Reply #63: Getting back to the original point... [View All]

[nbcouch]

It has been widely claimed (e.g. http://www.bls.gov/opub/cwc/cm20030124ar03p1.htm) that unemployment during the Depression peaked at around 25% in 1933, and stayed in double-digits throughout most of the 1930s. But these are relatively recent estimates derived from a variety of contemporary sources, e.g. Labor in the Twentieth Century, Dunlop & Galenson, 1978. I'll concede the points that (a) estimates of unemployment made DURING the 30s were less "scientific" than those made today, and (b) there weren't official government estimates of unemployment in the 30s published at the time, except perhaps the postcard survey done in 1937.

Any way you look at it, comparing unemployment rates today with those during the Depression is to a certain extent an apples-to-oranges exercise. The numbers have marginal value at best, outside of year-over-year comparisons. Today we have no fewer than six official government estimates of unemployment, called U-1 through U-6, with U-3 being the measure most often cited. Is the methodology used to estimate that 25% rate during the Depression roughly analogous to, say, U-6, the broadest measure of unemployment tracked by the BLS? I do not know, but currently the seasonally adjusted U-6 stands at 13.9% (http://www.bls.gov/news.release/empsit.t12.htm), so it seems safe to say we are not yet in Depression-era territory.

It may be worth noting that while collecting unemployment insurance benefits does not in and of itself mean you are counted as unemployed in the government's statistics, it is true that you must be actively looking for work to collect UI benefits AND to be counted in U-3. This, and the fact that the government does report on new weekly UI claims, may be the source of the confusion over how the unemployed are counted relative to the UI rolls.