With all the economic turbulence of the past few months, the unemployment rate is sitting at a modest 6.1%, but those numbers don’t add up for John Williams. Williams, an Oakland-based economist, runs shadowstats.com, which is dedicated to providing alternative economic reporting. Williams claims that his stats correct for the biases of the Bureau of Labor Statistics.
During the Clinton administration, the parameters used to calculate unemployment were changed. New sampling techniques were implemented, and discouraged workers were redefined as just lazy, or, in BLS jargon, “marginally attached.” Williams claims that since then the BLS’s numbers haven’t been accurate. Williams’ unemployment rate is above 14%, more than double the official number.
Here’s the scoop, from Williams’ site:
- Up until the Clinton administration, a discouraged worker was one who was willing, able and ready to work but had given up looking because there were no jobs to be had. The Clinton administration dismissed to the non-reporting netherworld about five million discouraged workers who had been so categorized for more than a year. As of July 2004, the less-than-a-year discouraged workers total 504,000. Adding in the netherworld takes the unemployment rate up to about 12.5%.
- The Clinton administration also reduced monthly household sampling from 60,000 to about 50,000, eliminating significant surveying in the inner cities. Despite claims of corrective statistical adjustments, reported unemployment among people of color declined sharply, and the piggybacked poverty survey showed a remarkable reversal in decades of worsening poverty trends.
