Here’s something that many Americans — including some of the smartest and most educated among us — don’t know: The official unemployment rate, as reported by the U.S. Department of Labor, is extremely misleading.
Right now, we’re hearing much celebrating from the media, the White House and Wall Street about how unemployment is “down” to 5.6%. The cheerleading for this number is deafening. The media loves a comeback story, the White House wants to score political points and Wall Street would like you to stay in the market.
None of them will tell you this: If you, a family member or anyone is unemployed and has subsequently given up on finding a job — if you are so hopelessly out of work that you’ve stopped looking over the past four weeks — the Department of Labor doesn’t count you as unemployed. That’s right. While you are as unemployed as one can possibly be, and tragically may never find work again, you are not counted in the figure we see relentlessly in the news — currently 5.6%. Right now, as many as 30 million Americans are either out of work or severely underemployed. Trust me, the vast majority of them aren’t throwing parties to toast “falling” unemployment.
More at Gallup
As any sentient being knows, the numbers are cooked better than this CPA (who happens to be fairly handy in the kitchen) can even begin to ponder. How pray tell you ask? Look at the labor participation rate (LPR) and you can discern that they change the definition of “in the labor force” so that the resultant numbers show the U3 unemployment number (the one that gets the press) as favorable. Look at U6 (includes under-employed such as all the part-time who wish to be full-time) and combine that with the LPR and you get a better sense of where the economy really is versus the smoke DC is trying to blow up your lower orifice.
I’m only surprised they bother to use an actual stat. If the administration reported unemployment was at 0%, the media would print it in bold headlines and herald the achievement as a great miracle. The poor sons of bitches without jobs don’t matter at all to them.
If someone is not actively seeking work and has not been actively seeking work for over a month, they shouldn’t be counted among the unemployed. The unemployment rate, as the U.S. Department of Labor defines it, is designed to function as a useful measurement of an unmet need. It’s one of a number of readings on a panel that helps economists and business planners form a clearer picture of the state of the national economy—an economy so expansive that a accurate understanding cannot be formed by examining any particular geographical location or narrow sector of economic activity.
For such an indicator to be useful, you first have got to define specifically what it is you’re measuring. Obviously the unemployed can’t simply be a total count of people who aren’t working, because people don’t work for a variety of reasons: perhaps they’re too old, or they’re physically or mentally unable; maybe they’re staying home with children, or devoting full time to running households; maybe they’re students, or people who have been sufficiently successful in the past to be economically independent. Or maybe they’re seriously under-motivated—which, to my mind, might be getting into the the area of psychological disorders or possibly character defects. In any case, you clearly have got to exclude many people who aren’t working from the count of the unemployed, if you want the count of the unemployed to be a useful measurement of job need vs. job availability.
There’s simply no way to interrogate each unemployed person to determine why they’re not actively seeking work. Consequently you have to narrow things down in some other fashion. That’s where “has not been actively seeking work for over a month” comes in. If you haven’t been, your unmet need for a job—for whatever reason—surely isn’t very pressing. You’re not working, but it’s probably not because of the state of the economy.
If you don’t demonstrate that you’re looking for a job, and if you haven’t held a job steadily for a qualifying period of time in the recent past, you’re not going to qualify for unemployment compensation for the same reason. That’s not a perfect system either, but the intention of separating the unemployed from those who just don’t want to work is definitely there, too.
The point here is that the exclusion itself is being misrepresented for propaganda purposes. Excluding people from the count who haven’t been seeking work during the past month is necessary if the measurement is to be in any way meaningful and useful.
@Greg: You’re so mean toward the long-term unemployed, Greg!
Obama’s Treasury Secretary Jack Lew spoke to Bloomberg News in a September interview about the continuing problem of the long-term jobless;
He recognized this as a problem, not a subject for derision!
Recall that even mowing a lawn or babysitting for cash and being HONEST about it at the Unemployment Office results in cancellation of unemployment insurance for that period.
I look back on compassionate conservatism with longing compared with cold-as-ice Obama…..and Greg.
Labor Participation rate in 2014 was 69.7 %, you do the math as to what the real unemployment rate is.
@Coldwarrior57: Delusional Greggie would say ZERO. His hero can do no wrong. Must be great having such exceedingly LOW standards like Greggie.
@Greg:
Ever heard of the Census? They ask all kinds of questions. Some even related to the reason why we have a census.
Bullcrap. The only reason for excluding long term unemployed, is to sugar coat the reports and hide the true employment numbers from the American people. There is no purpose served by leaving them excluded beyond a political one. Anyone with integrity and basic math skills can calculate the actual numbers. This has nothing to do with Democrat or Republican political views, it is a deceitful means to disguise the truth from the public.
@Coldwarrior57:
Actually, it was 62.7 according to BLS.
http://data.bls.gov/timeseries/LNS11300000