Hidden Unemployment Explains Rise of Trump and Sanders

An ongoing theme in my education blogs has been how do teachers prepare high school students to become not only college and career ready but also active citizens in a democratic society. As a social studies teacher educator I ask pre-service and working teachers as they plan units and lessons to ask themselves what is important for students to know about a topic and why. Periodically in this blog I will address the question "What is important to know and why?" about different topics. I start here with how the United States defines unemployment, a subject in the economics curriculum and something that has come up in the Presidential campaign. My next blog examines the disturbing increase in health, wealth, and education gaps in the United States.

Trevor Noah on the Daily Show thought it was hysterically funny. In his New Hampshire primary victory speech Donald Trump said official unemployment numbers were phony. "The number's probably 28, 29, as high as 35. In fact, I even heard recently 42 percent." Laughing, Noah said why not make it 80 percent. At the same time, the Labor Department announced that the number of Americans filing for unemployment insurance actually declined that week. But the thing is the Trump unemployment numbers are not ridiculous and that may explain the rise of both Trump and Bernie Sanders in the Republican and Democratic Party Presidential primaries.

According to the federal Bureau of Labor Statistics (BLS), using the most common definition of "unemployment," the official rate in the United States is currently just under 5 percent. But as The New York Times economics commentator Neil Irwin pointed out in a recent column, there are really a number of ways to define "unemployment" including six used by the BLS.

The standard definition, what the BLS calls U-3, the unemployed include only people who do not have a job but want one and have actively sought a job in the last four weeks. By this definition, there were 7.8 million unemployed people in January. If you divide 7.8 million by 158 million, the number of Americans who either have a job or are actively looking, the unemployment rate is 4.9 percent. However, if you use the BLS's broadest definition of unemployment, what it calls category U-6, the U.S. unemployment rate is almost double. This category includes people who want to work and looked for a job during the previous year, discouraged workers who stopped looking because of economic conditions, and people who are working part time but want to work full-time job and the unemployment rate rises to 9.9 percent.

But as Irwin points out, even this number may be artificially low. In 1999, 85 percent of Americans age 25 to 54 were working. But the figure now is only 81 percent. If we count those missing workers as unemployed, the unemployment rate rises to over 12 percent. And when you add college students who want to work, older people who were forced into retirement, people on disability who would work if they could, and women with children who would work if there were adequate day care, the hidden unemployment rate for the United States is probably over 30 percent. And this does not even include people who have taken low wage unskilled jobs at places like Walmart and Home Depot because skilled factory work has been shipped overseas.

The problem of unemployment is also obscured when you examine overall unemployment rates rather than rates for specific demographic groups. According to a recent report by the Great Cities Institute based in Chicago at the University of Illinois thirty percent of 20- to 24-year-old Black men living in Los Angeles and New York City were out of work and school in 2014. In Chicago, the situation is even worse. Almost half of young Black men in this age group were not working or in school. The situation is less extreme for Latino young men, their unemployment rate is twenty 20 percent, but it is still bad. The unemployment rate for similar White young men is still high, but not this high, at ten percent. A New York Times editorial compared the situation in inner city minority communities to the Great Depression of the 1930s.

Trump's comments can cross as an anti-government conspiratorial rant. But Donald Trump, whatever you may think of him, was not so wrong about work and unemployment. However, the solution to unemployment and underemployment is almost certainly more government involvement in the economy, not less. This is why an educated, college, career and citizenship ready electorate is so crucial to the survival of a democratic society. Private "job creators" have not been able to solve this problem in the past and there is no reason to believe they can in the future.

Whichever candidate you support, one thing seems pretty clear. Deep-seated economic unease experienced by many Americans explains the support for Trump and Bernie Sanders in the Republican and Democratic Party Presidential primaries.