Skip to comments.Ignore the Unemployment Rate (One of the most misleading numbers shaping our economy)
Posted on 02/07/2014 8:57:58 AM PST by SeekAndFind
The unemployment rate is one of the most consequential numbers shaping our body politic. Unfortunately, it is also one of the most misleading.
Today at 8:30 a.m., the U.S. Bureau of Labor Statistics released its monthly employment report, as it does at the start of every month. As usual, the announcement was widely covered in the financial and mainstream mediaa convenient hook for commentary about the state of the economy, the arc of the recovery and the future of the U.S.
The unemployment rate was a central factor in the 2012 presidential election, with President Barack Obama seemingly defying a powerful historical trend and winning re-election while the rate hovered at 8%. It was used to justify the nearly $800 billion stimulus bill in 2009. And the rate has remained in the spotlight through the early weeks of 2014, as the 1.3 million Americans receiving long-term unemployment benefits have become a source of political theater and ideological debate.
The unemployment rate, in short, is one of the most consequential numbers shaping our body politic. Unfortunately, it is also one of the most misleading.
It isnt just that the number is a statistical artifact, involving substantial estimation and frequent adjustments. Nor is it because the unemployment report as a whole combines two rather different surveysone of 557,000 businesses and their payrolls, another of 60,000 householdseach of which sheds a different light on the jobs picture.
The real problem is that the number, originally designed for limited purposes, has come to assume totemic status. Focusing so single-mindedly on this one employment figure has made it impossible to have a cogent discussion of labor in the U.S. and to design meaningful responses to our varied economic problems.
(Excerpt) Read more at stream.wsj.com ...
I’ve seen figures that put the real unemployment rate at 30-40%.
Five years of misleading and counting.
In the faculty lounge version when no one is working but no one is looking for work there is NO unemployment. These morons are a cancer on America.
All depends on the meaning of word “UNemployment”....BJC
Yes, the number is a joke. They count only those receiving unemployment and those actively seeking jobs by registering with state agencies. On top of that they superimpose birth/death data to further massage the number.
The only correct number can be found by looking at how many are paying social security tax, because every single soul who has a job or a business must pay that tax. But that would be too much transparency and too much embarrassment so the gov’t won’t tell us.
This is a bit like a NFL coach complaining about his offense being unable to score in the Red Zone, but pointing to all the yardage that they are racking up between the 20 yard lines.
It’s (the UE numbers) the system we have. It could be improved. We should stop ‘fudging’ the numbers. But there has to be a yardstick of sorts.
Repeal and Replace?
At this point what difference does it make? I have been told repeatedly by some members of this forum that the only reason people are unemployed is because they are lazy leech's who would rather sit home sucking off the government. I however am charitable about those forum members and just consider them ignorant with their broad brush strokes and generalities.
RE: On top of that they superimpose birth/death data to further massage the number.
Can you or someone please enlighten me on what this birth/death data is? I keep reading about it but don’t understand what it means... I know it is an estimate, but what is it an estimate of and why can’t we count on it?
RE: I have been told repeatedly by some members of this forum that the only reason people are unemployed is because they are lazy leech’s who would rather sit home sucking off the government.
I for one know of many people who are SINCERELY and ACTIVELY looking for work, taking anything they can get ( even part time or contract positions ).
The real problem is -— THERE ARE NOT MANY JOBS AVAILABLE OUT THERE. I can speak for those in our tri-state area — NY-NJ-CT.
For every one job open, I would say there are at least 10 candidates applying for it.
Well, when a lot of people have nothing left to lose it makes a lot of government assumptions invalid. (i.e. their estimates of how much people will tolerate the intolerable become increasingly erratic in their accuracy.)
If people have no jobs, this means that realistically speaking they have no income --granted that debt eases that crush-- and desperate people can do amazing things.
If the thought that the reason they don't have jobs is because of the oppression of the government, it could cause a lot of angry action; after all, our leaders are becoming more and more a
let them eat cake sort.
The key to fixing America’s economic problems is to end all statistical measurements of the economy. Those “facts” then create new “problems” needing government intervention which politicians are too happy to provide.
End the information and liberate the economy.
Clearly this administration does not want US citizens knowing just how effed the economy is so they propagandize the employment figures. Two other very critical portions on part of economic reporting, this administration does not include the cost of food and fuel in it’s cost of living reported figures. Maybe at some point they will tell us that water isn’t wet.
If only! I have been involved in one testing situation where I was testing against over seven hundred other applicants for ONE position, and that was just the testing phase prior to their deciding who to actually interview. On average the number of people I have been competing against for a job has been over a hundred and never less than fifty, and once again thats after the initial qualification weed out to go to the testing weed out prior to interview.
Ping for later
An even bigger problem is that the official unemployment rate is a big underestimate. Everyone acknowledges that it doesn't count those who have given up looking for jobs, but it also fails to account for the vast number of underemployed: skilled workers and even professionals who are stuck in dead-end, near minimum wage (and often part-time) jobs in retail or elsewhere in the unskilled service sector. A "recovery" where people with skills work at Wal-Mart isn't much of a recovery.
Seriously, where did you learn the above? I'd like to have the entire Economics department at George Mason contact them directly. Sheesh.
No, that is only part of the way they go about it. They also survey businesses.
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