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Millions More Unemployed
Washington, DC -
The additional unemployed Americans fall primarily into two classes: (1) those who have exhausted their unemployment benefits and (2) those who have taken lesser jobs to try to make a living in an impossible labor market. There may be other groups of unreported unemployed, such as those who either through ignorance of the benefits available or misguided ideas that unemployment compensation is "charity", do not file for unemployment benefits, but the number of those individuals is believed to be small compared to the above categories.
The Department of Labor reports as unemployed only those individuals who receive unemployment compensation in a given week. However, unemployment compensation usually lasts for only 26 weeks (6 months), and in the stagnant employment market seen over the past two years, many workers are still searching for work when their unemployment benefits run out. It is estimated that currently as many as 100,000 workers per week fall into this category. That amounts to over 5 million unemployed Americans per year that are no longer being counted.
Although most of those workers eventually find jobs, the Labor Department estimates there are presently about 3 million Americans who have exhausted their unemployment benefits and still have not found work. This is one-third again the nearly 9 million unemployed workers the Department of Labor reported last month.
The second category represents Americans who are really working but at jobs that pay significantly less than what they were making before they were laid off. They are people such as a production manager who is now working as a sales person in a department store and an engineer who is now working as a clerk in a fast food outlet. The Labor Department estimates there are presently about 3 million American workers that fall into this category.
How to count these "under-employed" individuals is a problem. They really are working, but not up to their full potential. On an hourly basis they are making one-half to one-sixth as much money as they were before they were laid off from their regular jobs. They would have remained unemployed rather than take a lesser paying job but they could not live on the amount of unemployment compensation they were receiving.
The Bureau of Labor Statistics has proposed that one-half of these under-employed workers be counted as unemployed. If that formula is adopted, there are about 1.5 million additional Americans that should be considered unemployed.
So the Department of Labor reported nearly 9 million unemployed workers last month but it estimates there are about 4.5 million additional workers that should also be counted as unemployed. That means one and a half times more Americans are in fact unemployed than what the government reports as unemployed.
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