I have often cited the various methods the government utilizes to keep the unemployment figure at a manageable level. Today, after the official unemployment rate fell to 7.8%, it became apparent just how blatantly political the process has become.
In September the U.S. economy added just 114,000 jobs. Just to keep up with population growth it needs about 220,000 additional jobs. But retiring Baby Boomers accounted for a drop of 325,000 people in the workforce numbers and 582,000 people are now considered “employed” by taking part-time jobs.
Then any evaluation must take into account the government reported total employment rose 873,000 in Spetember. That means, in addition to the 114,000 jobs created and 582,000 who took part-time jobs another 177,000 previously unemployed stepped into retiree’s jobs. But the number of people receiving unemployment compensation didn’t drop that much.
The last number shows how skewed the counting is. Counting man-hours worked, with 40 hours per week equally a full-time job, that means the 582,000 newly employed part-time individuals are averaging less than six hours per week–yet it counts as “employment” by our government!!!
Employment should mean you are able to at least support yourself with food, clothing, housing and energy with the job you hold. I just cannot believe this is a reasonable assumption on a 6-hour per week job.
Because of this surge in “employment” the average work week for each employed American took another hit and dropped to less than 31 hours per week.
Former General Electric boss Jack Welch flatly claims on his Twitter page “These Chicago guys will do anything…can’t debate so change numbers.” (1)
In the same Labor Department report, revisions for August and July were also made. August gained 46,000 jobs from the 96,000 reported and July also showed 40,000 more jobs than previously thought.
Professor Peter Morici of the Robert H Smith School of Business, Maryland University, was even more blunt about the drop. “We are still trending flat. If you went back to when the recovery began (June 2009) unemployment was at 10%. Making the adult perticipation rate to the same level it was then and we’d still be at 9.7-9.8%. The number of people no longer considered part of the workforce is a travesty.” (2)
The announced number caught many forecasters flat-footed. Most were expecting a slight rise to 8.2% or at best remaining at 8.1%. But expect the Administration to take the announced numbers and claim the economy is healthier than it is.
Morici pushed his claim even further by using economic data from households. “people’s real income have been falling now for about five years. The president is going to try and tell everybody, ‘Look, now you have put an “I’m for Work” sign in your front window, everything is working just fine. The economy’s just not getting any better and people know it.”
The problem is, state by state, county by county, the reported numbers do not match up with the BLS figures.
Here’s one of the problem areas faced by people trying to decipher the unemployment rate. A adult enrolled in college who has taken a part-time job to get back into the workforce is not counted as being in the workforce as a student but is counted as holding a job. This drops both the participation rate–which is needed to get the rate back to a level that trims unemployment by indicating a smaller denominator yet adds a filled job to the numerator part of the percentage by showing a job.
Government figuring is so misplaced the have the same person both not in the workplace but filling a job.
Here’s a novel suggestion for our government, count all adults ages 18-70 as “in the workforce.” Then subtract those 65-70 who have retired and are drawing government benefits. Then subtract the actual number of filled, living wage jobs as defined above. Take what is left and divide by the available workforce and you have an unemployment percentage people can believe in.
As long as the government manipulates the numbers, changes the parameters of the measuring stick month after month, nobody can have any faith that its pronouncements are accurate as Professor Morici correctly points out.
A citizenship that has lost faith in the integrity of its government is the first sure sign that government is in trouble, no matter how the election races evolve.
“I have sworn on the altar of God eternal hostility to every form of tyranny over the mind of man.”–Thomas Jefferson
(1)–Moneynews, Oct. 5, 2012, “Morici to Moneynews: Unemployment Fell on Part-time Workers
(2)–Jack Welch, Oct 5, 2012, Twitter, Obama Cooking Employment Books