Posted on 02/08/2009 8:30:26 PM PST by An Old Man
Government Unemployment Numbers — Not What They Seem
The official government estimates of the current unemployment problem are staggering in their own right.
All told, 2.6 million people lost their jobs in 2008. And, to underscore the accelerating nature of the problem, more than half of those job losses occurred in the final four months of the year. In December, a total of 11.1 million were unemployed. An additional 8 million people were working part time – up sharply from 7.3 million in November.
The average workweek in December fell to 33.3 hours. That's the lowest average on record, dating back to 1964, and a sign of more job reductions to come since businesses often cut hours before eliminating positions entirely.
Those are the “official” government numbers. But, as a closer look demonstrates, the unemployment figures can be understated – and misleading.
The government actually compiles unemployment figures in six different categories; as you might expect, the numbers tend to minimize the bad news.
The most commonly number quoted in the media is the “official” unemployment rate – known as U3 (the bottom line of the three in the chart below) – which now stands at 7.2%.
But to get the real picture, you have to add both in what the government refers to as “discouraged” workers (U4) and “marginally attached” workers (U5) – those who have stopped looking for work, or who haven't looked for work recently (represented by the middle line of the three in the chart). That number (U6) depicts an unemployment rate t that's approaching an eye-popping 14%.
And it gets worse.
If you include the people that the government doesn't even count – such as unemployed farm workers, the idle self-employed, and workers in private homes – the unemployment rate approaches an astonishing 18% (top line).
In other words, unemployment has insidiously spread to almost one-fifth of the U.S. work force, a number much larger than the single-digit figure commonly bandied about in the press. ( 4 people working 1 person unemployed)
If you regard unemployment statistics as an important means of gauging the overall health of a given economy, these “enhanced” statistics paint an ugly picture of just how painful this financial slump has become for the U.S. economy.
Layoffs of this magnitude are more than a mere shot across the bow of the economy; they're actually a direct hit amid ship – below the water line, meaning that sinking is inevitable.
Fully 70% of all domestic economic activity is powered by consumer spending. People who are unemployed cannot buy homes, don't shop heavily in retail stores, cut back on groceries, and are loath to take on added risk.
The numbers alone are bad enough. But in America's heartland, many of the approximately 80% of workers thatarestill working are caught in the grip of unemployment vise as well.
What's Next …
Overall, 48% of all companies downsized in 2008, and a staggering 60% are planning reductions in 2009, according to a Society of Human Resource Management survey.
Economists predict a net total of 1.5 million to 2 million or more jobs will vanish in 2009, and the “official” unemployment rate could hit 9% or 10%, underscoring the challenges that new U.S. President Barack Obama will face and the tough road ahead for job seekers.
Obama has called the jobs losses “a stark reminder of how urgently action is needed” to revive the nation's staggering economy. His administration is planning a stimulus package costing upwards of $800 billion , consisting of tax cuts and other ways to try to help individuals and businesses.
But unemployment is feeding into a vicious cycle that Washington policymakers are finding difficult to break. The jobless are now forcing almost all U.S. consumers – employed or not – to retrench for an uncertain future.
The true percent of unemployment is fast approaching 25%. Are we in a depression yet?
Very interesting. Thanks for posting.
Some People think so.
IMF May Run Out Of Cash To Fight Crisis In Six Months, Strauss-Khan Warns
The International Monetary Fund could run out of cash to firefight the economic crisis in as little as six months, its managing director has warned.
By Edmund Conway, Economics Editor
Last Updated: 7:02PM GMT 08 Feb 2009
Dominique Strauss-Kahn said the Fund needed an urgent cash infusion if it was to continue bailing out troubled economies in the future. Mr Strauss-Kahn also indicated that the world's advanced economies were now tipping from recession into full-blown depression, cementing fears about the scale of the economic slump in rich nations.
[snip]
L
Some of us have known this.
Sadly, ya can't believe a single word the government says.
Thanks to Reid, Pelosi, Dodd, Frank, et al.
Not a problem. How much do they want? We can just set the press on overdrive and print whatever they need.
The 1 said: "All this work is making my staff tired". I gotta go take a nap now.
We’ve been hearing about the big corporations and national chains, but not about local small businesses. The number of “Space Available” signs I saw in southern New Hampshire today between Nashua and Manchester was more than I’ve ever seen at one time before. Very troubling...
Official government statistics have been misleading for years.
If 20% of us are not employed, obviously nobody wants to borrow money for a new car or home. Throwing “money” at banks isn’t going to do anything.
Misleading statistics give people the impression that things are under control. If more people knew the truth, panic would overwhelm the government and political parties would lose support.
Look at inflation. The official government stats show 1 or 2 percent. Anyone shopping for groceries, or watching their electric bill go up know inflation has to be at least 10%.
How can smart people trust a government that lies and covers up the truth continously?
That recently released ‘08 GDP number was rather ... convenient.
“Looking for a Job?”
http://www.freerepublic.com/focus/f-chat/2136635/posts
Note: This thread is updated on a regular basis.
Also, some are unemployed by choice, for various reasons.
Poor health, retired, in prison, living off a trust fund/investments, supported by someone else. . .
Or...college tuition. At my school, in 1984, twenty-four years ago, annual tuition and fees was around $1,800. Now, it's $9,500 (for this year). The annual rate of increase, compounded, is seven and one quarter percent. And, my school isn't even the worst when it comes to tuition and fee increases.
Real inflation is in the eight to ten percent range.
Not to mention that in many states, the newly unemployed are having difficulty just getting through to their EDD or unemployment offices. In addition many states are now lacking funds to pay the recently unemployed.
“...taxes are too high on a 2nd income so it’s not worth it to work...”
Yes, the second income pays taxes, needs more clothes, commute costs, more eating out money, sometimes child care costs etc., more outsourcing of housework type stuff - the 2nd job doesn’t pay nearly as well as the 1st, usually.
Disclaimer: Opinions posted on Free Republic are those of the individual posters and do not necessarily represent the opinion of Free Republic or its management. All materials posted herein are protected by copyright law and the exemption for fair use of copyrighted works.