The Unemployment Rate is a Lie. The Truth is Much Worse
- Kevin Lankes
- Jul 15
- 6 min read
Watch on YouTube: https://youtu.be/WnYfQ3Z2190
What if I told you that the unemployment rate is a lie? Wouldn’t that be crazy? I mean, we’re always hearing about this thing. You have to live under a rock not to hear about it. Or just not watch the news or never go online, or possibly never go outside, I guess. You might not know what the unemployment rate is currently, but you definitely know that it’s a thing. It’s a big important thing. Everyone is constantly worried about the economy, and the unemployment rate is a big indication of how that’s going. The unemployment rate determines which politicians’ policies we think are working and which presidents we allow to come on back and do another term.
But did you know, that the number that gets reported as the unemployment rate, the one you hear about all the time, for this big important thing, isn’t the real unemployment rate? Yeah, it’s not. I just took for granted all these years that this percentage they give us was the unemployment rate. I think most people probably also just assume this is the actual rate that you hear about every day on the news. When I found out it wasn’t, it really exploded my brain cells to dust. So what’s going on here? Why are we getting fake numbers and doesn’t that make it difficult to know what’s actually happening in the real economy that we live and work in?
The current unemployment rate, as given to us by the Bureau of Labor Statistics, or BLS, is 4.1% as of June 2025. But other independent economists and organizations have different totals, like the Ludwig Institute for Shared Economic Prosperity, or LISEP. LISEP collects all the data on all the different socio-economic groups and builds a far more accurate and realistic unemployment rate based on all these conditions and people that just flat out aren’t counted by the government. With all of the people who get lumped into the employed column who really aren’t, and all the people who are left out altogether, the unemployment rate skyrockets up to 24.3%, as of April of 2025.
So where does this official 4.1% come from? Well, it comes from leaving a whole lot of people out. Some people, it makes sense to leave out. People who are retired. People who are babies. And I don’t mean just their attitude, like they’re actually genuine babies. Full-time students are left out of the equation, as well as full-time homemakers, and full-time prisoners. The unemployment rate that gets reported on the news is supposed to reasonably leave out the people who aren’t participating in the labor force or wouldn’t be expected to do so. But some experts like those in LISEP think it goes way too far, and I tend to agree with them.
For instance, the government just doesn’t count a shit load of people who are unemployed in certain circumstances. It just outright doesn’t count these people. Some people who are unemployed long-term, they just stop getting counted. And younger people who fall into the category of NEET, or Not in Employment, Education, or Training, are also left out. I did a whole video on the growing NEET population and why that’s a whole thing, so be sure to check that out.
There’s certainly an argument for leaving some people out and there’s complications and nuance and everyone might not agree on all of it. But even sneakier than all that, the official BLS numbers leave out whole categories of people who are kind of working-ish but are what’s called functionally unemployed. That means people who are working freelance or part-time or even full-time just at slave wages, or, and this is really wild: people who are actually homeless who only work one hour in the last two weeks, which in the government data officially gets tallied as “employed.”
There’s another whole category of people who are labeled with a real genuine economic term, and that term is “discouraged worker.” Discouraged workers are a real economic grouping for people who’ve given up looking for work because they just can’t find a job. They aren’t counted in unemployment statistics because they’re considered to be on the fringes of the workforce somehow. In the U.S., the Bureau of Labor Statistics calls discouraged workers “marginally attached to the labor force.” So, therefore, somehow not unemployed.
Frictional unemployment is what economists call the time period between jobs, when a worker is laid off or quits and is looking for another role. But if that goes on too long, we just stop counting them in the workforce for various reasons, or pretend they’re not unemployed as in the case of discouraged workers.
This is also where some of the younger people in the NEET movement end up, because they’re not voluntarily unemployed. So people who are looking for work but can’t find it, who graduate into a pandemic or don’t have enough experience or the market is too crowded, or what-have-you, well the government just stops counting them after a while. There’s no secret or trick or even justification, it just doesn’t count them.
The Bureau of Labor Statistics does publish alternative unemployment calculations. And those do factor in some of the people who fall between the cracks. Doing so makes the unemployment rate go all the way up to 7.7% as of June 2025. That number is also called the U-6 measure, and it’s described by BLS as: “Total unemployed, plus all people marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all people marginally attached to the labor force.” But that still doesn’t get us anywhere near the 24% rate quoted by the Ludwig Institute.
And that’s a big problem. As LISEP chairman Gene Ludwig told to CBS: "If you say there's 4.2% unemployment, which makes political folks happy because it's a low number, it causes all kinds of poor policy decisions and assumes we are better off than we are. There's less energy and less of a push to improve employment, and the people who get hurt are middle- and low-income Americans."
And not included at all in the official numbers are the 70% of Americans who live paycheck to paycheck. Just about 70% of us could not survive a single month without a job. These are your friends, family members, neighbors, regular people like you. They’re doing fine, they seem happy, they have all their shit together. Except that if 70% of people lost their jobs today, they’d be completely effed within 30 days. Of course, it hurts the most disadvantaged among us the most. In January of 2025, only 16% of lower-income Americans said they were not living paycheck to paycheck.
But this is only going to continue if we don’t enact policy decisions based on reality. We can’t just make shit up to look better and then sweep the financial collapse of the American Empire under the rug. Eventually, it’s going to catch up, and at that point, lots of us are going to wish we had done something different much earlier. Put in place the kind of systemic change that ushers in stability and support for everyone, instead of just letting this go and crumbling into poop dust.
So let’s make sure we use the right numbers when we talk about socio-economic issues. The unemployment rate is not 4.2%, it’s 24.3%. Think about that. Think about how many people you know must be struggling when you’re hit with the real number. Think about how many people are struggling just because they’re living paycheck to paycheck. And sure, you can make an argument that some of them deserve it. But if it’s 70% of people, we have to start engaging with this as if it’s the system itself that’s designed to cause that to happen. Let’s be better to each other, and not think the worst about people we don’t even know, or about our neighbors. Stop thinking that everyone just wants to pull one over on us, because chances are, they’re struggling just as much as we are. Let’s do some f*cking good for all the people the government flat out ignores. Let’s not ignore them, too.
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