John Williams, editor of the Shadow Government Statistics website, publishes a much more realistic unemployment rate which accounts for "discouraged” workers who have not looked for work in the past four weeks because they believe no jobs are available.
The Bureau of Labor Statistics removed the "discouraged workers" category in 1994, under the Clinton administration, from the government’s unemployment measures.
The BLS publishes six levels of unemployment, but only the headline U3 unemployment rate gets the press. And frankly, that is absurd because it is the most meaningless of the unemployment measures.
The headline number does not count the “discouraged” workers who have not looked for work in the past four weeks because they believe no jobs are available.
The BLS also reports what is known as “U6 unemployment." The U6 unemployment rate is the BLS’s broadest measure, including those marginally attached to the labor force and the “under-employed,” those who have accepted part-time jobs but seek full-time employment. It also includes short-term discouraged workers who have not looked for work in the past year because there are no jobs to be found.
The BLS was reporting that the seasonally adjusted headline unemployment last month was only 7.4 percent, but it also said the broader U6 seasonally adjusted unemployment was 14 percent.
Williams calculates his “ShadowStats Alternative Unemployment Rate” by adding to the BLS U6 numbers the long-term discouraged workers who have not looked for work in more than a year but still consider themselves to be unemployed.
The ShadowStats Alternative Unemployment measure most closely mirrors what Americans commonly view as unemployed.
The mainstream media's reporting of rhe U3 BLS unemployment rate has stayed relatively low because it excludes all discouraged workers.
Below is a more complete unemployment table that includes the seasonally adjusted unemployment percentages for U3 unemployment, as well as the same for U6 unemployment, followed by the ShadowStats Alternative Unemployment rate for both December 2011 and December 2012:
