The True Unemployment Rate: 36%

Human Events ^ | February 20, 2012 | John Hayward

[Tolerance Sucks Rocks]

How would you define “unemployment?”  Statistics on unemployment are bandied around in the media all the time.  Changes in these statistics are hailed as good or bad news for the President, with varying degrees of emphasis from the news networks, depending on which party the President belongs to.  But what do these statistics truly measure?

Would you define “unemployment” as measuring “people who want a job, but can’t get one?”  This is, broadly speaking, the definition embraced by the Bureau of Labor Statistics.  The trick to making those numbers dance lies in measuring “people who want a job.”  The widely reported U-3 unemployment metric, currently standing at 8.3 percent, is very aggressive in shaving off people who have not made recent efforts to find work.  It is further distorted by massive “seasonal adjustments,” which made over a million people vanish into thin air last month. 

This is why the official unemployment rate gets lower when the American workforce contracts.  Workforce contraction is a very bad thing.  People who simply cannot find work, and languish on unemployment insurance for years, are the last thing a prosperous country needs… but those people don’t count in the official unemployment rate.  For example, if everyone under the age of 25 abruptly stopped looking for work, it would be an economic disaster, but the official unemployment rate would go down, because the pool of people looking for work would get smaller. 

(That’s not quite as far-fetched an example as it might sound, incidentally.  Even the heavily-massaged U-3 unemployment rate currently sits at 23.2 percent for ages 16-19, and 13.3 percent for ages 20-24… and it’s about two percent higher for young men...

[Tolerance Sucks Rocks]

PING!

[U-238]

Most of these rules of measuring unemployment date back to the 1930s and the sample of unemployed workers they take is so small.
http://www.nationalaffairs.com/publications/detail/what-is-unemployment

[dragnet2]

My hunch is that number is close to accurate.

It’s difficult to know, as the labor reports vary widely and feels like listening to a Tokyo Rose broadcast.

[musicman]

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[Doc91678]

Obama and the Democratic Party have been blowing smoke up our you know what. It's election time so of course employment according to the Dems is better. When in truth its just as bad or worse than the 30’s.
I see farmsand homes being foreclosed and people's families breaking down because they can't support them.
This has never been as bad as now and Obama and his biased media is hiding this from the public,

[Doc91678]

Obama and the Democratic Party have been blowing smoke up our you know what. It's election time so of course employment according to the Dems is better. When in truth its just as bad or worse than the 30’s.
I see farms-and homes being foreclosed and people's families breaking down because they can't support them.
This has never been as bad as now and Obama and his biased media is hiding this from the public,

[Doc91678]

Obama and the Democratic Party have been blowing smoke up our you know what. It's election time so of course employment according to the Dems is better. When in truth its just as bad or worse than the 30’s.
I see farms-and homes being foreclosed and people's families breaking down because they can't support them.
This has never been as bad as now and Obama and his biased media is hiding this from the public,

[Doc91678]

Obama and the Democratic Party have been blowing smoke up our you know what. It's election time so of course employment according to the Dems is better. When in truth its just as bad or worse than the 30’s.
I see farms-and homes being foreclosed and people's families breaking down because they can't support them.
This has never been as bad as now and Obama and his biased media is hiding this from the public,

[unkus]

When in truth its just as bad or worse than the 30’s.

---

That’s right.

[Uncle Slayton]

0bama blamed President Bush for an Unemployment rate of 6% back in 2008 and now 0bama has given us an Unemployment rare of 36%.

The 2012 Republican campaign needs to be built around the simple fact.

Bush 6% Unemployment.

0bama 36% Unemployment.

[marron]

people who have not made recent efforts to find work

Good article, but even he adopts the language of the fraudsters.

The statisticians have no way of knowing you aren't trying to find work, and they have no way of knowing you have "dropped out of the work force". All they know is your unemployment benefits ran out.

If you aren't receiving unemployment, you aren't counted. If you graduate from school, and can't find work, but you don't qualify for unemployment, you aren't counted. If you are off work and living off your savings, you aren't counted. If you're out of work but your folks or your brother in law is supporting you, you aren't counted. If you are out of work camped down by the river eating beans you picked up at the local food bank, you aren't counted.

Being out of work no longer qualifies you to be counted as "out of work". The qualifier is "out of work less than a year, receiving a state check".

So, yes. The government statistic is fraudulent, and has never been more fraudulent than it is now. The real number is probably in the thirties. Everyone in America knows someone out of work and most people are helping to support an out-of-work family member. Hardly a family in America is untouched.

[cpdiii]

What is the current percentage of working-age Americans, eligible to participate in the civilian labor force, but not currently working? Answer: 36.3 percent.

If the same methodology that says current unemployment is 8.5% was used during the great depression it would have shown very low levels of unemployment.

The methodology being used today simply covers up the fact that we are in a very very very severe recession that may end up being a depression.

[skinkinthegrass]

!

[JDoutrider]

mark

[Soul of the South]

We are in an economic depression. Almost 50 million on food stamps. Hundreds of thousands of foreclosed homes and shuttered businesses not to mention the 20+ million manufacturing jobs lost to outsourcing over the last decade. Extended unemployment benefits. Exploding social security disability recipients. 46% of the population not paying taxes. Declining household income for the last decade. 1% return on CD savings decimating retirement for millions of seniors. Escalating food, medical and energy costs further depressing incomes of the middle class and fixed income retires. Not only is it an economic depression, it is a psychological depression in which the producer segment of the population is losing hope and belief in the American dream is non existent in many segments of society.

[raybbr]

Bush 6% Unemployment. 0bama 36% Unemployment.

That's ridiculous. Recalculate unemployment under Bush the way they did it here for Obama and the rate was about 15%.

[Alberta's Child]

All good points, but I wonder if a sizeable chunk of that 36% cited in this article are actually “out of work” for a perfectly legitimate reason: they’re retired.

[khelus]

The monthly unemployment statistics are based upon two separate sets of data.

The monthly employment rate is based upon a phone survey of ~60,000 families. It is not based upon whether one is receiving unemployment. OTH, the annual benchmark revision is based mainly upon the number of those receiving unemployment.

Among the main sources of hidden unemployment are:

• Those working part time but who need full time work. They are found in the U-6 rate
• Discouraged workers. A small number discouraged workers are included in U-6. A much larger number, the long term discouraged workers are moved out of the labor force.
• Seasonal adjustments
• The assumption that workers are still able to retire at the same age as in the past. In the annual adjustment released in February of this year, a large number of the population increase was assumed to be not in the labor forces because in the BLS's words:
  "This was because the population increase was primarily among persons 55 and older and, to a lesser degree, persons 16 to 24 years of age. Both these age groups have lower levels of labor force participation than the general population"
  
  The blue line in the following chart is a good approximation of unemployment rate, if you undo the 'modifications' since and including the major revisions in 1994:
  
  

[khelus]

For those who missed articles abour the ballyhooes +243,000 jobs created.

This number is from the payroll survey. Business reported in raw numbers -2,689,000 jobs.

Using BLS math,
-2,689,000 + Birth and Death Model adjustment + Seasonal Adjustment = +243,000.