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Illustration: Eniola Odetunde/Axios

A person who is looking for a full-time job that pays a living wage — but who can't find one — is unemployed. If you accept that definition, the true unemployment rate in the U.S. is a stunning 26.1%, according to an important new dataset shared exclusively with "Axios on HBO."

Why it matters: The official unemployment rate is artificially depressed by excluding people who might be earning only a few dollars a week. It also excludes anybody who has stopped looking for work or is discouraged by a lack of jobs or by the demands of child care during the coronavirus crisis.

  • If you measure the unemployed as anybody over 16 years old who isn't earning a living wage, the rate rises even further, to 54.6%. For Black Americans, it's 59.2%.

The backstory: The official definition of unemployment can be traced back to the 1870s, when a Massachusetts statistician named Carroll Wright diagnosed what he referred to as "industrial hypochondria".

  • By restricting the "unemployed" label to men who “really want employment,” Wright managed to minimize the unemployment figure.
  • Wright went on to found the Bureau of Labor Statistics, and he brought his unemployment definition with him.
  • To this day, to be officially counted as unemployed you need to be earning no money at all, and you need to be actively looking for work.
Expand chart
Data: Ludwig Institute for Shared Economic Prosperity; Chart: Axios Visuals

By the numbers: In January, when the official rate of unemployment was 3.6%, the true rate was seven times greater — 23.4%. That's according to new calculations from the Ludwig Institute for Shared Economic Prosperity, founded by Gene Ludwig, a former U.S. Comptroller of the Currency.

  • "I was shocked," he tells Axios on HBO, "that a quarter of the population that want work can't earn a living wage."
  • The recession made everything worse. Only 46.1% of white Americans over the age of 16 — and a mere 40.8% of Black Americans — now have a full-time job paying more than $20,000 per year.

The bottom line: The unemployment catastrophe in America is not new. It's been at crisis levels for decades, but it has been hidden behind the official numbers. Ludwig's hope is that his new data will light a fire under Congress to address this national emergency.

Go deeper

Felix Salmon, author of Capital
Nov 9, 2020 - Economy & Business

P.S. Economic polls are bad, too

Illustration: Aïda Amer/Axios

This week America witnessed a forecasting failure of almost unprecedented magnitude. October's unemployment rate came in at 6.9%, after dozens of the best-paid and most experienced economic forecasters in the world had predicted the number would come in at 7.7%.

Why it matters: Those forecasters had literally millions of data points of information to go on, and have had ample experience with unemployment releases, which come out like clockwork on the first Friday of every month. But there will be no great post-mortem about why they got the number so wrong.

6 hours ago - Health

Food banks feel the strain without holiday volunteers

People wait in line at Food Bank Community Kitchen on Nov. 25 in New York City. Photo: Michael Loccisano/Getty Images for Food Bank For New York City

America's food banks are sounding the alarm during this unprecedented holiday season.

The big picture: Soup kitchens and charities, usually brimming with holiday volunteers, are getting far less help.

9 hours ago - Health

AstraZeneca CEO: "We need to do an additional study" on COVID vaccine

Photo: Pavlo Gonchar/SOPA Images/LightRocket via Getty Images

AstraZeneca CEO Pascal Soriot said on Thursday the company is likely to start a new global trial to measure how effective its coronavirus vaccine is, Bloomberg reports.

Why it matters: Following Phase 3 trials, Oxford and AstraZeneca said their vaccine was 90% effective in people who got a half dose followed by a full dose, and 62% effective in people who got two full doses.