as a union meat cutter in northern New Jersey. There, he served as a shop steward, as a member of a UFCW contract negotiating committee, and as an activist in the union's campaign to win public support for Wal-Mart workers. In the 1970s and '80s, he was a political action reporter for the Daily World, this newspaper's predecessor, and was active in electoral politics in Brooklyn, New York.