President Obama can thank Bill Clinton for the fact that the unemployment situation doesn’t look worse.
Thanks to a tiny tweak in definitions made by the Clinton White House back in 1994, Obama’s life is a whole lot easier.
Don’t get me wrong — not easy, just easier.
Last Friday, the Labor Department announced that the headline unemployment rate for July — the one followed in the newspapers — notched up one-tenth of a point to 8.3 percent. And the president is certainly going to have a hard time explaining why the jobless level is still so high.
But there’s another figure — called the U-6, buried deep in the Labor report — that should really be of concern to the president. And here’s where Clinton did all future presidents a favor: making the U-6 number look better than it really should.
U-6 is defined as “total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.”
Are you clear on what this number is? Of course not — it’s gobbledygook.
It means that U-6 includes people out of work plus anyone who wants a full-time job, can’t find it and is settling for part-time work.
The unemployment rate in the U-6 definition rose to 15 percent in July from 14.9 percent in June. It had been 16.3 percent in July 2011.
But it’s those Americans not in the definition — discouraged workers — that you will want to know about.
Back in ’94, the definition of a discouraged worker was changed. Until then, Labor would call people’s houses and ask the adults if they were employed or not. If someone said they weren’t even looking for a job because they were too discouraged, that pre-1994 person was considered unemployed and included in the figures.
The Clinton administration decided that unemployed people couldn’t be discouraged — and not job-hunting — for more than 12 months. If a person hadn’t searched for a year he was simply not included in the U-6 or other measures of joblessness.
How many people are now discouraged and not counted in the unemployment rate? Who knows? There are lots of folks these days who have given up their job search.
How high would the U-6 underemployment rate be if these discouraged workers were added back in? ShadowStats.com, which tracks government figures, thinks the broadest jobless rate would be 22.9 percent if President Bill’s folks hadn’t redefined what it means to be unemployed.
That would be a lot harder to explain to Americans than the 15 percent level it’s at today.
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I — and now many others — keep telling you that the government’s job figures don’t tell the whole truth about the employment situation. But there is hope.
Each year the Labor Department makes two revisions to its employment figures: the final “benchmark” revision, which comes in the first quarter of the new year, and a preliminary revision in September.
The date is not yet set for this preliminary revision in 2012, but it could come on Sept. 27, about five weeks before the presidential election.
All the assumptions in the once-a-month jobs report that I think are crazy are fixed in these revisions.
For instance, in 2009 Labor reduced by 902,000 jobs the amount it thought had been created in the prior year. And in 2010 the revision took away 378,000 jobs. Last year, Labor’s revision added 192,000 — a fact that absolutely floored me.
This fall’s jobs revision will tell you a lot about the economic issues that will be important on Nov. 6.
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Today I’m going to continue a new series that I’m calling John Was Swindled by Sears.
As I told you in my last column, a Sears contractor who installed a garage- door opener at my house last week beat me out of an extra $150, and I’m not happy about it.
Now that it is summer, all columnists who aren’t covering the Olympics are bored. So I’m going to try to liven things up with stories about John-versus-retailers. I have many stories.
This one is about auto dealers, with whom I have always had a hate/hate-even-more relationship.
Many years ago, I bought an Oldsmobile Calais because I liked the name — so French! I immediately had trouble — and by trouble I mean the damned thing not only didn’t work, but the paint was flecking off.
One morning I got so peeved that the car had broken down yet again that I left it unlocked by the side of the road, in a bad part of town, with the keys inside. Then I told the dealer that he could fetch it. “You now own it!” I yelled.
The dealer did get the car and pretended to fix the problems, which continued.
So one day I went to the dealer’s service area and created a ruckus.
Another guy with a car problem — who looked wiser than I — came up and whispered to me that I was doing it all wrong. Complaining in the service area, he said, was futile.
“These people already bought cars,” he explained.
It’s much more effective to go into a busy showroom and complain in front of people who were still considering making a purchase.
So that’s what I did the next Saturday. The result: the Calais worked great after that. And looked fine with its new paint job.