Shadowstats.com
Posted on 10/12/2010 2:50:19 PM PDT by mainestategop
In only the last several years, you have no doubt heard more about the unemployment rate than you want to for the rest of your life. The talking heads and pundits tell you that it peaked out at 10.2 percent back in October of 2009.
They attempt to convince you that this followed from the low rate at the beginning of the Great Recession of 4.4% in March of 2007.
The official statistics tell you that it rose to 6.2% in August of 2008, 8.1% by February of 2009, 9.4% only three months afterward, and then reaching the previously mentioned high of 10.2% in October.
It may surprise you to learn that these are not the actual unemployment numbers though. In fact, when unemployment is measured according to the formula that was used when President Bill Clinton took office, it is actually around 20%. In the following text, you will see how this great disguise of actual unemployment came to be.
The Official Present Rate of Record Unemployment The currently used official unemployment number paints a picture of unemployment that is the highest that it has been since the 1983 recession. Back then, it peaked above 10% for a long ten months. Again though, these previous numbers were figured according to a different unemployment rate formula.
The Measure of Unemployment Used Today Today’s formula only counts a narrow segment of the non working population as unemployed. The people who are counted as unemployed do not currently have a job and have seriously attempted to find work over the last four weeks. They are all presently ready and willing to start work. This is called the U3 unemployment rate. It is also defined as the ratio of the civilian labor force that is aggressively seeking work but is still unemployed.
Other Measures of Unemployment You may have heard the saying that nothing is so convincing as a lie that is hidden within plain sight. Rather than do away with the other measures of unemployment when the formula was changed, the Bureau of Labor Statistics simply buried the real unemployment number in a mountain of other employment data and statistics. These are explained below.
The first measurement is called U1. It is a percentage of the labor force that has been unemployed for at least fifteen weeks or more. This is a straight forward number that does not begin to tell the story of the high unemployment in the U.S today.
U2 is another number released every month. It represents the percentage of the working population that has either lost a job or finished a temporary work assignment. While this is a better number for unemployment, it still leaves out a great number of other would be workers.
The U3 is today’s official unemployment rate. It represents those people in the total civilian work force who are unemployed and still seeking to be employed. It is a number that is less than half as high as the unemployment number that was used until after President Clinton took office, and it woefully under reports the serious problem in the present U.S. job market.
The U4 figure is a number that begins to more accurately reflect the current job reality. It includes everyone in the official U3 rate as well as discouraged workers. These are workers who have completely given up seeking employment as a result of feeling like the present economic environment does not offer them good opportunities for finding work. When you add these discouraged workers to the official numbers, it adds several tenths of a full percentage point on to the presently accepted official unemployment rate.
The U5 figure takes the numbers a step closer to real unemployment. This statistic represents U4 workers along with all of the so called marginally attached, or loosely attached, workers. Such marginally attached workers are people who have simply quit looking for work as a result of varying different reasons. Among these workers are those that they feel their efforts to find work would simply be a waste of time.
This attitude moves them into the discouraged worker group. Still others who have additional reasons for not looking for work are actually categorized as the marginally attached. These include people who wish to work and are bodily able to work, but who have not sought out work lately. Tallying them along with the other discouraged workers also adds a few more tents of a percentage point to the presently used official unemployment rate.
Finally, you come to the number that used to represent unemployment in the United States, the U6. U6 stands for all of the U5 people, as well as people who are only working part time. These part timers are also people who state that they would like to have full time work, but can not find it as a result of the present economic climate.
They are also known as the under employed. This is still considered to be the most inclusive and complete measurement of labor market unemployment that the government offers. The only problem with it is that no one pays attention to it seriously anymore. When you add the under employed back into the official unemployment rate number, it increases by several percentage points.
There is still something else going on with the number juggling act that the Bureau of Labor Statistics performs every month. The inclusion of the U4, U5, and U6 worker types is only supposed to increase the official unemployment rate by maybe four or five percentage points. Truthfully, the released U6 number is presently in excess of eighteen percent, while the official unemployment rate is only 9.7%.
What the Real Unemployment Numbers Mean You can see that if the country was still using the same measure for unemployment that you had when President Clinton took office, the unemployment rate now would stand at around eighteen percent. This means that actual and true unemployment is really about twice the official rate released every month.
Comparing this eighteen percent rate to the recession of 1983, it is substantially higher than the previous recent record high unemployment of just over ten percent. The real U6 number is an unemployment record going back well before World War II. In fact, it is almost what the unemployment numbers were during the peak of the Great Depression, when they broke twenty percent.
Why the Method for Figuring the Unemployment Rate Was Changed Bill Clinton was interested in legacies early on in his presidency. By changing the official unemployment formula to sweep away the so called discouraged workers, he attained a record low unemployment level not seen in decades. The reason for his changing the official unemployment calculation formula had a lot to do with “the economy stupid,” as he was fond of saying. He wanted the numbers to look better than they actually were.
Why Unemployment Is Actually Still Rising Despite What the Official Rate Claims As Nouriel Roubini and a number of other prominent economists have claimed, many of the jobs that have been lost in the U.S. are gone for good. Put another, more sobering way, you might say that they are never coming back.
As a result of the Great Recession, many companies have either forcefully increased their employees’ operating efficiency or outsourced their jobs to economies where the costs of labor are substantially less than in the United States. As if this were not bad enough news, all of the latest economic data has continued to demonstrate the many ugly signs pointing towards a double dip recession.
The economy has suffered from a dramatic transformation and it will not simply or easily go back to the levels that were seen before 2007. Prepare yourself for the grim, new economic reality.
I had heard about this before. They tried to blame Reagan for doing it to get re-elected. Lo and behold, Clinton did this!
NEVER LISTEN TO YOUR GOVERNMENT FOLKS!
I remember when Clinton was in office, and he was closing military bases left and right and huge companies were closing, but nothing ever showed up on the radar. We saw it, but they didn’t report it.
It would be interesting to know exactly how many people ARE working IN PRIVATE BUSINESS, devide that by the entire population to see how many workers are supporting the entire country
Gotta love those leftist minded socialists.
Before June of this year I lived in Springfield, MO and there were always homeless there. Maybe when the Dems are in power they have more money for shelters.
When you include city, county, state, federal govt employees including military too, prisoners, sick, lame, and lazy, I bet you are about right
Someone, please Ping Blam.
When you count the people who go to work but don’t do any, the number rises to about 90%. :)
Shadowstats.com
I refuse to go back to work until I get a year of unemployment insurance pay. That’s my final offer.
The problem is if you don’t have a job it doesn’t matter what the government tells you and with 20% out of work, everyone knows someone who can’t find a job.
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