More Unemployment Myths

Right From the Start

Right From the Start

There are lies, damned lies and statistics

– Mark Twain

An article in the Arizona Republic declared in bold headlines: “Chances of finding a job rise in the Western states.  I’m never quite sure whether these reporters lack a fundamental understanding of mathematics or they are just so intent on finding something positive in the dismal “Obama recovery” that they seize on just anything, including smoke and mirrors.  The article goes on to state:

“The odds of finding work in the Western states nearly matched the national average in December, nearly ending a six-year run of tougher prospects for the jobless in the West, federal data shows.

“There were 2.6 people officially unemployed in December for every posted job opening in the 13 states that make up the West, including Alaska and Hawaii.”

Clever those reporters.  Note the two disclaimers that otherwise pass for a factual statement – “federal data shows” and “officially unemployed.”

The reporter makes reference to the United States Department of Labor, Bureau of Labor Statistics Job Openings and Labor Turnover Survey (JOLTS).  Curiously, the survey does not make any comparison of job openings and unemployment – this is the reporter’s creation solely and only.  The JOLTS report does make a comparison to the number of those employed versus the number of jobs available (the sum of current employment plus the number of job openings) and creates a percentage of jobs not yet filled – that number has been hovering around 2.8 percent for most of 2013 and thus does not paint a picture of an improving economy.  Perhaps that is why the reporter made reference to “federal data” as opposed to a federal report thus giving it the appearance of reliable data when it is not.

No, to create the number referenced, the reporter took the number of job openings from JOLTS and divided it into the Bureau of Labor Statistics (BLS) unemployment data.  The problem there – and probably the reason that the BLS doesn’t produce such a number itself – is that the unemployment numbers are pointless.  They do not reflect the number of people unemployed – they reflect the number of people receiving welfare in the form of unemployment payments.  Even President Barack Obama’s most ardent supporters (apologists) acknowledge that the unemployment numbers, and particularly the unemployment percentages are bogus.  Perhaps that is why the reporter referred to the “officially unemployed” rather than those actually unemployed.  Apparently, unless you are included in the “official unemployment” statistics you aren’t really unemployed.  I guess you are – well, you are – oh, hell, I don’t know – resting, retired, vacationing, absent minded?  That may work for the reporter and the print media but for the millions of people still without work or the prospect of work under the “Obama recovery” it still feels like unemployment.

A July 2013 article in FORBES put the lie to the “officially unemployed” numbers:

“First, when the latest jobs report was released on Friday morning. It was generally heralded as a good report — for good reason. According to initial Bureau of Labor Statistics estimates, the U.S. gained nearly 200,000 jobs in June, and another 70,000 jobs appear to have been discovered in April and May. As a result, the nation’s official unemployment rate held steady at 7.6%; not great, but miles better than the 10% unemployment rate that the U.S. flirted with between 2009 and 2010.

“But the “official” unemployment rate doesn’t count men and women like G. — discouraged workers who have settled for part-time jobs or have given up looking altogether. Tracking those individuals, under what’s called the “U-6″ rate, gives a very different measure of the nation’s unemployment rate: 14.3%.”

So I checked the “U-6” report for December 2013 to try to get a more accurate figure than that used by the reporter.  It was 13.7 percent (unchanged from the previous month) compared to the 6.7 percent for the BLS “unemployment rate.”  Recalculating the reporters assertion that there were a mere 2.6 people for each job opening, to a more accurate number reveals that there were at least 5.5 people for each job opening – hardly a sign of robust recovery or even of hope that the misery index imposed by Mr. Obama and his policies will recede any time soon for the working men and women of America.

For the man who is the principal cause of the dismal job market and thus the repression of average income for working families to announce that his focus will now be on “income disparity” would be akin to Richard Nixon announcing – post-Watergate – that his focus would be on restoring integrity to the Office of the President.

  • marvinmcconoughey

    Thank you for the analysis.

  • DavidAppell

    Here are some more numbers for Larry to ponder.

    When Bush left office, the U6 rate was 14.2%. (It’s now 12.7%.) Of course, Obama could not have an immediate impact on the economy; the U6 rate peaked at 17.2% in December 2009.

    What would Larry have the President do? The sharp cutbacks in federal spending under Obama have lead to decreased demand, just as Keynesians said it would. (Same in Europe, as the IMF has admitted.)

    As a good Republican, doesn’t Larry care about the stock market?? The S&P 500 is up 115% since Obama took office. It’s up 23% since his second inaugural.

    The wealthy have benefited immensely under Obama. (Compare these to Bush’s numbers. Please.) And they can’t even be gracious about it.

    By the way, Larry, would you like to compare Obama’s job creation to that of Bush’s? Go ahead, I dare you:

    “Bush On Jobs: The Worst Track Record On Record,”
    Wall Street Journal, Jan 9, 2009

    • .

      Don’t go away mad, you’re already,,, so, just go away and
      don’t come back until you know jack schidt and are ready to accept conservatism as right, meet and salutary, DA!

      • DavidAppell

        Double feh.

        • .

          Faux Entitlements Halloo? Role out your barrell, Appell, and begone with Ye.

          • DavidAppell

            I am still waiting, after all these months, for you to say something substantive. When do you think that might be happening?

    • Bob Clark

      I have written here before we’ve had two poor performing presidents in a row now.

      But actually, Bush 2 scores better on total national employment and labor force participation than Obama. Bureau of Labor Statistics shows total U.S employment grew from 136 million in January 2001 to 143.3 million in December 2008 (Bush’s tenure), for a net gain of 7.3 million in U.S jobs or a rate of increase of 0.66% annualized. By comparison, total U.S employment grew from 142.1 million in Jan 2009 to 144.7 million in Jan 2014, or a rate of increase of only about 0.35% per year.

      Would also add labor force participation fell at a much slower rate during Bush 2’s tenure, falling from 67.3% to 65.7% over eight years. By comparison, labor force participation has fallen from 65.5% down to 62.8% in the last five years.

      Some of the decline in labor force participation is due to demographics, but Obama is most probably responsible for speeding the decline in the work ambitions of Americans. I.E Obama is trashing the work ethic. This is born out only this last week when the Congressional Budget Office reported U.S employment will be some 2 million less because of the Affordable Care Act. Obama’s economic policies raise the average effective marginal tax rate on working income from 40% in the Bush era to over 50% based on CBO references.

      And actually, Bush 2 enacted the first stimulus package which was actually what stabilized the economy in the first half of 2009. The first stimulus package bailed out the banking system and stopped a run on the banks. As Obama said at one point about his Stimulus 2 package, “I guess those jobs weren’t so shovel ready.”

      Your WSJ article is from ’09 and couldn’t anticipate the mediocrity which would follow (although many of us on the Right side of the dial did not bite on the “hopey, changey stick.”

      • DavidAppell

        Wow are you ever wrong.

        Look up the job numbers. Also, read this:

        Bush On Jobs: The Worst Track Record On Record
        Wall Street Journal, Jan 9, 2009

      • DavidAppell

        You are intentionally skewing the results by assuming Obama could create jobs on his first day in office. Of course, he could not — Bush Jr. owns the first 6 (or so) months of the Great Recession.


  • Jack Lord God

    Here is really all you need to now about unemployment. Obama came into office with a U6 of 14.2. It is now 12.7. That is pretty abysmal by any standard. However look at the real numbers.

    In Jan of 2010 U6 is 16.2, Jan 2011 U6 is 16.2, Jan 2012 U6 is 15.1, Jan 2013 U6 is 14.4. What does all that mean? Well, it means the American Recovery Act did absolutely nothing. After three years you are back where you started, except you spent a trillion dollars, all on a credit card.

    We only started getting better employment number when two things happened – the stimulus plan ended and government spending came under sequester.

    There has likely never been a better demonstration in world history of Keynsian economics being utterly wrong in its every prediction.

    Obama literally blew one trillion dollars and made the economy worse. Plenty of people predicted that, I was one of them and did so here.

    What is truly fascinating is we don’t see real plummeting of U6 until Jan 2013 . Why is this important? Because that’s when budget sequestration went into effect.

    So – The administration and fellow Keynesian’s predicted lowered unemployment if we passed the stimulus, The exact opposite happened. The predicted higher unemployment if we went into sequester, the exact opposite happened again.

    Again, like with Obamacare costs, Conservatives have been proven right in spades.

    U6 numbers

    • .

      Historians will ‘eventfully’ acknowledge “Gadfly Clinton” as tacking onto the heading of Bush Sr’s economic direction for US – and, then taking ‘soul’ credit for it. Ha!

      Let’s hope the truth that’s out there will become outed before another Clintoon becomes yet another half-fastidious occupier of the oracle office.

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