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Unemployment Really Isn’t 9.1%

The latest unemployment figure announced by the Bureau of Labor Statistics for the Month of September, 2011 was 9.1%.  This number has been consistent over the past three months: July through September, 2011.

From September 2010 to September 2011, the increase in the number of people NOT in the labor force was 1,856,000.  According to the Bureau of Labor Statistics, the total labor force actually declined slightly and the number of people employed increased by about 700,000 people during that time.  However, if the 1,856,000 are added back into the labor force, the unemployment rate is 10.16%.

According to economists, the current economic recession started in January of 2007.  The unemployment rate for 2007 was 4.6%.  From 2007 to September, 2011 the increase in the number of people NOT in the labor force was 7,311,000.  If these individuals are added back into the labor force, the unemployment rate is 13.45%.

People enter and exit the labor force for a variety of reasons, such as: 1. expiration of unemployment benefits; and 2. leaving the labor force to attend education and training full-time, to name a few.

Studenst who have graduated from high school or college without a job and enter the labor force are not counted as unemployed.  To be counted as unemployed, you must first have a job.  People also leave the workforce permanently through illness or death.  So there are many ways this number can change.

In addition, the way the Bureau of Labor Statistics counts people as unemployed has changed over the years.  Many of these changes have coincided with economic hard times when it would be to the advantage of the then current government to change the way the numbers are counted so as to show those numbers in a more favorable light.  This has occurred during both Republican and Democratic Administrations as well as the current administration.  As a result, it is very difficult to compare statistics from one recession/depression to another.

It also does not reflect part-time employment/underemployment which is 16.5 percent of the labor force.  Right now, there are many people who are working part-time who would like to have a full-time job, but are having difficulty finding one.  This “underemployment” statistic is not reflected in the 9.1% unemployment report.

To better understand what these numbers mean, consider the following:

A. 1,850,000 people is more than the populations of Wyoming, Vermont and North Dakota combined;

B. 7,311,000 people is about 81,000 less than the populations of Alaska, Delaware, Hawaii,Montana, North Dakota, South Dakota, Vermont, and Wyoming combined;

C. The 13,992,000 currently counted as unemployed by the Bureau of Labor Statistics is about 110,000 more than the combined populations of Alaska, Delaware, Hawaii, Maine, Montana, New Hampshire, North Dakota, South Dakota, Vermont, and Wyoming;

D. The combined underemployment/unemployment rate for the United States is 25.6% (9.1 + 16.5)of the workforce or 39,428,352 people either unemployed or underemployed in the United States.  That is one out of every twelve people in the country, more than the population of twenty-two (22) states. This is approximately equal to the combined labor forces of Ireland, Great Britain and Sweden.  These three countries had a combined GDP of US$2.923 trillion in 2010;

E. If the 7,311,000 people who were removed from the workforce starting in 2007, are added back into the workforce, the unemployment rate becomes 13.45%.  The total number of poeple either unemployed or underemployed is equal to 46,739,352, about 3.3 million more than the workforce of Germany, the largest economy in Europe and the 4th. largest in the world.  The unemployed/underemployed rate is 28.97% (13.45 + 16.5). Germany’s GDP for 2010 was US$3.286 trillion.

This means that the 9.1% unemployment figure actually masks how bad the economy really is.  During the Great Depression of the 1930′s, unemployment hit a high of 25% in 1932, but soon settled down to an unemployment rate that was in the mid-teens by the second half of the Great Depression, 1936 to 1939.  That mid-teens rate counted the people who were working in organizations like the Civilian Conservation Corps (CCC) and the Works Projects Administration (WPA) of the New Deal as unemployed.  Had they been counted as employed, the unemployment rate would have been around 13 or 14 percent.  In the 1930′s either you had a job or you did not.  Other than the obvious fact that everyone was a “discouraged worker”, during the Great Depression, there was no such thing as a “discouraged worker” in the economic statistics of the 1930′s.

To be able to defeat Barak Obama in November of 2012, these facts have to be brought home to the American people.  The unemployment rate is not 9.1%.  It is actually much higher!  Most Americans are not paying attention and do not understand this.  They are likely to simply accept what the government tells them every month concerning the unemployment rate and the economy.

There is an expression, “Figures don’t lie, but liars can figure.”  To allow the Obama Administration to continue to issue, unchallenged, dubious unemployment statistics, is to allow the Obama Administration to set the starting point for the discussion on unemployment and therefore the economy.  Unemployment is not 9.1%.  Real, easily verifiable, unemployment is over 13%. Underemployment and unemployment combined is at least 25% if not 30% and that point has to be brought home to the American people if Barak Obama is to be defeated in 2012.

COMMENTS

  • snowshooze

    They launder their numbers so hard to gain some political points that they absolutely cannot be trusted.
    But the benefit of the exercise is lost on me,
    The 20% know who they are, and they could care less the overall number. Nothing anyone tells them is going to make them any happier about it.
    I too am tired of these numbers being used as tools, not only is it an insult to our intelligence, it is dishonesty and paid for by the taxpayers of this country.
    It would seem quite simple to track true unemployment numbers through the SSA and payroll tax contributions, and that the census might be compared to those for a true evaluation of those working age citizens.
    Another useful benchmark number would be the quarterly total contributions and compare those over time.
    Either way would be a bit more tangible than the excessive cooking and spicing of the spoon fed product we now receive.
    Are the base numbers and raw data even available to us?
    I would think that they have to be, and on some slow evening I might take a stab at looking them up.

    • http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

      that still are but have no customers. I have some links I’m saving for a column on poverty that shows that 1 of every 5 American men are not working for various reasons and links that compare the number of people working in 2008 vs today and that adds in population growth to show real UN-employment at 19% not counting the UNDER-employed.

      more later on that later in the week

    • Jeffrey Malbis (malbis)

      The rate quoted by all the mainstream media is the U.3 rate, which is holding steady at 9.1%. That rate has only been used officially since the Bill Clinton administration. Both he and W benefited from it since unemployment looked even lower than it was.

      However… prior to the Clinton administration, the unemployment rate was much closer to what we now call the U.6 rate. That rate is also given in every official report, but doesn’t get as much press.

      The latest U.6 unemployment rate is 16.5%.

      If a Republican was in the White House right now, I bet the NY Times, WaPo and the nightly news would be throwing that 16.5% figure around a lot. And for all the years going back to the Great Depression–the 16.5% would have been the only unemployment number that was official.

      As if that number isn’t bad enough, some economists say it is still too low to reflect the real number of people out of work in our country. And snowshooze, even your 20% number isn’t high enough.

      According to Economist John Williams, who posts his analyses at his Shadow Government Statistics website, the current “real” unemployment rate is 23.1%. That takes into account all of the people who are actually unemployed, but are not officially counted because of various accounting tricks.

      So take your pick: 9.1% if you figure things based on a European statistical model. 16.5% if you figure unemployment the way it was calculated for most of the 20th Century. Or 23.1% if you include all of the underemployed, the formerly self-employed and those who have been out of work so long the government now basically wants to forget about them.

      No matter — as the old saying goes, “it’s a recession when your neighbor is out of work, but a depression when you don’t have a job.” And there are a lot of people out of work in this country who don’t give a hoot what the official rate is as long as there are still no jobs to be had.

      Voting should be interesting next year.

  • Common_Cents

    One measure they haven’t yet masked. Nearly 1 in 6 people. A staggering number.

  • fbks

    is those that have never had a “job” but always been self employed. Either employing themself, or up to a couple dozen employees, (who would count). Every one I know in this group is done or seriously hurting.

    • conservativecurmudgeon

      Especially when put in the mixing bowl with the numbers of folks on food stamps, and other forms of assistance.

      The lid can’t be kept down forever on this powder-keg. Great analysis.

      • funwithknives

        to get the MM on board? We’re both in Michigan and we surely know the real numbers locally, and is NOT 9.1%. Any job fair has insane turnouts, here-abouts. Quicken Loans/Dan Gilbert recently advertised for 200+/- openings, and at least 2,500 showed up.
        If the BLS has stats on those who stopped looking, why not just show both of them and let America do some simple addition?

        • conservativecurmudgeon

          The leftist-media complex are one–NOTHING will change them. They are invested too thoroughly in statist authoritarianism, primarily because they are steeped in the j-school boutique Marxist garbage that’s been spewing from the academy for sixty years now, and that gives them the patina of “intellectualism”. People don’t go into medicine because the journalism school turned them down. ‘Tis the other way around. “Communications” majors are even worse.

          Our old system of mass information is on the verge of broad scale collapse. The viewership of the three major network newscasts would cause Walter Cronkite to slit his wrists if he were anchorman today.

          The only thing that will save Michigan, by the way, is a revolution of freedom. If we can get Michigan back to how it was as a tiny-government, huge-commercial state, we will have a chance. Ricky Snyder, though, is hardly up to the task. The legislature, yes… Snyder, no.

          • funwithknives

            Once again, a promise shattered. We all see now why he was so non-specific. like it or not you can’t really calll him a liar, but you could see some “weasel”, in there somewhere.
            Where are the backbones,we all so sorely need?

    • http://www.examiner.com/x-1597-Charlotte-Law--Politics-Examiner Mike gamecock DeVine

      before I saw this. This number also includes lots of Blacks that became entrepreneurs in the late 90s and early to mid-2000s that are hurting and will not be voting for Obama and the Dems in 2012. In fact, many sat out 2010.