Today, I’m adding a new recurring post that will track the course of “total unemployment”, i.e. the unemployment rate that includes all measures of employment underutilization.The traditional unemployment rate is calculated from the monthly household survey results using a fairly explicit qualification of “unemployed” (essentially unemployed and currently looking for full time employment) leaving many workers to be considered effectively “on the margin” either employed in part time work when full time is preferred or simply unemployed and no longer looking for work.
The Bureau of Labor Statistics considers “marginally attached” workers (including discouraged workers) and persons who have settled for part time employment to be “underutilized” labor.
The broadest view of unemployment would include both traditionally unemployed workers and all other underutilized workers.
To calculate the “total” rate of unemployment we would simply use this larger group rather than the smaller and more restrictive “unemployed” group used in the traditional unemployment rate calculation.
Below is a chart (click for larger version) showing the “total” unemployment rate versus the “traditional” unemployment rate along with the year-over-year percent change to the “total” unemployment rate.
Notice that the “total” unemployment rate has been skyrocketing as of late and has now with the latest 40% year-over-year increase has reached the highest level seen since the government began tracking the many measures of marginalized workers.The chart below (click for larger) calculates the spread between the “total” unemployment rate and the “traditional” unemployment rate.
Notice that while the total unemployment rate has increased 40% since last year, the difference between the total unemployment rate and the traditional rate has jumped nearly 50%, its highest annual increase on record leaving the spread at its widest on record.
