I had a brief conversation with someone a few days ago about the unemployment report that came out on October 5, 2012. Recall that the night before, President Obama took a drubbing at the first of the Presidential debates of the fall. The numbers at face value seem to be great until you actually look at the statistics themselves. This person did not want to acknowledge that the report itself was possibly inaccurate and simply touted it as good news economically.
The media and the liberal politicians nationwide did much the same and immediately began to pound conservatives by basically saying “look it IS working,” but let’s consider a few interesting points (Some courtesy of Market-Ticker).
- Supposedly about 114,000 jobs were created in one month. The work force part of the population grew by 206,000 in one month. The basic math is that when the base grows by more than the number of jobs added, then unemployment actually went up.
- The Not-in-Labor-Force number, which are working age adults that are unemployed and not looking for a job any longer (basically, the people that are giving up completely) grew by 386,000 while the number of people that came off unemployment by gaining employment was about 775,000. That is 1,161,000 people that came off unemployment in one month.
- The Bureau of Labor’s most oft-reported number only counts what they deem the total unemployed (U-3) figure when it is seasonally adjusted. The problem with this thinking is that you are considered employed if you get a job that pays minimum wage and you only work for part-time. The more accurate number to gauge how the economy is doing is the U-6 figure, which is 14.7%. This figure in and of itself is still somewhat flawed as it only counts people that have looked for a job in the 12 month period. According to CNN, nearly one in three unemployed people nationwide have been out of work more than one year so they are not even factored into the unemployment rate calculated by the Bureau of Labor Statistics.
- According to the October 2012 BLS report, there are 243,772,000 people in the workforce population nationally. One year ago, there were 240,071,000 in the workforce population. That’s a net change of +3,701,000. The number of employed only grew by +2,832,000 however. So the number of jobs lagged the number of adults in the workforce by 869,000 jobs.
So the unemployment numbers went down? If there are 869,000 more adults in the workforce than there are jobs today than one year ago AND people that have been unemployed more than one year are not counted in the unemployment figures compiled by the BLS, than how in the world can unemployment be down? Go back to my first point – when the population grows faster than the number of jobs for the same population, unemployment rates actually go up. I smell some intentionally bad math.
So let’s extrapolate a little here. For the ease of math, let’s assume that the unemployment rate is actually 7.8% as that is a best case scenario. If one in three Americans that are unemployed have been unemployed for more than a year (which means that they are not factored into the unemployment rate reported by the BLS), then the actual unemployment rate is approximately 11.7%.
Job growth is not on pace to keep up, let alone exceed workforce population growth (Breitbart). The statistics fail to chart the long term unemployed, so the numbers “sound” better, but the overall picture is still grim.
You can bury your head in the sand and shout “7.8%!,” but if you fail to look at the whole picture, you will be mistaken.
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