http://americanthinker.com/blog/2014/10/a_good_explanation_of_the_real_unemployment_rate.htmlOctober 13, 2014
A good explanation of the 'real' unemployment rate
By Rick Moran
Everyone who isn't an Obamabot (Paul Krugman) or above the age of 5 knows that the current "official" unemployment rate of 5.9% is bogus. The real number that counts is the labor participation rate which has been shrinking for more than 5 years.
Why is the labor force participation rate important? Ken Braun of MLive has very clear explanation:
The U.S. “civilian noninstitutional population” - the total count of civilian adults - grew by 217,000 in September, according to the latest jobs report from the U.S. Department of Labor. Those new entrants represent immigrants, young people coming of age, military personnel re-entering the civilian world, and so forth. Total U.S. population grows by about 190,000 each month, so for our economy to remain healthy a big chunk of those 217,000 new adult residents should have or be seeking jobs.
But the jobs report also shows the U.S. labor force decreased by 315,000 last month. There’s a lot of ways to leave the labor force, such as death, retirement, going to college, and disability. Just giving up looking for work is another option.
Regardless of reasons, the net effect of a steadily rising adult population and sharply falling labor force isn’t pretty. It’s as if 217,000 adults joined the economy during the last month and yet made no attempt to help out. And on top of that, an additional 98,000 who were doing something in August also halted any attempt to pull a handle on our economic wagon in September. The headline number released last week - 248,000 new jobs created during September - pales in comparison to the much larger exodus of job seekers from our labor force.
A similar result occurred in August: 203,000 new members of the adult population joined, while the labor force shrunk by 268,000.
The culprit is the rapidly declining labor force participation rate. Pre-recession, it was 66 percent of the adult population or higher, but has now been at 63 percent or lower for all but one month of the last year. Looking for the difference between those two numbers can obliterate the officially stated unemployment rate of 5.9 percent.
The Economic Policy Institute, a Left-leaning think tank supported by labor unions, has factored out the retirees and other demographic exits from the labor force and still comes up with more than 6.3 million “missing workers” not counted in the official unemployment statistics. EPI says honestly counting them as unemployed zips the real September unemployment rate up to 9.6 percent.
"Where did they go?" asks Braun.
The Brookings Institution tabulates more than 5 million “disconnected youth,” Americans between the ages of 16 and 24 who don’t go to school, don’t have a job and don’t have any education higher than a high school diploma. And “Unfit for Work,” a recent National Public Radio report, showed the rate of Social Security disability claims jumped up both suspiciously and dramatically after the 2008 recession.
They called the generation of young people who fought in World War I "The Lost Generation" - a phrase coined by Ernest Hemingway to describe the aimlessness of young people traumatized by the war. With the rate of young people still living at home with their parents hitting record levels, and opportunities for decent paying jobs scarce, an unhealthy slice of the youth population appears to have simply given up on their lives.
And the record number of those on Social Security disability is indicative of older Americans also giving up. For young and old, Obama's economy has destroyed millions of lives as the president's policies "transform" America.
Perhaps what's most pathetic about these stats is that so many of these people voted for Obama in 2008 and 2012. In this, they have only themselves to blame for their predicament.
Everyone who isn't an Obamabot (Paul Krugman) or above the age of 5 knows that the current "official" unemployment rate of 5.9% is bogus. The real number that counts is the labor participation rate which has been shrinking for more than 5 years.
Why is the labor force participation rate important? Ken Braun of MLive has very clear explanation:
The U.S. “civilian noninstitutional population” - the total count of civilian adults - grew by 217,000 in September, according to the latest jobs report from the U.S. Department of Labor. Those new entrants represent immigrants, young people coming of age, military personnel re-entering the civilian world, and so forth. Total U.S. population grows by about 190,000 each month, so for our economy to remain healthy a big chunk of those 217,000 new adult residents should have or be seeking jobs.
But the jobs report also shows the U.S. labor force decreased by 315,000 last month. There’s a lot of ways to leave the labor force, such as death, retirement, going to college, and disability. Just giving up looking for work is another option.
Regardless of reasons, the net effect of a steadily rising adult population and sharply falling labor force isn’t pretty. It’s as if 217,000 adults joined the economy during the last month and yet made no attempt to help out. And on top of that, an additional 98,000 who were doing something in August also halted any attempt to pull a handle on our economic wagon in September. The headline number released last week - 248,000 new jobs created during September - pales in comparison to the much larger exodus of job seekers from our labor force.
A similar result occurred in August: 203,000 new members of the adult population joined, while the labor force shrunk by 268,000.
The culprit is the rapidly declining labor force participation rate. Pre-recession, it was 66 percent of the adult population or higher, but has now been at 63 percent or lower for all but one month of the last year. Looking for the difference between those two numbers can obliterate the officially stated unemployment rate of 5.9 percent.
The Economic Policy Institute, a Left-leaning think tank supported by labor unions, has factored out the retirees and other demographic exits from the labor force and still comes up with more than 6.3 million “missing workers” not counted in the official unemployment statistics. EPI says honestly counting them as unemployed zips the real September unemployment rate up to 9.6 percent.
"Where did they go?" asks Braun.
The Brookings Institution tabulates more than 5 million “disconnected youth,” Americans between the ages of 16 and 24 who don’t go to school, don’t have a job and don’t have any education higher than a high school diploma. And “Unfit for Work,” a recent National Public Radio report, showed the rate of Social Security disability claims jumped up both suspiciously and dramatically after the 2008 recession.
They called the generation of young people who fought in World War I "The Lost Generation" - a phrase coined by Ernest Hemingway to describe the aimlessness of young people traumatized by the war. With the rate of young people still living at home with their parents hitting record levels, and opportunities for decent paying jobs scarce, an unhealthy slice of the youth population appears to have simply given up on their lives.
And the record number of those on Social Security disability is indicative of older Americans also giving up. For young and old, Obama's economy has destroyed millions of lives as the president's policies "transform" America.
Perhaps what's most pathetic about these stats is that so many of these people voted for Obama in 2008 and 2012. In this, they have only themselves to blame for their predicament.
