I was glad to see Jim Clifton, the big boss at Gallup, make a public comment about how the stated unemployment rate is a fiction. Our rate today, as Mr. Obama said (and will again say to anyone dumb enough to continue to listen to him), is at 5.6%. But this rate ignores all the people who've simply stopped looking for work, and fails to give a value to those people who are working but are working at fewer hours than they want, or at lower pay than they had before. Whether you think Mr. Obama and national Democrats are to blame for our ongoing economic diaspora or not, what Clifton is talking about should cause us all to want a new measure of economic health as it relates to working.
Not long ago I wrote about exactly this problem and, predictably, leftist posters on this site had nothing nice to say about the idea. But if having accurate knowledge about our economic health is a bad thing, then it must be true that economic progress and growth (in the real and true sense) can only be gained by dumb luck. Not to insult religious people, but economic policy would be performed out of faith and not "science". We are already in this situation today with the right and the left each arguing for their own economic policies, but with little way to measure the effect of them when enacted. The left, for instance, will tell you that without a doubt that our Great Recession is the fault of Bush for spending too much, or of Congress for repealing portions of Glass-Steagall. But they ignore the CRA of 1977, or its amendments in the 90s, or of regulators guiding banks into making the "right" loan decisions so as to avoid a Lower GI kind of bank inspection.
In short, what is ignored by those sure of what happened is actually what happened.
We should at least be able to agree on a new measure about how to measure employment health in the USA. My idea is to produce an index from the U-6 rate (which includes underemployed persons), average hours worked, and average wages earned both pre- and post-tax, along with the Labor Participation Rate. If the U-6 declines because the LPR increases, then we would know this. But if it falls because the LPR declines, then we would know the actual reason and realize our economy is less than healthy. If hours worked go down while average wages go up, then we know that better jobs are likely being created in a stronger economy. But the reverse would be true too, that worse jobs (or no jobs) are being created in a weaker economy.
An index of this kind would not be hard to create, and would give far more information than the simple--and stupid--U-3 rate that is announced with glee or dread today. After all, our unemployment rate--the real rate--still exceeds 10%. But we just don't know it because we continue to let politicians deceive us. This, by the way, is not a partisan slam at Mr. Obama. He's the worst president we've ever had, but not for this reason. If a Republican were in his position he would crow about the glorious employment numbers too. Both sides do this because voters love to be lied to, which is the biggest mistake of all.