I do think we could drive ourselves crazy if we try to adjust these numbers.  As some of the above posts show, professional economists are spending weeks arguing back and forth over some of these concepts, and I doubt if we have the time or the expertise to do that.  A second reason is that if we make our own adjustments (and I think it would really be tough to gain agreement on some of the points), and then want to present that to any outside bodies, I think we would lose credibility by saying something like we used "adjusted' OECD figures as our base.  Isn't that the proverbial Pandora's Box?  I agree it's tempting to do this--the statistic I was most surprised with was the States' assumption that if you work one hour per week, you're employed!  Who ever thought that one up.  But I checked the BLS, and there it was.  But how in the world could we adjust for that?  And I imagine there are others that go the other way, if we really dug into it.

I did have opposite reactions than you to the two points you highlighted on the military and on prison populations.  First, on the military, I was shocked to see that they are not counted as employed, or in the work force.  And perhaps there will be cultural differences on this one.  But we count government employees, except for the military?  I think most Americans would view the military as an honorable profession.  We have prestigious universities focused on the military--the Military, Naval, Air Force and Coast Guard Academies.  These schools are very tough to get into.  Degrees from there are viewed as very honorable whether the person goes onto a career military career or to other professions outside the military.  I guess in the old days of the Draft, I could see an argument that it shouldn't count--but certainly not now, with an all volunteer armed forces.  My review shows there are 1.4 million in the armed forces today, not including reservists.  My SWAG calculation (scientific wild a.. guess) was adjusting the labor force and employed numbers both up by that amount would reduce unemployment by 1/2 of a percent.  And I see your proposed adjustment would add them to the labor force, but count them as unemployed--if i understood you correctly.  Which would mean that the 34th American President went from a lifetime of unemployment to the Oval Office.

On the prison population, the accepted methadologies seem to require that the potential employee be ready to work in one or two weeks.  So there would seem to be a pretty strong argument that they are not in the labour force.  However, I think this statistic is an important one, and should be included somewhere--but probably more in a quality of life area, rather than in unemployment statistics.

Thanks for your great story, and I look forward to continuing dialogue.