Real Unemployment Rate Closer to 12 Percent?

The official unemployment rate remains at an ugly perch of 8.2 percent, despite
declines in recent months. But even that lofty level understates the magnitude
of the jobs problem, according to a Wall Street Journal blog by Paul Vigna.

He looks at the
issue in terms of the labor force participation rate. That measures the
percentage of working-age Americans, excluding those who are in jail or the
military, who are “participating” in the work force.

The rate has been dropping
since January 2007, when it stood at 66.4 percent. The reading fell to 65.5
percent in July 2009, even as the Great Recession was officially ending, and
currently registers an almost 30-year low of 63.8 percent.

Taking that
drop into account produces a higher jobless rate. If you apply the July 2009
participation rate to today’s jobless numbers, that generates an unemployment
rate of more than 10 percent. And if you utilize the 2007 participation rate,
you’re left with a jobless rate of 11.8 percent.