Tags: Gallup | employment | payroll | population

Gallup: US Employment Rate Much Lower than Govt Says

By    |   Friday, 07 September 2012 10:12 AM

The official unemployment rate is pegged at 8.1 percent, but a new research measure from Gallup indicates that it's really much worse.

The difference is that the government counts part-time workers as employed, even if they work just an hour a week, according to Fortune, while Gallup doesn't count part-time workers or those who are self-employed.

Government employment figures report artificially low unemployment rates because they lump “good” jobs with “bad” jobs, writes Gallup CEO Jim Clifton in his blog, adding that a good job is one in which an employee works at least 30 hours a week for an organization from which employees receive a real paycheck. A bad job, he says, is work that’s informal or some form of menial self-employment.

Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation

Galllup’s payroll-to-population metric estimates the percentage of the entire population aged 15 years or older (not just those currently in the workforce) who are employed full time for an employer for at least 30 hours per week.

By Gallup's measure, 41 percent of U.S. adults were employed last year. However, the Labor Department pegs the U.S. employment-to-population rate at 58 percent, Fortune reports.

"Gallup finds this new measure of employment to be more strongly related to [gross domestic product] per capita than any other employment metric, including unemployment, which is traditionally the gold standard employment measure but relates little to GDP," Gallup states.

The U.S employment rate is actually better than most. While the global employment rate was 27 worldwide in 2011, it ranged from 4 percent in the Central African Republic to 52 percent in Sweden.

Not counting the self-employed as working might seem counterintuitive, Gallup concedes, yet self-employment in many countries tends to be subsistence work that does little to lessen poverty.

Not counting part-time workers is probably unfair, says Fortune writer Nin-Hai Tseng. An increase in part-time hiring may foreshadow economic improvement and an increase in full-time jobs. Plus, many part-timers are not seeking full-time work.

"As the jobs market continues to slog through, it's only fair to question what the government's numbers are telling us. Starting with who exactly has a decent job?"

Editor's Note: See the Disturbing Charts: 50% Unemployment, 90% Stock Market Crash, 100% Inflation

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