Understating Unemployment   

When journalists report the official jobless figures, they aren't always telling the whole story.

On the first Friday of each month the U.S. government provides the press one of its top news items. That's when the Department of Labor's Bureau of Labor Statistics (BLS) releases its unemployment figures for the previous month.

In recessionary times the unemployment figure looms large. As Tom Raum of the Associated Press notes, "Among all the economic statistics put out by the government, the unemployment rate is one that all Americans can easily understand. It helps define hard economic times in stark human terms."

But does this number give an accurate picture of economic distress? Some academics, journalists and public interest groups say no: The true story is actually worse. They say the official number underestimates unemployment and that many journalists fail to report that it does not include hundreds of thousands of out-of-work and underemployed Americans. "It's wrong and inaccurate," says William Serrin, a former New York Times labor reporter. "Unemployment [has] always been underreported."

Dan Lacey, the late editor of Workplace Trends, a Cleveland-based newsletter, said in a July interview that if reporters included these other numbers "you're looking at a 13 to 15 percent rate by most estimates."

Serrin and others point out that the BLS does not include in the civilian labor force what it calls "discouraged workers" – those who are unemployed but have not actively sought work for at least four weeks.

The BLS, which bases its unemployment figures on a monthly Census Bureau survey of 60,000 households, calculates discouraged workers on a quarterly basis. In June, when the jobless rate jumped to an eight-year high of 7.8 percent – representing nearly 10 million people – the BLS estimated that more than 1.12 million others had stopped looking for work. Since then the jobless rate inched downward one-tenth of a percent each month to reach 7.5 percent in September, but the number of discouraged workers increased by 23,000 to nearly 1.15 million and many others went back to school.

Critics also note that the BLS counts anyone who works one hour or more a week as employed, thus equating the status of a full-time corporate manager with that of a marginally employed school-crossing guard. In September, more than 21 million Americans were working part time.

More than 6 million of those part-timers, says the BLS, wanted to work full time. Economist Sar Levitan, who chaired the National Commission on Employment and Unemployment Statistics when it convened between 1977 and 1979, says this figure is as significant as the jobless rate in illustrating what is happening to the economy.

Since 1970, says Levitan, the number of involuntary part-time workers has increased steadily. While the labor force grew by 35 percent, the number of involuntary part-timers nearly tripled, from 2.2 million in 1970 to 6.3 million in September. "All these numbers are available to the media," says Levitan, "but the media don't take the time or space to explain them."

Unemployment statistics also don't reflect the incidence of "downward mobility," said Lacey. They don't account for the ex-steelworker who now makes significantly less flipping hamburgers.

Finally, the BLS regularly publishes a table of alternative definitions of the jobless rate, including one, called the U-7 rate, that incorporates discouraged workers and measurements of involuntary part-timers. Serrin and others maintain this rate, calculated quarterly, is more accurate than the conventional one. But a BLS statistician says the bureau does not emphasize the U-7 rate, which is buried in the middle of 14 pages of tables, and the press virtually ignores it.

Janet L. Norwood, a former BLS commissioner, agrees that the unemployment rate does not give the whole story, but says there is a "sizable group of reporters who month after month report those [other] numbers. For the most part, the reporters at major newspapers and at the wires do a good job."

Norwood, now a senior fellow at the Urban Institute in Washington, D.C., does see a growing deficiency at newspapers that have cut back their staffs. Some papers no longer have economics or labor reporters, she says, while others have a different reporter doing the story each month. "We used to have an experienced group..writing on this," she says. "Now there's less specialization and it's a difficult set of data to understand."

Ellen Vollinger says there has been improvement in coverage since she headed the now-defunct Full Employment Action Council in the mid-1980s. "The concept of 'hidden' joblessness wasn't getting out [then]," she says. She gives the New York Times, among other papers, high marks for publishing a chart each month indicating the number of discouraged workers and involuntary part-timers.

Vollinger, a Washington lawyer, now serves on the board of Americans for Democratic Action, a liberal group that issues monthly press releases announcing the "real" jobless rate based on BLS figures.

Vollinger singled out the New York Times' Robert D. Hershey Jr. as one of the best reporters on the beat. His articles on the BLS' June, August and September jobless rate augmented the official figure. He also pointed out on October 3 that although President Bush called the one-tenth of a point drop in the rate in July, August and September evidence of "slightly improving job markets," the dip was due to the fact that fewer people were looking for work. Hershey also has noted that the BLS considers a one-tenth of a point change statistically insignificant.

The Chicago Tribune's Michael Arndt also routinely defines and reports on the number of discouraged and part-time workers. But Hershey's and Arndt's counterparts at other news outlets are not as consistent. A spot check of articles in the Washington Post, Philadelphia Inquirer, Los Angeles Times, Boston Globe, Wall Street Journal and Orlando Sentinel, as well as segments broadcast on NBC, ABC and CBS, shows that although most reporters mention the loss or gain of payroll jobs from the BLS' monthly survey of businesses, many fail to explain the deficiencies of the official unemployment number.

At the Washington Post, John M. Berry reported the story in June, July and October, while Steven Mufson handled the chore in August and September. In his front page story on June 6, Berry did report that 6.5 million people working part time wanted full-time work, but he only mentioned discouraged workers in passing and didn't state how many of them there were. His article a month later – and both articles by Mufson – failed to provide numbers for discouraged workers or involuntary part-timers. Berry's October 3 story, however, did mention the number of discouraged workers.

"I had less space [in July] than I normally have to write about unemployment," says Berry, who covered the reaction of the Federal Reserve Board in the same piece. "But I agree that the unemployment rate does not tell the whole story. I usually don't add up the other elements of labor distress as other folks would like me to do [because] that's not the official definition."

David Johnston at the Philadelphia Inquirer failed to mention discouraged workers or part-timers in his July 3 article, but, like most other reporters, he also had to report on the Fed. His August 8 article did mention that 6.3 million part-timers could not find full-time work and that the number of involuntary part-timers had tripled in the past 22 years. His September and October articles both cited part-timers and the number of discouraged workers.

From June through September, the Los Angeles Times used four different reporters to cover the BLS announcements. Only one reporter, Stuart Silverstein in an August 8 article, mentioned the growing number of involuntary part-time workers. Neither he nor his colleagues covering the story in June, July or September explained the concept of or stated the total number of discouraged workers.

The Boston Globe rotated four reporters from June through October. None of them mentioned the number of discouraged workers or involuntary part-timers. Charles Stein, however, did give his readers a perspective they wouldn't find in many other newspapers by reminding them on October 3 that the jobless rate was 5.4 percent when President Bush took office.

Stein's colleague, Peter Gosselin, was on duty when the jobless rate peaked in June. He agrees that it's important to report the official figure in context. "We use it as if it measures what's happening on the ground," he says, "and there's a lot more hurt out there than the figure indicates."

"But there is a broader point," he adds. "Most newspapers..are addicted to politics, especially in an election year. The demands on economic reporters are loose – the desks don't hold you to high standards."

If any newspaper holds its economic reporters to high standards, it's the Wall Street Journal. But Rick Wartzman's piece on July 3 was devoid of any direct reference to involuntary part-timers or discouraged workers.

Wartzman says that the Journal occasionally reports the number of labor market drop-outs, but that "the most important figure for us and most economists is the payroll number. We look at trends, and the payroll gives you a fair look at how the economy's doing."

Critics, however, say the BLS survey of businesses has its own flaws. It doesn't distinguish between full-time and part-time work, and it counts anyone with two part-time jobs as two fully employed workers.

Smaller newspapers generally rely on wire services for their BLS stories, and that often means the Associated Press. Sometimes they print an edited version of the AP story, as the Richmond Times-Dispatch did on July 3, and sometimes they have a staff reporter add local information, as Brad Kuhn did for the Orlando Sentinel that same day. Neither story went beyond mention of the official jobless figure.

The AP article was written by Dave Skidmore, who covers economics and banking. "It would be a mistake to emphasize in the lead of a spot news story anything other than the standard civilian unemployment rate," he says. He says that he has mentioned part-timers and discouraged workers in the past, but that he's "not trying to provide comprehensive raw material."

But when AP leaves out that information, it doesn't get in, at least not in Orlando. "I'm working five stories concurrently," says Kuhn. "When it comes time for the unemployment story, I take the AP version – I don't get the original press release from BLS – and I put a local spin on it. It's a cut and run job and that's the nature of the business."

The reporters saddled with the most limitations are in television. "I'm given two minutes," says Mike Jensen, NBC's chief financial correspondent, "so it's not crucial that I mention part-time employees or discouraged workers every single time. Maybe one month out of four or five I will refer to them." On September 4, Jensen did tell viewers that "experts say the official figures, as bad as they are, don't begin to tell the story because they don't count people who have stopped looking or can get only part-time jobs."

Stephen Aug, an ABC correspondent, did not go beyond the official jobless rate in his pieces in August and September. But he did mention in August that many formerly well-paid workers have been forced to take less lucrative positions.

CBS correspondent Ray Brady appears to get less time on the air than his counterparts, and that's not enough to go beyond official numbers. "That 7.8 figure [last June was] horrendous enough," Brady says. "We've done stories on the dropouts, [but] you can't sing the same tune over and over again... The trend is the thing that counts."

Critics insist that the trend, however, is generally worse than reported. James Medoff, a Harvard University economics professor and author of "The New Unemployment," a study released last spring, says the current situation may be the worst since the 1930s. "The media haven't been willing to report how bad things are," he says, "partly because they don't adequately understand the state of the labor market, and partly because they listen to people who have much to gain from the public believing things aren't as bad as they appear to be." l