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A new GOP talking point on long-term unemployment falls short

at 05:02 PM ET, 06/13/2011

“Long Term Employment Is Now Worse Than the Great Depression”

— From a new ad by former Massachusetts governor Mitt Romney (R) titled “Bump in the Road”

"We have unemployment that rivals the Great Depression. …We have lost 2.5 million jobs since Barack Obama has been president. And of that 2.5 million jobs, almost 45 percent of those people have been out of work for six months. That number rivals the Great Depression."

— Republican National Committee Chairman Reince Priebus, June 12, 2011

We have a new talking point! Former Massachusetts governor Mitt Romney has unveiled a hard-hitting ad aimed at President Obama’s handling of the economy, which includes the claim that long-term employment is now worse than during the Great Depression.

Meanwhile, Republican National Committee chairman Reince Priebus made a similar statement on NBC’s “Meet The Press,” though he garbled it. (There are actually 6.2 million workers who have been without a job for 27 weeks or more, which represents 45.1 percent of the unemployed.)

 These statements appear to have started with a report on CBS News on June 5, which said that “45 percent of all unemployed workers have been jobless for more than six months, a higher percentage than during the Great Depression.” The report appeared to list the Bureau of Labor Statistics as a source.

 So, is this correct?

 

The Facts

 There’s one problem with this statistic: The Bureau of Labor Statistics data only go back to 1948. The data set certainly shows that the duration of long-term unemployment is higher than any period since World War II (though it actually reached its peak in May 2010, when the percentage reached 45.6 percent). Even during the deep recession of Ronald Reagan’s presidency the percentage of long-term unemployment got no higher than 26 percent. 

Karen Kosanovich, an economist at the BLS, said that before 1940, there were no nationwide surveys of unemployment taken and so data from the post-war period cannot be easily compared to the pre-war figures. “The concepts we use now were not used then,” she said.

 In fact, she said, the widely reported figure of 25 percent unemployment during the Great Depression was an after-the-fact figure calculated from state and local unemployment surveys. So even that should be taken with a grain of salt, though a comparison of that figure with the nine percent unemployment of today suggests the current economic situation is not anywhere as grim as during the Great Depression.

 Kosanovich said she did not know of any generally accepted figure for the duration of unemployment during the Depression.

Lester V. Chandler’s 1970 book, “America’s Greatest Depression, 1929-1941,” cites a 1934 Massachusetts survey that nearly 62 percent of males and 54 percent of females had been unemployed for a year or more. That’s much higher than 45 percent being unemployed for six months or more.

David M. Kennedy, author of the Pulitzer Prize-winning “Freedom From Fear: The American People in Depression and War,” cites similar figures: in 1933, 62 percent found themselves out of work for longer than a year; 44 percent  longer than two years; 24 percent longer than three years; and 11 percent longer than four years.

“All number-to-number comparisons with unemployment in the Great Depression fail to reflect an important fact about the demography of the work force in the 1930s, when it was overwhelmingly male,” Kennedy said in an e-mail Monday.  “Fewer than 10 percent of women with husbands present were in the wage-labor work force - -so that an unemployment rate of, say, 25 percent (in 1932-33) meant in effect that nearly 25 percent of HOUSEHOLDS were without a wage-earner. A comparable number today (God forbid) would not translate into such a proximate percentage of households.”

 Romney spokesman Eric Fehrnstrom cited the CBS report as the source for the statement in the advertisement. The Romney staff apparently did not bother to check it themselves. “We’re relying on the news report,” he said.

 RNC spokesman Joe Pounder also defended the use of the CBS report, noting that it had been widely cited by other media. He also noted a BLS report written in 1984 that described the levels of long-term unemployment during the Reagan recession as “far higher than any experienced since the Great Depression.”

Note the word “since.” That’s different than saying the figures today “rival” (Preibus) or are “worse” (Romney) than the Great Depression.

 Pounder also defended Preibus’s statement that “unemployment rivals the Great Depression” by saying that there are 13.9 million unemployed Americans today and there were 12.8 million unemployed in 1933.

Comparing such raw numbers is ridiculous. There were only 125 million Americans in 1933 compared to 310 million today—and there is a similar difference in the size of the civilian work force. That’s one reason why the percentage of unemployed is so much lower now than in the 1930s, even if the raw numbers are similar.

Ben Tracy, the CBS reporter on the story, said in an interview that the network has misunderstood a source, who had actually said that the percentage was the highest “since” the Great Depression. The network late Monday corrected the online version of the story to say “long-term unemployment data does not exist for the early years of the Great Depression.”

“Apparently, a couple of Republicans have run with it, and that’s unfortunate,” Tracy said.

 

The Pinocchio Test

 We can understand why Republicans are so eager to hang the Great Depression around Obama’s neck. The percentage of long-term unemployed certainly is both a cause for concern and a valid issue to raise during a presidential campaign. The valid data show that this is the worst since World War II. But to suggest that the United States is once again in the midst of another Great Depression is going too far — especially now that CBS has retracted their statistic.

Two Pinocchios

 

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This post has been updated since it was first published.

 
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    About the Blogger

    Glenn Kessler has covered foreign policy, economic policy, the White House, Congress, politics, airline safety and Wall Street.

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