January’s 8.3 percent unemployment rate is nothing to be excited about, according to Mitt Romney.
In his victory speech Feb. 4, after the Nevada caucus, Romney said, “This is the 36th straight month with unemployment above the red line [President Barack Obama’s] administration drew. And if you take into account all the people who are struggling for work or who have just stopped looking, the real unemployment rate is over 15 percent.”
Is it true? Is the “real” unemployment rate nearly twice the 8.3 percent the Bureau of Labor Statistics reported earlier this month?
Kind of, but not really.
That’s a hefty argument but let’s break it down.
Romney (and Newt Gingrich for that matter) claims the unemployment rate is actually higher because the reported 8.3 percent doesn’t include certain people, like the ones he mentioned on Feb. 4.
That’s true; the total unemployment rate doesn’t take those people into account.
That being said, BLS doesn’t include people who have given up looking for a job for a reason: It defines “unemployed” as someone actively looking for work.
So these people fall under the “not in the labor force” category. BLS has separate statistics on this population called the underutilization statistics.
It looks like this is where Romney got the 15 percent—the U-6 metric that measures the total unemployed, the part-time employed who want full-time work, and people who recently gave up looking for work.
So what does this mean? Essentially, Romney’s right but the phrase “real unemployment rate” is misleading.
Mathematically speaking, the U-6 measure will be—and has always been—higher because it’s broader; this data looks at a larger chunk of the population.
In a similar study, The Washington Post’s Josh Hicks compared the unemployment rate with the U-6 measure over several administrations. He found that the U-6 measure always overtook unemployment, especially when the economy suffered.
It’s an issue of framing. The numbers look distinctive depending on the context in which they’re examined (the context being how one defines “unemployed”). Overall, unemployment and U-6 measure specific aspects of the same data. It doesn’t change the fact that both measures decreased over the past months, indicating a gently recovering job market.