Q: The Obama administration takes credit for the unemployment rate dropping to 8.3 percent. Conservative pundits insist the rate is closer to 11 percent because so many people have dropped out of the workforce since the recession began and different numbers are used to give a false rate. Which is true?
—Bruce Coppedge, Suwanee
A: The 8.3 percent rate is an honest report of unemployment as it has been historically calculated by the Bureau of Labor Statistics, Ian M. Schmutte, an assistant professor of economics at the University of Georgia, told Q&A on the News in an email. “Since not everyone who isn't working is unemployed -- consider students and retirees -- the BLS only counts people as unemployed when they are not working and state that they are actively looking for work,” Schmutte said. The 11 percent number is calculated by using an alternative definition of unemployment that addresses some legitimate concerns, he said, such as holding the labor force participation rate constant to its “pre-recession level in 2007.” But, Schmutte added, the BLS already “calculates alternative indicators to address concerns about discouraged workers.” He finds the BLS’ alternative measures of labor underutilization to be more informative, but “a comprehensive picture of the health and recovery of the labor market require looking at a number of pieces of information that go beyond either statistic,” Schmutte said.
Andy Johnston wrote this column. Do you have a question about the news? We’ll try to get the answer. Call 404-222-2002 or email q&a@ajc.com (include name, phone and city).
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