As they say, the devil is in the details. One of the problems with crunching numbers is that you can massage them any way you like and not many people bother to read the fine print. That is why ignoring discouraged workers maybe fine in the normal course, but is dangerous in times like this. There is another number that I like to look: the total number of unemployed people at a given time, not just the ones that have applied for benefits or are receiving them.
Figures collected for Reuters by John Williams, from the electronic newsletter Shadowstats.com, suggest that, while we are not there yet, the comparison is not as outlandish as it might initially seem. By his count, if unemployment were still tallied the way it was in the 1930s, today’s jobless rate would be closer to 16.5 percent — more than double the stated rate. “I expect that unemployment in the current downturn, which will be particularly deep and protracted, eventually will rival, if not top, the 25 percent seen in the Great Depression,” Williams said. He and other critics have one particular sticking point with the current way of measuring unemployment: the treatment of discouraged workers.
According to the Times, “Newly unemployed Americans will have to spend about 30 percent of their jobless benefits on average to pay for health insurance through their former employer, according to a new report. And if they want coverage for their families, the report by Families USA says it will take more than 80 percent of their unemployment check.”
While I have argued endlessly why universal health insurance is a must for all Americans, this point further illustrates how broken the system is. Now if an employee gets a pink slip, the unemployment benefits provide some income for a limited period of time and may allow one to have insurance for her/himself and/or family, that is not how things always work out. In many cases, people stop working for a variety of other reasons and have no unemployment benefits. These individuals and their families have no way of having any insurance at all. Imagine the impact it has on children!
