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Unemployment shoots up to 16.5 percent

It includes those who’ve exhausted their benefits and part-time workers.

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By Randy Tucker, Staff Writer Updated 2:01 PM Friday, October 14, 2011

DAYTON — The nation’s official unemployment rate of 9.1 percent last month didn’t budge from August, but the government’s most comprehensive measure of unemployment shot up to 16.5 percent.

That was the highest rate of total unemployment so far this year and includes people working part-time who would prefer full-time jobs and those who have recently exhausted unemployment insurance benefits, according to the Bureau of Labor Statistics.

The national figure was slightly above total unemployment in Ohio, which averaged 16.1 percent through the first three months of the year. But the gap in Ohio’s current official unemployment rate – also 9.1 percent – and the total rate was similarly large.

“The thing I always look at to get a more accurate picture of where we are as a country and as a state is the real unemployment rate,” said Curvin Miller, vice president of the financial planning firm Russell & Company in Fairborn. “When that jumped up, you could see the writing on the wall: Companies need an impetus to hire, and there is no impetus to hire.”

The widely reported official unemployment rate — perhaps the most anticipated monthly economic indicator — is calculated based on household surveys of people who aren’t working but say they’re available for work and actively seeking a job.

The government compiles the total unemployment statistics to gauge what it refers to as “labor underutilization.’’

Many economists think total unemployment could be even higher than government figures show because many so-called “discouraged workers” who have exhausted their 99 weeks of state and federal unemployment benefits are no longer counted as part of the labor force.

“After 99 weeks, they call you discouraged as if you weren’t discouraged for the first 99 weeks,” Miller said.

Opponents to extending unemployment benefits often argue that extended benefits simply extend unemployment because it’s easier for displaced workers to collect benefits than go back to work.

Government data indicates that most of the 14 million unemployed Americans are looking for full-time work but can’t find jobs or have had to settle for part-time positions. The number of people working part-time because their hours were cut or they couldn’t find full-time jobs rose last month by 444,000 to 9.3 million, according to BLS figures.

Doubts about where the economy is headed have left many employers sitting on the sidelines, said Kathy Trautman, area manager for Manpower Dayton, the local franchise of the national employment agency.

“There has been pervasive uncertainty in really all industries,” Trautman said. “Of course, an industry has to experience an uptick in business before they hire full-time. In the meantime, they use temporary and part-time employees.”

That won’t change until more people go back to work, driving up demand for goods and services, Miller said.

“It’s all about spending,” Miller said. “If you get more people back to work, and you get the hours they’re working up and their wages going up ... you find they’ve got more money to spend. That’s so important in an economy dependent on consumer spending.”

The nation’s dilemma is that until more people go back to work, there will be little incentive for employers to boost hiring, he said.

Contact this reporter at (937) 225-2437 or rtucker@DaytonDaily News.com.