Enacted in 1862, it provided an opportunity for independence through grants of land sufficient to sustain a family to all who were willing to settle and work the land. Eighty-six years earlier Jefferson had proposed that the government of Virginia grant fifty acres of publicly owned land to any propertyless citizen willing to farm it. That everyone who is willing to work hard can make a decent living and get ahead is the American Dream. These two groups of workers, all of them counted as employed, amount to twice the seven million workers who held no job and were classified as unemployed. Together they total 21 million workers, not seven million.
Economists treat the unemployment rate as an indicator of aggregate pressure on the economy.
But if many workers are underemployed, low unemployment does not signify a strong labor market that is likely to force up wages and hence generate inflation. That workers take and keep jobs paying menial wages is generally a mark of an aggregate undersupply of employment. From 1992 to 1998 the unemployment rate dropped by more than a third, yet the real hourly compensation of American workers remained virtually unchanged. Far from threatening to ignite inflation, workers' real wage increases have failed even to keep up with improvements in their productivity. The respondents' answers put the unemployment rate at about 20 percent, adding to concern among economists about the sorry state of public awareness about the economy.