Washington Times : Jobless rate hits 17 percent (unemployment problem is quickly getting worse)

Washington Times ^ | 10/6/2009 | Editorial

[SeekAndFind]

America's jobless crisis is much worse than the 9.8 percent unemployment rate reported Friday. To understand how there are many more unemployed than the government reports, it's necessary to look at the numbers used by the Bureau of Labor Statistics to calculate the unemployment rate. The Household Survey numbers paint a bleak picture that no one is discussing.

In September, the economy saw a net loss of 785,000 jobs. This amounts to twice the 392,000 loss in August and five times the 155,000 loss in July. This does not jibe with the Obama administration's talking points, which are parroted by most of the news media, namely that unemployment is not a major concern because job losses supposedly are getting smaller each month.

In August, the unemployment rate was reported to be 9.7 percent. It takes a lesson in how government measures unemployment to understand why it's possible for the unemployment rate to rise merely a tenth of one percent when 785,000 jobs have been lost. If someone has given up actively looking for a job, the government does not count that person among those who are jobless. Some of these people may have been unsuccessfully looking for a job for a year, but as soon as they stop actively looking, they are no longer unemployed.

This number of discouraged workers has risen dramatically. According to the Bureau of Labor Statistics, 807,000 additional people stopped looking for work last month. This constitutes by far the largest monthly drop in the number of people who don't consider themselves to be in the labor force during the past year during this recession. It is almost six times the 143,000 increase in the people who left the labor force during August and five times the average monthly increase of 161,000 over the past year.

[nascarnation]

"We're just trying to fix Bush's mess" You know its their campaign slogan for 2010

You're absolutely right.

My blood pressure went up 30 points just reading it.

[chris_bdba]

We are getting dangerously close to the unemployments numbers of the great depression. It is starting to get funny watching Obama and Biden both chime in about how the Stimulas is working? Where exactly is it working?

[6ppc]

As an unemployed person who is collecting unemployment you are required to look actively for employment to collect.

It seems to me that once your are off the unemployment rolls they have no way to track whether you are looking for a job or not. A lot of folks who no longer receive unemployment compensation are indeed looking for a job, but for the life of me I don't see how the government would know about it. Looks like accurate unemployment calculations are impossible to make at that point.

[AFPhys]

If you look at http://www.bls.gov/cps/eetech_methods.pdf you may reconsider whether there is any such thing “as it’s been defined customarily” ... There have been changes made throughout time about all these definitions of employment, unemployment, discouraged worker, “population”, etc. Most commentators seem to believe the changes have led to progressively lower statement of the unemployed rate. There was a major change in 1994. I can’t even really determine whether that one change “jimmied” the numbers significantly without deep reflection.

In addition, I wish to suggest that during times of higher economic stress (like now) from personal experience, the 6-10% who “refuse to cooperate” with the household survey have a significantly higher likelihood of fitting the “unemployed” definitions, instead of a simple “on vacation”, etc. When I am completely unhappy with life, I refuse to speak on the phone with anyone I don’t know personally. The result will again be most likely to understate unemployment during times of stress.

My opinion is that the most comparable measure of job status in the US is the Number of Employed persons, that number being obtained from the Household Survey. It might be nicer to have that obtained from the numbers of people having SS withheld or unemployment tax withheld, but I’ve not found where to get that information.

Certainly, though, given the changes in methodology and definitions through the years, it is difficult to defend that the BLS rates reported from 1960, 1970 or 1980 are exactly comparable to those of 2000 or 2008. How far they lead one astray is definitely debatable.

[AFPhys]

From the link I gave above:

"Unemployment also is categorized according to the status of individuals at the time they began to look for work. The reasons for unemployment are divided into five major groups: (1) Job losers, comprising (a) persons on temporary layoff, who have been given a date to return to work or who expect to return within 6 months (persons on layoff need not be looking for work to qualify as unemployed), and (b) permanent job losers, whose employment ended involuntarily and who began looking for work; (2) Job leavers, persons who quit or otherwise terminated their employment voluntarily and immediately began looking for work; (3) Persons who completed temporary jobs, who began looking for work after the jobs ended; (4) Reentrants, persons who previously worked but who were out of the labor force prior to beginning their job search; and (5) New entrants, persons who had never worked. Each of these five categories of the unemployed can be expressed as a proportion of the entire civilian labor force; the sum of the four rates thus equals the unemployment rate for all civilian workers. (For statistical presentation purposes, “job losers” and “persons who completed temporary jobs” are combined into a single category until seasonal adjustments can be developed for the separate categories.)"

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The "labor force" definition consists of those who are employed PLUS those who fit the categories above. Studying those a bit, you can see that people who are not looking for employment because they believe there is none available are NOT included any longer in the definition of the labor force. There is also no accommodation in this definition for those who are "underemployed". Therefore the denominator in the unemployed/total is always understated with respect to reality.

In this time of severe distress and high communication about realistic job prospects, I maintain again, that the result is a great understatement of the unemployment rate in comparison with historical figures.

[Oldpuppymax]

Yep. Things are moving along right according to plan, aren’t they Hussein! Unemployment, more dependence upon Big Brother and the Messiah-—right on schedule.

[livius]

The way it’s being defined here is the way it was defined during the Depression. I don’t recall the date that they changed the way of stating the figures, but it wasn’t very long ago...80’s or 90s, I believe.

[expat_panama]

"...the way it was defined during the Depression. I don’t recall the date.."

You may have heard it on one of these threads as a lot of people 'know' it for a fact but can't recall where it came from.   I can prove it by showing some of my own posts where I was passing this urban legend along.   

The Census Br. has records going back into the 1890's where the only breakdown was total and non-farm, and the bls posts dozens of unemployment levels depending on the need.    The 'headline rate' is often anything the pundit wants to cite to back his agenda.

[hinckley buzzard]

Why would any responsible American ( of which I am sure the majority are ) even GIVE UP looking for a job ? I know it’s hard but what other alternative do you have for your bread and butter ?

The key word is "responsible", which huge numbers of Americans ain't. Remember the "victims" of Katrina? Most of them had been feeding off the gubbermint tit for generations. "Work" was a foreign sounding word, sort of like a burp, which they had never heard of or understood.

But forget NOLA. Many others find better solutions, like moving in with parents or other relatives.

Then again, there is the great unmentionable elephant, the black and gray markets. Fully 20% of the American GDP is never counted because it is under the table and never reported (and never taxed). This is the Third World solution to stifling and corrupt government--drop out and go under the radar.

America is catching up to the turd world under Obama.

[hinckley buzzard]

This figure will keep rising each month and is on pace to hit 1.5 million in December alone.

Woops. There goes Christmas.

[Professional]

Did you know, that after a few years of the depression, Hoover kicked out like 500,000 illegals from Mexico? I didn’t, until reading about Hoover on Wikipedia recently.

[the invisib1e hand]

based upon headline unemployment and u6, it's somewhere in between.

See my other post.

[polymuser]

...a few years of the depression, Hoover kicked out like 500,000 illegals from Mexico...

Sometimes, you just have to do what you have to do for your fellow (real) countryman.

Teddy Roosevelt had the following thoughts in 1919 before he died:

In the first place we should insist that if the immigrant who comes here in good faith becomes an American and assimilates himself to us, he shall be treated on an exact equality with everyone else, for it is an outrage to discriminate against any such man because of creed, or birthplace, or origin. But this is predicated upon the man's becoming in very fact an American, and nothing but an American...There can be no divided allegiance here. Any man who says he is an American, but something else also, isn't an American at all. We have room for but one flag, the American flag, and this excludes the red flag, which symbolizes all wars against liberty and civilization, just as much as it excludes any foreign flag of a nation to which we are hostile...We have room for but one language here, and that is the English language...and we have room for but one sole loyalty and that is a loyalty to the American people.