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The Real Unemployment Rate

Let’s stop kidding ourselves. The sugar coated headline unemployment rate reported by the government is completely bogus. The real unemployment rate buried in the Federal Government’s data tables, including discouraged workers and those who are considered marginally attached or working part-time because they cannot find full time work, is now 12.2%, the highest it has been in 15 years. This number is up 33% over the past 12 months.

Click to enlarge
Click to enlarge

For those egonomists who claim that this is nothing like the Great Depression, because then the unemployment rate was 25%, stick this in your pipe and smoke it. Where was the unemployment rate in 1930, the year after the market crashed? According to the BLS, the unemployment rate for all of 1930 was 8.9%. Admittedly, there’s no information on how that statistic was calculated, but those economists who say that today’s recession is nothing like the Great Depression. By this one measure at least, given the timing. Today’s deterioration is at least as rapid, and probably more rapid, than the beginning of the Great Depression.

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  1. Pretzel Logic

    You nailed the point exactly. We haven’t bottomed yet, but they persist in trying to draw a favorable comparison by measuring things as if the current recession had already reached its nadir. It makes no sense. You can’t compare something in progress with something completed, other than in the way that you’ve done — by measuring both at equal points. It’s like being halfway there on a flight to Maui and stating, “We’re only over the Pacific Ocean! THIS isn’t a flight to Maui!”

    How stupid do you have to be to reason like that? I guess these eCONoMISSEDs have no concept of progression.

  2. usxp

    The unemployment rate numbers count only the people who are drawing unemployment benefits. They do not count those whose benefits have run out, those who do not qualify for benefits, or those who never applied. Not to mention those who never had a job regardless of why. So who knows what the real number is? It might be double of what they say it is.

  3. Lee Adler

    The household survey includes estimates of those figures. That’s where the 12.2% comes from. As you say though, the accuracy of those estimates is suspect.

  4. Gordon S. Creek

    In Reno, go to Gallatti Way, where the day workers congregate. There are no more Mexicans and illegals, there are masses of US Citizens seeking any work. I estimate 15% unemployment if not more. December 2008.

  5. Stuart

    Ask someone who lived through the Ask someone who lived through the depression. The ones I know think it was worse than this.
    From the widespread panic from day one, to the number of people who were willing to do any work they could get.
    Today people look down their noses at working minimum wage jobs while they remain among the discouraged workers.
    This time is bad, but don’t be too quick to say that you know where we are going.
    Flying over the ocean and saying you know where you are going at all is taken for granted now.
    But the only sure thing today is that this flight is taking us into uncharted territory, without GPS.
    Much of our recovery will depend on our ability and willingness to keep trudging and keep working, even in jobs we hate that are part-time-minimum-wage jobs because that’s all we can get.
    The worse that unemployment figure gets the more true this is.
    In fact if giving the lower figure means staving off panic it may help, notwithstanding your crying about it.

  6. Lee Adler

    I don’t understand what the point of the above comment is. “From the widespread panic on day one”? By March 1930, the consensus was that the economy was recovering. The stock market had erased 50% of the crash losses. Unemployment for 1930 has been estimated to be 8.9%. Today it is 12.2%. Across the country, state and local government finances are collapsing.

    We are one year into this and by many measures the economic decline at this point is worse than it was one year into the Great Depression. At that time things continued to get worse for another 3 years, then it stayed bad for 7 more years until the buildup to WWII.

    If you want to argue that it won’t be as bad this time please provide some data and logic to back up the argument.

    No one above argued that they know where we are going. I assume this is an internalized discussion you are having with yourself.

  7. A Mays

    copy and paste:At that time things continued to get worse for another 3 years, then it stayed bad for 7 more years until the buildup to WWII.
    Not exactly–if you are going buy ther 29 crash things started looking up starting in 33-4. 36-7 things were reasonably stable then there was a stockmarket plunge in late 37 leading to the 38 recession–as usual caused by speculators monkeying with the countrys wellbeing—– And there is a VERY important difference that every one chooses to be ignorant of—- our grand parents did NOT live a borrowed life style like this country insists on now— They believed it is IMMORAL to accept someting–“buy” –that they could not pay for and we are hell bent on self distruction because we refuse to pull our heads out of our asses and compare our stupidity in contrast with the values they tried to instill in us.

  8. Stuart

    The real point is this: saying that this is as bad as the depression is tantamount to saying that you know where we are going.

    This is a very different situation, it manifested more slowly, there were no bank runs and it may or may not be as bad.
    Recovery will be largely dependent on not panicking.

    Sure in’30 they thought it was improving, only after numerous bank runs, where panicked depositors lined up to try to get their money.

    for 1923-29 unemployment was 3.3 in ’30 it was 8.9, it had tripled. If Unemployment now is at 12% then you are including all the discouraged workers that feel there are no jobs and won’t take a job serving fast food because it doesn’t pay enough. But our unemployment has not tripled, it has not doubled.

    The market had recovered as you say, but unemployment had not, at least not in proportion to what it had fallen.
    In 1933, when unemployment hit 24.9 it was over seven times the 1929 rate, seven times increase in 4 years.

    Those that I know, who were there, agree that it is not as bad, sure it could get there, but did you live through it? Would you know how people of that time viewed it?

  9. L Morse

    Before we start blaming one another, consider what has transpired over the last 25 years. I grew up poor. My dad worked construction; an industry first hit. He bought american made products. The color tv sat on the console tv. Phones were one ring long and one ring short. If you didnt have the money, credit was impossible to find. Until it was figured that the more credit the more products would be bought. Unfortunately, alot of those products were produced overseas. Many a Christmas comments made about “made in Japan”. But with every dollar spend, the products were getting better. Nothing is made here anymore, not by the fault of americans but by the corporate policy makers. Better put Neocons. Our cars fell apart after the 48th payment while the Japanese flooded the market with cheap cars good on gas. Home equity loans substidized a standard of living; again fueling the economy while sucking the personel wealth of families. We were told some credit is healthy. We were considered “isolationist” if we wanted goods made here and bought here. We were told its a world economy. Well, guess what…white collar jobs are being out-sourced to India by the droves. Those of you who arent effected yet will soon be. Wake up quite blaming your hard working americans, and look to the Congress and Senators who are protecting their family wealth through legislation…if you dont see by now, you proably never will….God Bless America, and please save us from this tyranical rule called the ONE WORLD ORDER. Your friend and patriot – L. Morse

  10. Stuart

    “Before we start blaming one another”
    “Nothing is made here anymore, not by the fault of americans but by the corporate policy makers. Better put Neocons.”
    “Wake up quite blaming your hard working americans, and look to the Congress and Senators who are protecting their family wealth through legislation…”

    Well, let’s see how many jobs the Liberal administration brings home this term.
    Seriously, there is blame enough for everyone, from the guy who won’t take a job for less than 40k/year, to the corporate board rooms, to BOTH paries.
    Liberals are not infalable, any more than Conservatives.

  11. James T. York

    An unoffical study done by Alaska Dept. of Revenue was suppressed back in ’96.
    Criteria was Federal poverty wage guide lines + non-taxpayer health minus gov’t and Davis-Bacon. Report developed an 86% under and unemployment rate. Rept. included all persons with a 50% income drop regardless of income. Staff was ordered to destroy all copies of report. Yes, the rate is manipulated.

  12. shellie

    Sorry-Just a Mom and Grandma that uses common sense.This thing is going to get really bad before it gets better!!Read between the BS-I go to the Market I see the sad faces!!I see and hear the fear, it is there.But it won’t quite be validated until the news tells them it is really bad!!They are hanging on-but honestly I think the American people need to be told!! They can handle it-and they can make better decisions to adjust for what is really coming!!

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