Unemployment: U-6 data versus the Great Depression
Because of changes in the way the unemployment rate is calculated, the figures today are apple to oranges comparisons to the ones quoted for the Great Depression or even the 1970s. Further, changes in the economy (less manufacturing) and the labor force composition (more women) make comparisons equally difficult.
Nevertheless, it bears noting that the unemployment rate in the United States was 3.6% in April 1930, this after the Great Depression had ostensibly started. By October 1932, 30 months later, it was 24.8%. It peaked at 25.6% in May 1933. These are non-seasonally adjusted figures.
Fast forward today and you might use the comprehensive unemployment figure U-6 as a basis of comparisons, of course with the caveats I mentioned in the first paragraph in mind. The Labor department defines this figure as “total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers.”
In September 2006, on the cusp of the Housing Bubble bursting, the U-6 unemployment figure was 7.6%. The latest non-seasonally adjusted figure is 16.2% (this is much higher than the 15.6% seasonally-adjusted figure making the rounds on the blogosphere).
The long and short of this comparison is that the crash in employment levels during the Great Depression was much worse than it is today. Nevertheless, the U-6 numbers are pretty frightening on their own and they are due to creep higher.
Here’s that comparison in graphical form.