- If you measure the unemployed as anybody over 16 years old who isn't earning a living wage, the rate rises even further, to 54.6%. For Black Americans, it's 59.2%.
The backstory: The official definition of unemployment can be traced back to the 1870s, when a Massachusetts statistician named Carroll Wright diagnosed what he referred to as "industrial hypochondria".
- By restricting the "unemployed" label to men who “really want employment,” Wright managed to minimize the unemployment figure.
- Wright went on to found the Bureau of Labor Statistics, and he brought his unemployment definition with him.
- To this day, to be officially counted as unemployed you need to be earning no money at all, and you need to be actively looking for work.
By the numbers: In January, when the official rate of unemployment was 3.6%, the true rate was seven times greater — 23.4%. That's according to new calculations from the Ludwig Institute for Shared Economic Prosperity, founded by Gene Ludwig, a former U.S. Comptroller of the Currency.
- "I was shocked," he tells Axios on HBO, "that a quarter of the population that want work can't earn a living wage."
- The recession made everything worse. Only 46.1% of white Americans over the age of 16 — and a mere 40.8% of Black Americans — now have a full-time job paying more than $20,000 per year.
The bottom line: The unemployment catastrophe in America is not new. It's been at crisis levels for decades, but it has been hidden behind the official numbers. Ludwig's hope is that his new data will light a fire under Congress to address this national emergency.
