Unemployment During the Great Depression Has Been Overstated and Current Unemployment Understated

The commonly-accepted unemployment figures for the Great Depression are overstated.

Specifically, government workers were counted as unemployed by Stanley Lebergott (the BLS economist who put together the most widely used numbers) … even though gainfully employed and receiving a pay check.

If we’re trying to compare current unemployment figures with the Great Depression, the calculations of economists such as Michael Darby are more accurate.

Here is a comparison of Lebergott and Darby’s unemployment figures:

Year	Lebergott	Darby
	1929	3.2%	3.2%
	1930	8.7%	8.7%
	1931	15.9%	15.3%
	1932	23.6%	22.9%
	1933	24.9%	20.6%
	1934	21.7%	16.0%
	1935	20.1%	14.2%
	1936	16.9%	9.9%
	1937	14.3%	9.1%
	1938	19.0%	12.5%
	1939	17.2%	11.3%
	1940	14.6%

We’ve Got Depression-Level Unemployment

Unemployment is currently underreported. Even government officials admit that their “adjustments” to unemployment figures are inaccurate during recessions.

In addition, the most widely-cited statistics use the Department of Labor’s Bureau of Labor Statistics’ “U-3″ methodology. But “U-6″ figures are more accurate, because they include people who would like full-time work, but can only find part-time work, or people who have given up looking for work altogether. U-6 is also is closer to the way unemployment was measured during the Great Depression than U-3

Current levels of unemployment are Depression-level numbers, especially when compared to Darby’s figures.

For example, economist John Williams puts current U-6 unemployment at 15.9%. That’s higher than 9 out of 12 years charted by Darby.

And there are certainly Depression-level statistics in some states. For example, official Bureau of Labor Statistics numbers put U-6 above 20% in several states:

• California: 22.0

• Nevada: 23.7

• Michigan 20.3

• (and Los Angeles County has 24.1% unemployment, higher than any of the Depression years as reported by Darby)

(The following blog can be found at

http://www.washingtonsblog.com/2011/06/unemployment-during-the-great-depression-has-been-overstated-and-current-unemployment-understated-weve-now-got-depression-level-unemployment.html

and was written by WashingtonsBlog on June 3rd, 2011)