The Unemployment Rate Debate: 42% versus 5.1%

By: John Rossheim 

The national unemployment rate has been a hot topic of late.  And it will likely remain in the headlines as the presidential race ramps up.

GOP presidential candidate Donald Trump recently disputed the Bureau of Labor Statistics (BLS) unemployment numbers, claiming that the real unemployment rate is 42 percent. Days later, the BLS announces that non-farm unemployment in September was 5.1 percent, same as August.

What gives? What accounts for the huge gap in measures of how many Americans can’t find work? And how can your company use the most talented among the statistically missing to close those hard-to-fill job openings?

Trump’s number might be based on a blog post by David Stockman, director of the Office of Management and Budget during President Ronald Reagan’s first term, in which he calculates the “real unemployment rate” for 2014 at 42.9 percent. Many experts and just plain folks won’t accept Stockman’s assumption that full employment means every American working 2,000 hours a week from age 16 to 68.

Many also question some of the categories of out-of-work Americans that the BLS does not count as unemployed. For example, if you’ve been seeking work unsuccessfully for most of the past year but haven’t looked in the last 4 weeks, you don’t count as unemployed.

Politics and government statistics aside, here are three groups of able workers who aren’t counted in the BLS’ most-followed measures of employment, but may be worthy of your consideration as top talent gets harder to nab in an economy where unemployment is – can we agree on this? – lower than it was 5 years ago.

  • Working people who give up their jobs for family reasons. Josh Levs, a former television correspondent, recently settled an EEOC complaint against CNN over differing paid leave policies for mothers and fathers. Another company’s loss of talent to potentially actionable personnel policies could be your gain to hire the best candidate out there for that mid-career position.
  • Part-time workers who seek full-time work. In September, 6 million workers were laboring part-time not by choice but because they could only find part-time work or their employers had cut back their hours due to slack business conditions. Meanwhile, marquee employers like Starbucks, Uber and, as announced days ago, Amazon are dividing what traditionally have been full-time jobs into part-time, “on demand” gigs. This leaves a cohort of millions of workers with diverse skills at varying levels who would jump at the offer of a full-time position at your company.
  • Active-duty military who will soon separate. They aren’t counted in BLS civilian employment statistics, but tens of thousands of the United States’ 1.4 million servicemen and women  are separated from the armed forces each year with diverse skills that are transferrable to civilian work. Programs like the just-announced Onward to Opportunity aim to prepare new veterans to transition their skills to civilian employment. Today’s Marine counterintelligence officer could be your cybersecurity specialist tomorrow. Find out more about hiring veterans with the Monster 2015 Veteran Talent Index.