Deception in Counting the Unemployed

One of the ways the Obama administration, as well as many administrations before it, cheat American workers is an institutionalized duplicity about worker employment figures.


Leo Hindery, Jr. is one of those big personalities in real life that we see characters trying to play in the movies.  He sees himself as a larger than life change agent, working to rewire America's social contract to be more fair to American workers. A former CEO of cable firm TCI, then AT&T Broadband, Global Crossing, and the Yankee Entertainment Sports Network, Hindery helped lead firms to rationalize their assets, streamline staffing, and pump up productivity. From a CEO perspective, he saw businesses offshore their production and service lines rather than re-invest in workers in the United States.

Believing that financial institutions were being deregulated even as the labor market was stuck in 1930s-era legal structures, Hindery believed that the American government, U.S. business leaders, and the markets were on track to wreck the foundations on which middle class America was based.

He believed that workers would see their jobs continually off-shored, and their pensions and savings ripped off in a system increasingly designed to work at odds with them. In the end, Hindery surmised that this would forfeit America's future to other rising powers like China, which was making smart investments in manufacturing, infrastructure, and in workers.

As a CEO who found his soul and developed a profound concern for the state of American workers, Hindery wrote a book called It Takes a CEO: It's Time to Lead with Integrity, in which he argued for a new deal between workers, firms, government and the financial markets -- one that was fairer and more supportive of the aspirations of workers. I got to know him when he supported some of the work at the New America Foundation, where I had founded the American Strategy Program.

After this, HIndery joined the worker-concerned presidential campaign of John Edwards as senior economic adviser to the failed and now legally beleaguered former candidate. When Edwards' campaign sputtered Hindery was assigned the task of proposing that the ascendant Obama take Edwards as his vice presidential running mate. Obama adviser David Axelrod shrugged that off, but Hindery nonetheless joined the Obama campaign ranks as someone carrying the flag for American working families and the eroding middle class.

As soon as Obama prevailed in his first presidential win, Hindery and many of the labor leaders and worker-concerned Congressional leaders working with him believed that their sector of campaign supporters would be elevated in Obama Land. This didn't happen. Instead, those with a general neoliberal economic tilt, who tended to see workers as micro-economic distractions to bigger macro-economic crises, took over the helm of Obama's financial and economic team.

A former big-time CEO who had turned into one of the nation's leading supporters of organized labor might have been perceived by Obama as the kind of bridge-builder he needed between divergent national economic factions -- he could have made for a distinctive Secretary of Commerce. But in fact, has America had a distinctive Secretary of Commerce? Not in recent memory -- not perhaps since the late Ron Brown held the post. Penny Pritzker, confirmed just weeks ago, may emerge as a Secretary of Commerce who finally does something -- but Hindery's profile indicates that he would have either succeeded or crashed in ways there that made Commerce consequential. But while he was on the list for the job, the administration kept him at arm's length, in part because "he was too close to labor," a White House source shared with me.

To make matters worse, Hindery offered a car and driver to his friend and business colleague Tom Daschle, former Senate Majority Leader and leading health care adviser to the Obama campaign, as well as a potential vice-presidential running mate or chief of staff to Obama, which helped undermine Daschle's political perch in Obama Land. While the press reported this as Daschle accepting a gift on which he did not pay taxes, the real story is that Hindery kept on his payroll a driver he had known for years, whose health care needs were significant, and who desperately needed a job lest he and his family face destitution because of their medical costs.

Hindery didn't need a full-time driver in Washington -- he lived in New York -- but he was moved by the needs of this individual and wanted to keep him working. That's the guy Daschle would occasionally get rides from, and that's what cost Daschle any number of political appointments.  Daschle's rivals kicked back with happy grins when they learned that the worker-loving Hindery had hurt Daschle's appointment prospects by helping out a struggling driver.

This context is important because whether Hindery was maladroit at points in his own political aspirations -- which included for a short time considering a Quixotic run for the presidency to raise the fact that the American middle class was under siege -- he has been obsessive in getting a fair deal for and more focus on the real plight of workers.

One of the ways the Obama administration, as well as many administrations before it, cheat American workers is through an institutionalized duplicity about worker employment figures.

For decades, the only employment numbers that anyone would discuss were those issued by the Bureau of Labor Statistics (BLS). For the latest month, June 2013, the BLS reported a 7.6% unemployment rate, noting that U.S. employers had added 195,000 non-farm jobs and that there were 11.8 million unemployed persons in the United States.

But in the last few years, Hindery's dogged efforts to get pundits, reporters, and policy practitioners to abandon discussion of "official unemployment" rates to "real unemployment" figures has percolated in the media more and more. The latest example was New York real estate baron and US News & World Report owner Mortimer Zuckerman's extensive discussion of the real unemployment challenges facing America in the Wall Street Journal last week, titled "A Jobless Recovery is a Phony Recovery."

In a monthly email that Hindery personally sends to leading members of Congress, labor leaders, a large flock of journalists ranging from Fox News to The Atlantic, business leaders, and others, he dissects the BLS statistics and notes what is missing.

Hindery says up front that the BLS only notes those specifically looking for work. That may make sense to some -- until one learns who is left out.

According to the Hindery report, those who are left under the rug of America's unemployment mess are a number of discouraged workers who have given up looking for work and partially-employed workers. He notes those that BLS does not include are:

a. Marginally attached workers, of whom there are now 2.6 million. These are workers who, "while wanting and available for jobs, have not searched for work in the past four weeks but have searched for work in the past twelve months." Currently included among them are 1.0 million "discouraged workers" who did not look for work specifically because "they believe there are no jobs available or none for which they would qualify."

b. Part-time-of-necessity workers, of whom there are now 8.2 million, are workers unable to find full-time jobs or who've had their hours cut back.  These workers are often referred to as the "underemployed". 

The zinger from the Hindery unemployment assessment is that:

In June 2013, the number of Real Unemployed Persons increased by 757,000 to 22.6 million and the Real Unemployment Rate increased by 0.4% to 14.3%, reflecting large increases in the number of "marginally attached" and "part-time-of-necessity" workers.

In other words, BLS reports that official unemployment stayed flat at 7.6% while Hindery's more extensive figures show that real unemployment increased by 0.4% to 14.3%.

As America struggles with not only those entering the workforce now but also those trying to stay in it and get back into it, it's important to realize that the scale of need is about 22.6 million jobs. That should be the policy target -- not some scaled down version that is more politically palatable.

For those interested, here is the Hindery report on real unemployment for June 2013.

If anyone would like to receive this report on a monthly basis, email me at "sclemons @" or send a note to me on Twitter at @SCClemons, and I will forward my monthly report to those interested.