When It Comes To Unemployment Numbers, Multiple Factors Are Included
Since the 2008 economic recession, the national unemployment rate has been closely monitored. In elections year, politicians use the statistics to promote their own economic agendas. Robert Morris University professor of economics Brian O’Roark says to fully understand what the rate means for the U.S. labor force, it’s important to examine all elements involved.
“If you look just strictly at the data, it looks like the economy is really doing pretty well,” O’Roark says. He cited low unemployment numbers, decent GDP rates and a high degree of productivity.
These statistics, however, can be deceiving, warns O’Roark. The unemployment rate, for example, does not account for people who have stopped looking for a job. Underemployed or part-time employees are often counted the same as full-time workers.
While the national rate does not account for these discrepancies, the Bureau of Labor Statistics provides another unemployment rate that includes these factors. This rate, says O’Roark, tells a different story.
“Right now the unemployment number is 4.9 percent,” he explains. “The other unemployment number that the Bureau of Labor Statistics calculates is much closer to 10 percent, which is where the regular unemployment number was at the height of the Great Recession.”
Stagnant wages and inflation have also contributed to a less-than-ideal economic situation. When the Federal Reserve raised interest rates in December 2015, inflation was below the organization’s ideal 2 percent target.
In this election, income disparity has played a significant role in both party candidate’s platforms. O’Roark notes that while very different in most every way, supporters of Bernie Sanders and Donald Trump have a shared frustration with the current economic system.
While he says he doesn't really have a solution, O’Roark believes most Americans would like to see a more level playing field economically and robust middle class. Finding a balance will likely be a challenge for the next president.
“Can you keep growth going, can you continue to bring unemployment down, and can you bring those wages closer together?”
O’Roark is not optimistic about the current plans put forth by the candidates, calling the majority of them idealistic. He sees trade agreements coming to the forefront going forward. For governments and corporations in the long term, these agreements can be financially beneficial, however O’Roark says most Americans aren’t able to see the full context.
“At the macros level, trade agreements are great,” he says.” But people don’t live at the macro level, they live at the micro level.”
In the 2016 presidential election, O’Roark says he’ll be paying attention to candidate tax plans and economic recovery solutions.
The Pennsylvania Primary is Tuesday, April 26.
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