The seasonally adjusted, the U.S. unemployment rate minus the millions who quit looking for work in September 2023 was reported as 3.8%. This unemployment calculated rate held at 3.8% in September, and the number of unemployed persons was essentially unchanged at 6.4 million.
The Bureau of Labor and Statistics (BLS) estimated the number of available workers who are not in the labor force totaled 91.8 million. That number has risen by nearly 2 million people in the past year. If we add 2 million to the 6.4 million number that the government is using, we get a dramatically different outcome of 8.4 million "out of work" — which is alarming to any economist.
Remember that the unemployed are those who are out of work and who are actively looking for a job. We can calculate the unemployment rate by dividing the number of unemployed people by the total number in the labor force, then multiplying by 100. Thus, (Unemployed ÷ Labor Force) x 100= The Unemployment Rate. In August 2023, the number of people in the civilian labor force in the United States amounted to 168.05 million.
To calculate the real unemployment rate, we calculate 8.4 million divided by 168.05 million.
8.4 million / 168.05 million ≈ 0.049975
So, the enhanced result is approximately 0.049 or roughly a whopping 5%. Thus, the real number of unemployed presently could initially be 31.58% higher than reported this month.
Keep in mind, this 5% only includes the recent 2 million who lost jobs and can’t find work over the last 12 months. Another 2 million women have recently left the workforce according to the Society of Resource Management. So add another 2 million women (8.4 million + 2 million [10.4] divided by 168.05 million.) and you get a higher 6% unemployment rate. To make things worse, Yahoo and CBS recently said that another 7 million “prime age” men between the ages of 25 and 54 are reportedly sitting it out and not working.
The Real Math & the Real Unemployment Rate
In the end, when you add the 7 million extra men out of work to the 10.4 million jobless, you get a whopping 17.4 million workers who are unemployed. With 17.4 million counted, we seem to have a true or real unemployment of 10.37% in 2023. As with any math equation and artificial intelligence, the calculations and algorithms regarding unemployment are only as good as the data inputs.
Thus, when people say that unemployment rates are low while few can find good jobs because of inflation, high interest rates and job cuts, there appears to be fundamental contradictions about our economy and the data presented.
U-6 unemployment, also known as the "Underemployment Rate" or "Total Unemployed, Plus All Marginally Attached Workers, Plus Total Employed Part Time for Economic Reasons," is a broader measure of unemployment in the United States compared to the more commonly cited U-3 unemployment rate. The reported U-6 Unemployment Rate is 6.70% for Sep 2023. This U-6 Unemployment Rate is up to 6.70%, compared to 6.40% last year.
While the official unemployment rate is broadcasted with great fanfare every month, the intricacies of how this number is derived often remain shrouded in confusion. If every state or the tax authorities just reported their number citizens and their number of eligible workers, that might be a better measure, but nobody is really sure how many people are displaced and out of work.
From discouraged workers who have given up the job search to those navigating the gig economy's precarious terrain, there are millions of people and various factors and circumstances that fall through the statistical cracks, leaving us with an incomplete picture of the nation's workforce. In sum, our unemployment rate is more realistically between 5% and 15%. That's just from using Math 101.
In conclusion, the number of people over the age of 18 in the United States is approximately 258 million, and if we remove the 20 million students who are in college, that is 238 million. Presently, the number of working folks in the USA is 168 million.
Using these fundamental numbers, the percentage of people without jobs or not working is a shocking: 29.41%.
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Commissioner George Mentz JD MBA CILS CWM® is an international lawyer, speaker, educator, tax-economist, and CEO of the GAFM Global Academy of Finance & Management ®. The GAFM is a ESQ accredited graduate body that trains and certifies professionals in 150+ nations under CHEA ACBSP and ISO 21001 standards. Mentz is also an award winning author and graduate law professor of wealth management for a top U.S. law school.
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