How Labor makes some workers disappear

President Obama can thank Bill Clinton for the fact that the unemployment situation doesn’t look worse.

Thanks to a tiny tweak in definitions made by the Clinton White House back in 1994, Obama’s life is a whole lot easier.

Don’t get me wrong — not easy, just easier.

Last Friday, the Labor Department announced that the headline unemployment rate for July — the one followed in the newspapers — notched up one-tenth of a point to 8.3 percent. And the president is certainly going to have a hard time explaining why the jobless level is still so high.

But there’s another figure — called the U-6, buried deep in the Labor report — that should really be of concern to the president. And here’s where Clinton did all future presidents a favor: making the U-6 number look better than it really should.

U-6 is defined as “total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force.”

Are you clear on what this number is? Of course not — it’s gobbledygook.

It means that U-6 includes people out of work plus anyone who wants a full-time job, can’t find it and is settling for part-time work.

The unemployment rate in the U-6 definition rose to 15 percent in July from 14.9 percent in June. It had been 16.3 percent in July 2011.

But it’s those Americans not in the definition — discouraged workers — that you will want to know about.

Back in ’94, the definition of a discouraged worker was changed. Until then, Labor would call people’s houses and ask the adults if they were employed or not. If someone said they weren’t even looking for a job because they were too discouraged, that pre-1994 person was considered unemployed and included in the figures.

The Clinton administration decided that unemployed people couldn’t be discouraged — and not job-hunting — for more than 12 months. If a person hadn’t searched for a year he was simply not included in the U-6 or other measures of joblessness.

How many people are now discouraged and not counted in the unemployment rate? Who knows? There are lots of folks these days who have given up their job search.

How high would the U-6 underemployment rate be if these discouraged workers were added back in? ShadowStats.com, which tracks government figures, thinks the broadest jobless rate would be 22.9 percent if President Bill’s folks hadn’t redefined what it means to be unemployed.

That would be a lot harder to explain to Americans than the 15 percent level it’s at today.