Posted on 11/13/2013 6:52:45 AM PST by SeekAndFind
Just beneath the surface, the government’s latest employment report [1] shows how much damage the POR (Pelosi-Obama-Reid) economy, now well into its sixth year [2], has done to the country’s economic fabric. The impact of Obamacare, if it isn’t stopped, will only compound it.
Even the relatively decent news in Uncle Sam’s October report was suspect.
Employers are said to have added 204,000 seasonally adjusted jobs. But as the Associated Press noted [3], the government, thanks to the 17 percent [4] government shutdown, had an extra week to retrieve its surveys from employers, and therefore had a higher than usual response rate. It doesn’t seem as if this should matter, but apparently the Bureau of Labor Statistics has a history of estimating high in its initial releases when it has more time to collect and assemble the data. Additionally, economist Mark Zandi believes that “businesses may have inadvertently counted employment for an extra week.”
Even more questionable are the BLS’s revisions to August and September. As seen below, the raw (i.e., not seasonally adjusted) figures show no revised net improvement during those two months. But that goose egg somehow turned into 60,000 additional jobs during seasonal conversion:
Then there’s the unemployment rate. Even though it ticked up to 7.3 percent, that was also supposedly good news, because it would have dropped if it weren’t for the 850,000 federal government workers [5] furloughed during part or all of the partial shutdown and treated as unemployed.
The real problem, thanks to the POR economy’s progenitors and the Obamanomics policies which have accompanied it since January 2009, is that the official unemployment rate is more unreflective of true job market conditions than it has ever been.
During Republican and conservative presidential administrations, those on the left, particularly in organized labor, often complained bitterly that the official unemployment rate fails to count discouraged workers and those who are working part-time for economic reasons. For some reason — I wonder why? — they’re incredibly quiet these days, even though their complaint, as we will see, is far more valid.
In August 1982, AFL-CIO head Lane Kirkland contended [6] that the previous month’s official 9.8 percent unemployment rate, so adjusted, would have been 13.6 percent, or 3.8 points higher. That’s interesting, because October 2013′s seasonally adjusted “U-6″ unemployment rate, after I adjusted the official 13.8 percent down by 0.2 points to account for those furloughed government workers, was that very same 13.6 percent [7], even though the official 7.3 percent “U-3″ unemployment rate was 2.5 points lower than it was at the time of Kirkland’s complaint.
Though Big Labor’s beef has always been somewhat valid, the difference between the U-3 and U-6 rates was almost always between three and five percentage points throughout the 1980s, 1990s, and the majority of the most recent decade, meaning that there was no reason to be overly concerned about that difference — until the POR economy came along.
As seen in the above chart, the difference between the U-3 and U-6 rates gradually and consistently fell during the first six years the BLS began formally tracking U-6. It rose during the 2001-2002 recession, fell slightly for a few years after that, and remained stable until the spring of 2008.
Then disaster struck. The difference quickly widened, not at all coincidentally beginning when America figured out that Barack Obama would likely become its next president, i.e., when the POR economy began. After only a year, the U-3 vs. U-6 gap, which had almost never been above 5 points, exploded to over 7 points. After Barack Obama’s nearly five years at the helm, the gap has barely narrowed, and is still miles above any previous era.
But even the U-6 rate understates how bad things are. That’s because of the staggering number of people who have dropped out of the workforce entirely. While many of those involved are retirees, most aren’t.
The civilian labor force dropped by a seasonally adjusted 720,000 in October. The BLS says that the government furloughs did not influence that decline. In the 57 months since Barack Obama took office, the labor force has grown by only 607,000 [8] — an average of less than 11,000 per month. Meanwhile, the adult population has grown by 11.642 million [9].
If only a very conservative one-third of the 11.035 million additional adults who are now sitting things out (11.642 million minus 607,000) were included in the workforce, the U-3 and U-6 unemployment rates (without adjusting for the furloughs) would be much, much higher:
Based on the above, it is reasonable to assert that almost 16 percent of Americans would like to be working full-time somewhere — and aren’t.
Related to all of this, the overall workforce participation rate has dropped from 65.7 percent to 62.8 percent during Barack Obama’s presidency thus far. That rate dropped by 0.4 points in October alone, to the lowest level seen since 1978 [10].
Add to all of this the fact that millions of workers are, out of necessity, in jobs for which they are overqualified. Half of all college graduates are working jobs which do not require [11] a college degree. Even if you subtract out those who are exactly where they want to be by choice, that’s a staggering figure. The “underemployment rate,” if you will, is surely well above 20 percent. Yet we continue to churn out college grads, pretty much ensuring that this dangerously wasteful trend [12] will continue, even as household incomes continue to stagnate/a> [13].
Obamacare threatens to turn what is already a very rough situation into a potential cataclysm.
Barack Obama’s “signature achievement” discourages work [14]. Its millions of individual [15] and small employer group [16] policy cancellations will suddenly force millions of Americans to spend hundreds of dollars extra per month most of them don’t have, leading to massive cuts in discretionary spending — or will cause them to go without insurance entirely. A no-growth Obamacare Christmas [17] may well be in the offing.
As long as the Obamacare albatross hangs around, employers will have to play it close to the vest on hiring. The uncertainties about what this authoritarian administration may or may not do are too daunting — and we don’t even know whether the Mother of All Website Failures will ever function properly.
The only real solution is the one certain courageous conservatives pushed in September before they were overcome by the wing of the Republican Party which, carrying on in the sellout tradition of [18] Bob “Tax Collector for the Welfare State” Dole, is on track to become the welfare state’s health insurance premium collectors.
At this point, defunding Obamacare and repealing it entirely is an absolute necessity. Once that occurs, we might finally be able to talk about how to embark on a meaningful economic revival and how to make the all-inclusive unemployment rate come down.
Article printed from PJ Media: http://pjmedia.com
URL to article: http://pjmedia.com/blog/what-is-the-real-unemployment-rate/
URLs in this post:
[1] latest employment report: http://bls.gov/news.release/archives/empsit_11082013.htm
[2] well into its sixth year: http://www.bizzyblog.com/2008/07/03/the-pelosi-obama-reid-recession-porr-may-have-begun/
[3] noted: http://hosted.ap.org/dynamic/stories/U/US_ECONOMY?SITE=AP&SECTION=HOME&TEMPLATE=DEFAULT
[4] 17 percent: http://www.foxnews.com/politics/2013/10/07/reports-show-less-than-20-percent-fed-government-is-really-shut-down/
[5] the 850,000 federal government workers: http://www.latimes.com/business/money/la-fi-mo-shutdown-back-pay-furlough-workers-white-house-20131107,0,4700740.story#axzz2kH1piS9c
[6] contended: http://news.google.com/newspapers?id=AH9UAAAAIBAJ&sjid=Bo8DAAAAIBAJ&pg=6160,3122646&dq=real-unemployment-rate+higher&hl=en
[7] was that very same 13.6 percent: http://bizzyblog.com/wp-images/AdjustedU6unempRate1013.jpg
[8] by only 607,000: http://bizzyblog.com/wp-images/CivilianLaborForce0103to1013.png
[9] by 11.642 million: http://bizzyblog.com/wp-images/AdultPopulation0103to1013.png
[10] since 1978: http://www.cnbc.com/id/100610528
[11] which do not require: http://www.forbes.com/sites/susanadams/2013/05/28/half-of-college-grads-are-working-jobs-that-dont-require-a-degree/
[12] this dangerously wasteful trend: http://www.theblaze.com/stories/2013/10/23/mike-rowe-of-dirty-jobs-speaks-about-hard-work-how-many-are-following-the-worst-advice-in-the-history-of-the-world/
[13] continue to stagnate: http://www.sentierresearch.com/reports/Sentier_Household_Income_Trends_Report_September2013_11_07_13.pdf
[14] discourages work: http://pjmedia.com/blog/obamacares-cool-calculator-work-disincentives-like-weve-never-seen-before/
[15] individual: http://foxnewsinsider.com/2013/11/07/how-many-americans-have-lost-their-health-insurance-under-obamacare
[16] small employer group: http://bizzyblog.com/wp-images/AnthemCAfullmSmGroupCancelLtr010114.png
[17] no-growth Obamacare Christmas: http://pjmedia.com/blog/a-no-growth-obamacare-christmas/
[18] in the sellout tradition of: http://www.nationalreview.com/corner/336576/republicans-and-taxes-ramesh-ponnuru
Bring back jobs to America!
Now.
How many hr/wk does it take for a position to be counted by the go’vt as a “job”?
So many have given up looking, it's probably impossible to get a really accurate estimate. From anecdotal evidence, I certainly think the ShadowStats figures are much. much closer to the truth than those peddled by the 0bama regime.
Sooner or later the house of cards has to collapse when more are unemployed than those that are employed.
If a Pubbie gets elected in 2016, tens of millions will suddenly be “looking” again and the number will instantaneously soar to 27%.
Democrats lie about heath care - they lie about ‘immigration’ and they lie about unemployment.
Dems - a bunch of lowlifes and proud of it.
Don’t forget the return of the MSM shriek on the stock market:
“recovery for Wall $treet but not Main Street”
Interesting that Obama’s U3 number is about the same as Bush’s U6 number.
One. Even if it’s cutting grass or babysitting. And I am not joking.
How many people are working two part-time jobs to make ends meet because they can’t find a decent full time job?
I believe I read somewhere that any week in which you earn any wage or salary at all you are considered to be employed that week.
I can't find a reference to that so would welcome comment from knowledgeable Freepers.
The determination of what constitutes full time or part time employment is up to the employer. Generally that is 40 hours but it varies. And we know ObamaCare defines 30 hours per week as the breakpoint.
Wife and I are both involuntarily out of the work force and not counted as unemployed. Just because your benefits end, should you not be counted as unemployed? In the old days, people like us and young people without jobs would frequently start our own business. However, today’s regulations and requirements, not to mention the minimum wage and threats of lawsuits, make that a risky and almost impossible venture. It’s as if government is waging a war against small business and personal responsibility. But ever fear, the end result is good as government reported unemployment declines. As more of us are pushed out of work, the argument for socialism and government owned businesses will increase, leading to a loss of personal freedom. America is losing jobs but few among us realize what the long term cost will be.
I believe even the U5 number is manipulated. U6 builds on U5 and it is U5 that states who would like to work. However, I believe the U5 number of who would like to work has been discounted heavily.
If we look at the raw numbers of how many adults are alive of working age, say 18 to 68, and look at how many are in salaried full-time positions we will find unemployment over 50%.
One problem with government numbers is that they show 105 million have “full-time jobs”, however, they define full-time as 30+ hours a week, even if a person must work multiple jobs to get to 30 hours. However, some charts still stipulate 35 hours in the primary job held are needed to be counted as full-time. Go figure.
If we look at the salaried workers making $1,000 per week or more, we find there are only 21 million that do and only 18 million that earn more than $1,500 or more per week.
Even then, the numbers the BLS output don’t add up. In one chart of 16+ or older the numbers are 17 million but when adding races together it comes out to 19 million. It is extremely difficult to get accurate numbers as not even the government numbers make any sense.
These are the numbers I have found; even if they are not accurate they seem to cross-check to be accurate enough. Never do any of these numbers get repeated. Depending on the chart or table these numbers vary even if the column heading is the same, such as “Hourly Workers”. That number will vary. It is also nearly impossible to ascertain who is salaried as the fed misreports their numbers.
(In thousands, so 102,749 = 102 million)
Total number of workers: 102,749.
Hourly workers: 75,276.
Salaried workers: 27,473.
Total jobs worked: 127,577. (People work multiple jobs)
Persons aged 19-69: 196,000.
Looking at those numbers, only about 14% of the adult population has a full-time salaried job and only about 48% of adults even have a job. Approximately 20% work more than 1 job. I didn’t include the number of people working 3 or more jobs as that number is actually small but it is about 2% of the population.
Most of us realize what the long term cost is. Government dependence has been the Democrats’ social-political objective for over 80 years. It will end only when they can no longer borrow the money which props-up their vote-buying schemes. See: Detroit.
What Is the Real Unemployment Rate?
Last I read, was that the real rate is 17.3 %!
I read a year ago it was 30% or more. They didn’t figure the high school graduates, college graduates and those whose jobs were cut below 29 hours. I believe it.
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