What is the Real Unemployment Rate in America?

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There is an old saying that has been attributed to Mark Twain, “Lies, damned lies, and statistics”. There are other versions of this phrase attributed to Mark or someone else. One is, “Figures do not lie but liars do figure”. This phrase has been defined as describing the persuasive power of numbers, particularly the use of statistics to bolster weak arguments or cast doubt on an opponent’s arguments. I begin writing with this information because there is no end to the data available regarding the unemployment rate, under employment rate, and the number of people in the work force in America. There is also no end to how these numbers can be “spun” for political purposes.

One indicator that the unemployment rate is well above 5 percent is the Labor Participation Rate. This data is the per cent of people in the population who are considered to be part of the work force and are actually working. Like most data and terms used by various government departments and special interest groups the exact definition of this term and how it is calculated varies. Regardless of how you calculate the per cent of people in the work force who are working the results indicate that on December 31, 2015 it was the lowest per cent it has been since the 1960’s. According to this data there are millions of people in America who still want to work but are not counted as being part of the work force now.

Another part of our work force that must be considered when you calculate the unemployment rate is the people who are underemployed. These are people who lost their jobs and had to take work that they are over qualified for or take part time work. I do not see how you can try and calculate the actual unemployment rate without considering these people. I am sure the vast majority of them are looking for full time work that they are qualified to do. Estimates as to how many of these people there are vary. One report I saw recently indicated it was 6.5 million.

Other data that must be considered when attempting to determine the size of the work force in America is the mortality rate. The number of people who die in America each year is a matter of record. But how many of them were still considered to be part of the work force when they died? Obviously this can be another “fuzzy” number.

What age people are considered to be out of the work force will also dramatically affect the calculated unemployment rate. Is it age 62, 65, or “and up”. I prefer the “and up” method because people in America are living longer and are more healthy and active in their later years than they were in the past. Some may change to a job with less stress or physical demands but they are still working much later in life.

Some people like to calculate the number of people in the work force in America to indicate that approximately 92,000,000 people are out of work. They count everyone in the population that is 16 years old “and up” as being part of the work force. They do not take people out of the calculation that are not in the work force by choice. Students, retired people, disabled people, or people who are taking time off work for personal or other reasons are counted as being in the workforce. If you take all these people out to make it a more reasonable calculation the unemployment number is still well above 5 percent.

Immigration also adds to our unemployment numbers. The US government issues over 1,000,000 visas every year but does not make any effort  to see that the people leave when their visa expires or verify that they are doing what they were admitted to the US to do. My recent post “Legal (?) Immigration” covers this topic in detail (posted on my website www.onlymakessense.com).

As you can see it is easy to spin these numbers any way you want depending on your political agenda. I became interested in the numbers when I noticed that the Obama Administration appeared to be manipulating them to suit their agenda midway through his first term. The more I looked into it the more questions I had regarding how it was calculated by our Government.

As I have explained above there are just too many variables and estimated numbers for me to calculate an unemployment number that I am confident saying is the actual number. However, after all my research I am absolutely convinced that it is higher than 5 per cent. I am also certain that we cannot trust the Obama Administration to do anything about a problem that it insists it has already solved!

The Government BLS chart “Alternative measures of labor under-utilization” is an example of how the numbers are reported differently. It indicates that the unemployment rate in January of this year was 9.9 per cent while the Obama Administration was loudly saying they had lowered the unemployment rate to 4.9 per cent.

The Labor Department just reported that only 58,000 net new jobs were created in May.  At the same time they lowered the unemployment rate to 4.7per cent!

We have one last chance to turn America around in November. Choose wisely!

 

 

 

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The opinions expressed in this commentary are solely those of the author and are not not necessarily either shared or endorsed by iPatriot.com.

Hardworking1

Retired senior executive, college graduate, deep interest in national and international currents events. Avid sportsman, conservationist, Veteran, "former" Federal Firearms License holder, and Concealed Weapons Carry permit holder since 1971. Strong believer in the U.S. Constitution. Libertarian on some issues but fiscal conservative on any level of government activities involving money. His articles can be found on his blog site, onlymakessense.com

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