Author: L. M. Walker

The Great, Obama Unemployment Rate Scam | LibertyWorks

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The Great, Obama Unemployment Rate Scam *

February 9, 2012 | By BoomerJeff *

Political communication in America is largely an effort to influence the perceptions of those who pay little attention to politics by stripping complex concepts and issues down to easily understood statistics and simplistic soundbites. In each of his first 33 months in office President Obama suffered because the easily understood Unemployment Rate remained very high. But over the past four months it fell from 9% to 8.3% and Obama and his media supporters are making the most of it. They tell us the economy has improved so much it is no longer an election issue and the President is no longer at risk of losing.

But it turns out that the Unemployment Rate statistic is misleading. It turns out that another statistic, the “Labor Force Participation Rate” has also declined. [Continued below the chart]

  • The Labor Force is the sum of all persons who have jobs plus all who are officially classified as “unemployed.”

  • The unemployment rate is computed by dividing the number of unemployed by the the labor force.

  • The labor force participation rate is the percentage of all working age adults who are officially counted as “in the labor force.”

Today, there are millions of people who want jobs but don’t qualify as “unemployed” by meeting government criteria and are thus counted as “not in the labor force.” We know this to be true because, as the chart shows, the participation rate has steadily declined for three years. Excluding people from the labor force artificially lowers the unemployment rate.

The chart above shows that the decline in the unemployment rate coincides with a decline in the labor force participation rate. The next chart shows what would have happened to the unemployment rate if the labor force participation rate had not not changed since the beginning of 2009. [Continued below the chart]

The last chart below tracks labor force participation and unemployment during the Reagan Administration. The labor force grew by 9% or 15.5 million people during the Reagan years. Participation grew from 63.9% to 66.1%. This chart is the picture of successful economic policies that increased liberty and decreased taxes and government intervention in the economy. Millions of new people entered the labor force but after the severe Recession Reagan inherited the unemployment rate declined because employers were able to replace all the jobs lost in the recession and hire the millions of people who entered the labor force. Reagan’s unemployment rate was not artificially reduced by excluding millions from of the labor force calculation and he was rewarded with reelection to a second term by the largest Electoral College landslide in American history.

Via: LibertyWorks – The Great, Obama Unemployment Rate Scam

I concur!

Mitt Romney’s Defining Moment | Indexing the Minimum Wage

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Is Mitt Romney a Liberal?

By: Larry Walker, Jr.

As Economist Thomas Sowell relays, in his piece entitled, A Defining Moment, “Mitt Romney has come out in support of indexing the minimum wage law, to have it rise automatically to keep pace with inflation.”

But according to Dr. Sowell,

“We have gotten so used to seeing unemployment rates of 30 or 40 percent for black teenage males that it might come as a shock to many people to learn that the unemployment rate for sixteen- and seventeen-year-old black males was just under 10 percent back in 1948. Moreover, it was slightly lower than the unemployment rate for white males of the same age.”

You may read the full text at Jewish World Review.

So what happened? Liberals imposed a series of minimum wage laws, virtually assuring today’s devastating rates of black teenage unemployment. So is Mitt Romney a Liberal? I can’t say for sure, but he’s most definitely not a conservative.

That’s right, lie to us Mitt. For we must defeat Obama at all costs – even if that means deceiving and destroying the Conservative movement, in the process. Will a real conservative please stand up and challenge this walking disaster before it’s too late?

Will Mitt Romney Repeal Obamacare?

/ L. M. Walker / 1 Comment

* Does a President have that authority?

* By: Larry Walker, Jr. *

In his Nevada victory speech, Mitt Romney once again publicly declared, “I will repeal Obamacare”. How so? Will Willard Mitt Romney single-handedly repeal Obamacare?

Although I am in favor of repealing Obamacare, and replacing it with a free-market solution, the last time I checked the Constitution, I wasn’t able to locate any passage granting the President of the United States the sole authority for repealing any law. Frankly I’m tired of hearing the same old false promise over and over again.

The truth is that in order to repeal or amend any federal legislation, Congress is required to follow the same procedures used in passing any new legislation. In other words, a new bill must be introduced by Congress either repealing or amending the existing law, and then it must pass both Houses of Congress, before being signed by the President.

So although the currently Republican controlled House of Representatives would favor repeal, the Democrat controlled Senate would not. And unless the Republican Party is able to win the presidency, along with a substantial majority in the Senate, while maintaining its present majority in the House; Mitt Romney won’t be repealing anything (i.e. He won’t be signing any repeal legislation.). As far as I’m concerned it’s just words.

What’s disheartening is that while Romney has made this bold proclamation publicly, literally hundreds of times, offstage as Ben Domenech notes in his Transom, Mitt Romney’s advisors have now advised him to support not repealing Obamacare. Norm Coleman, an advisor to Romney, went on record saying:

“We’re not going to do repeal. You’re not going to repeal Obamacare… It’s not a total repeal… You will not repeal the act in its entirety, but you will see major changes, particularly if there is a Republican president… You can’t whole-cloth throw it out. But you can substantially change what’s been done.”

Now I took Romney’s ridiculous blurb about fixing any holes in the safety net that exists for the very poor, for whom he is otherwise unconcerned, as a joke. Thanks Mitt, for keeping the very poor out of the way, and in everlasting poverty [sarcasm]! But his ongoing pandering plea to conservatives, that giving him the nomination will somehow empower a president Romney to repeal Obamacare, or any other law, is outright dishonest.

It’s hard to see how Romney’s practice of discrediting Newt Gingrich, alienating hundreds of thousands of Reagan conservatives in the process, can aid in the party’s winning or maintaining substantial majorities in both houses of Congress, let alone winning the presidency. I haven’t heard Romney mention anything about that. All I’ve heard him ramble on lately is what he will do by his lonesome, whether or not it’s reasonably possible, or even constitutional.

But aside from that, in the remote possibility that Republicans were able to win substantial majorities in both Houses along with a Romney presidency, what would a Romney Administration replace Obamacare with? Wouldn’t we just wind up with fifty state-run Romneycare’s?

Talk is cheap. Dishonesty is worthless.

That’s right, lie to us Mitt. For we must defeat Obama at all costs – even if that means deceiving and destroying the Conservative movement, in the process. Will a real conservative please stand up and challenge this walking disaster before it’s too late?

Manipulation 201: Playing With Unemployment

/ L. M. Walker / 3 Comments

*“Mene, Mene, Tekel u-Pharsin” ~ Book of Daniel, Ch. 5 *

* By: Larry Walker, Jr. *

The writing’s on the wall! The massive decline of new entrants to the civilian labor force, which is shown graphically in the chart above, directly impacts the unemployment rate, making the employment situation appear far better than it actually is. If the 9.3 million workers who have effectively dropped out of the labor force, since the end of 2008, were instead of being excluded, counted as unemployed, the real unemployment rate would be 13.0% instead of yesterday’s published rate of 8.3%. Even if only 55.0% of those who have been incontestably and wrongfully removed from the labor force were counted, which would be consistent with the eight-year average prior to Obama, the real unemployment rate would be 10.9%, not 8.3%. Never before in history has there been a more blatant manipulation of official labor statistics.

Those focusing all their attention on the number of jobs created in recent months are focusing on the wrong data. Lest we forget, the Bureau of Labor Statistics includes in its definition of the word employed – “persons 16 years and over in the civilian non-institutional population who, during the reference week, did any work at all (at least 1 hour) as paid employees.” So for all we know, a huge portion of those 200K and some odd jobs, allegedly created last month, were people hired for one hour, paid with taxpayer subsidized grants or loans, and working to register democrat voters in an effort to guarantee another round of Obamanomics. You laugh!

While we do need to watch out for the above, we really need to focus on the number of persons who have been summarily deleted from the labor force over the past three years. According the Bureau of Labor Statistics, the civilian labor force declined by 802,000 over this period. And even worse, another 8,481,000 new entrants, the majority of whom would normally have entered the labor force, are unaccounted for. So where are they? The Great Recession officially ended in June of 2009, yet 9.3 million Americans have gone missing over the past three years and one month. Thus, the question is, are they really missing, or has someone manipulated the unemployment rate in an effort to improve Obama’s chances for re-election?

The dilemma posed by a declining labor force is that as the civilian non-institutional population continues to grow by approximately 1.0% each year, millions of potential workers are forced out of the market. In other words, if there are not enough jobs for the existing workforce, then there are no jobs at all for the approximately 2 million new entrants who come into the job market each year. The devastating result is that a smaller proportion of the populace is working today, to support a much larger cluster of retirees, the unemployed, and those who are otherwise unaccounted for.

As you can see in the table above, according to the Bureau of Labor Statistics (Table A-1, not seasonally adjusted), the labor force grew from 142,583,000 at the end of the year 2000, to 154,287,000 by the end of 2008, for an increase of 11,704,000 workers over the eight-year period immediately preceding Obama. As such, the labor force was expanding by an average of 1,463,000 new entrants per year, for the eight years prior to 2009.

But from the beginning of 2009 through the end of 2011, the labor force declined from 154,287,000 to 153,617,000. Thus, after three consecutive years of Obamanomics, the labor force declined by a total of 670,000, for an average loss of 223,333 workers per year. The table has been extended through January of 2012, and as you can see, the labor force continued to decline by another 132,000 in January of 2012, as the number of workers fell from 153,617,000 to 153,485,000. Thus, a total of 802,000 have left the labor force since the end of 2008.

So it may be said that Obamanomics has caused the labor force, which should be expanding each year by a multiple of the increase in civilian non-institutional population, to instead be slashed by a total of 802,000 workers in just 37 month’s. This would be bad enough in and of itself; however if we are to believe the Bureau of Labor Statistics, from a macro view, the real employment situation is far worse.

When Obama’s declining labor force is compared with the growth of the civilian non-institutional population, also shown in the table above, we can see that a total of 9.3 million Americans have effectively been removed from the labor force during the last three years and one month (add together the amounts highlighted in the lower right-hand corner). This is the difference between periodic changes in the civilian non-institutional population (the 3rd column from the left), minus periodic changes in the labor force (the 2nd column from the right). It represents the periodic increase in the civilian working age population, which has been unfortunately added to the ranks of those counted as not in the labor force. And as we pointed out previously, a total of 6.5 million workers were removed in the three year period ending with 2011.

To be specific:

  1. In 2009, the civilian non-institutional population grew by 2,013,000, yet the labor force declined by 145,000, resulting in an increase of 2,158,000 persons counted as not part of the labor force. In other words, 2.1 million workers went missing in action (MIA).

  2. In 2010, the civilian non-institutional population grew by 2,029,000, yet the labor force continued to decline by another 253,000, resulting in an additional 2,282,000 counted as not in the labor force. That’s another 2.3 million MIA’s.

  3. Then in 2011, the civilian non-institutional population again grew, this time by 1,788,000, yet the labor force declined by another 272,000, resulting in 2,060,000 more persons counted as not part of the labor force. This resulted in another 2.1 million MIA’s.

  4. To top things off, in the first month of 2012, the civilian non-institutional population grew by an additional 2,651,000, yet the labor force further declined by 132,000, resulting in an additional 2,783,000 persons counted as not part of the labor force. Although January data is, as always, affected by changes in population controls, nevertheless it is what it is. Thus another 2.8 million Americans went MIA.

In effect, there have been no new entrants to the labor force in the past three years and one month, as 802,000 existing workers have dropped out of the workforce, and all 8,481,000 potential new entrants have fallen by the wayside. In all, that’s a total of 9.3 million workers who have effectively been pushed out of the labor force. For those paying attention, that’s a total of 8,373,000 persons who are not included in yesterday’s official unemployment calculation (9,283,000 less a seasonal adjustment of 910,000).

According to the Bureau of Labor Statistics, the official unemployment rate through January 2012 is 8.3%, as calculated in the table below, where:

[ (A) Total Unemployed / (B) Labor Force = (C) Unemployment Rate ]

However, if we were to add back the 8,373,000 workers who have effectively dropped out of the labor force, during Obama’s reign of misery, the real unemployment rate would be 13.0%, as calculated in the following table.

Even if only 55.0% of those who have been incontestably and wrongfully removed from the labor force were counted, which would be consistent with the eight-year average prior to Obama, the real unemployment rate would be 10.9%, not 8.3%. Eventually the majority of these 9.3 million working age Americans will start looking for work, and if upon entering the labor force, they are unable to find gainful employment, the unemployment rate should begin to rise towards its true rate, which would be between 10.9% and 13.0%, as stated.

Conclusion: In going all the way back to the year 1929, besides the years 2009, 2010, 2011, and potentially 2012, the only other years that the United States has ever suffered annual declines in its civilian labor force were 1943, 1944, 1945, and 1951. And as far as the 6.5 million who dropped out of the labor force entirely, over the past three years (not including 2012), that represents the worst consecutive 36 month period in United States history, also dating back to 1929. Since we are not presently engaged in a World War, with millions being drafted out of the civilian workforce, and with millions being killed in action, isn’t this proof positive that the unemployment rate is being manipulated?

Based upon the facts, the Great Recession never really ended, and the unemployment rate has been manipulated. I am 99.9% certain that the Obama Administration is playing with unemployment.

Prerequisites: Manipulation 101: The Real Unemployment Rate

Related: Unemployment Actually Rose in January, Media Screams “Unemployment Rate Declines!” – Is INCREASING Unemployment Something To Brag About?

** Updated on 2/7/2012 & 2/10/2012!

Mitt Romney’s Pro-Immigration Rant

/ L. M. Walker / 2 Comments

* Leading with the chin. *

* By: Larry Walker, Jr. *

Mitt Romney argued haphazardly, in the January 26th GOP Debate, that he is pro-immigrant, because his father was born in Mexico. Ah, so that’s it. He shouted, “Mr. Speaker, I’m not anti-immigrant. My father was born in Mexico…” That little proclamation was worse than his implication that Swiss and Cayman Island bank accounts somehow help create jobs in America. When I heard the former, my first thought was, ‘what does that have to do with being pro-immigrant’? And upon hearing the latter, I laughed out loud.

Was Romney’s father a Mexican immigrant who waited in a long line to cross the U.S. border “legally”? Well, not exactly. I believe Mitt’s grandparents sprinted across the border twice; once as felony fugitives of the United States government, and the second time to escape a band of Mexican marauders. So it sounds more like a matter of self-deportation followed by an act of forced-deportation than anything else.

Frankly, I would have countered Mitt with, “And why don’t you explain to us all exactly how your father came to be born in Mexico, since you chose to go there?”

And what could Mitt say?

I mean, come on! When we think of American immigrants, we think of men and women who journeyed from afar seeking liberty, and a better way of life. But that’s not exactly the story of the Romneys.

Actually, Mitt Romney’s father George was born in a Mormon colony in Chihuahua, Mexico. This may mislead one to the assumption that his parents were down there doing some kind of missionary work when he was born, right? But, that’s not exactly the way it went down. So how did Mitt Romney’s father come to be born in Mexico?

The Romneys wound up in Mexico due to an act of self-deportation from the United States. And although it may be true that the Romneys immigrated from the U.S. to Mexico in the 1800s, fleeing as fugitives and likely forfeiting their rights to U.S. citizenship in the process, it would be false to imply that his father was ever an immigrant to the United States. That is, unless the Romneys actually did forfeit their rights to U.S. citizenship. And you know what that would mean.

The fact is that when Mitt Romney’s great-grandparents fled the U.S. for Mexico in the 1800s, they were actually “felony fugitives” of the United States government. And when they returned to the United States in 1912, they were running for their lives from Mexican Revolutionaries, who also despised the practice of polygamy. One could make the case that the Romneys re-entered the U.S. illegally, more so than that his father was a bona fide legal immigrant.

How Self-Deportation Works

The Morrill Anti-Bigamy Act was a federal enactment of the United States Congress that was signed into law on July 8, 1862 by President Abraham Lincoln. The act was designed to target the Mormon practice of plural marriage and the property dominance of The Church of Jesus Christ of Latter-day Saints in the Utah Territory.

In 1882 the Edmunds Act, also known as the Edmunds Anti-Polygamy Act of 1882, was passed by the United States Congress replacing the Morrill Act. This was part of what by then was a 20 year struggle by the US government to curb the LDS practice of plural marriage in Utah Territory and other locations in the American West. Among other things, the law made the practice of polygamy a felony and disenfranchised polygamists. As a result, over a thousand Latter-day Saint men and women were eventually fined and jailed. Some were sent as far away as Michigan to fulfill their terms.

The Edmunds Act not only reinforced the 1862 Morrill Anti-Bigamy Act but also revoked polygamists’ right to vote, made them ineligible for jury service, and prohibited them from holding political office. Wow, that’s deep!

The Edmunds Act was later replaced by the Edmunds–Tucker Act of 1887. The new act prohibited the practice of polygamy and punished it with a fine of from $500 to $800 and imprisonment of up to five years. It also dissolved the corporation of the LDS church and directed the confiscation by the federal government of all church properties valued over a limit of $50,000. The act was enforced by the U.S. marshal and a host of deputies.

So to be straight up about it, Mitt Romney’s great-grandparents were polygamous Mormons who fled with their children from the United States to Mexico because of the federal government’s opposition to polygamy. Mormon genealogical records, among the most detailed and complete of any religion, show that two of Mitt Romney’s great-great grandfathers, Miles Romney and Parley Pratt, had 12 wives each. His grandparents, American born Gaskell Romney and Anna Amelia Pratt, immigrated to Mexico with their polygamous parents as children, were married in 1895 in Mexico, and lived in Colonia Dublán, Galeana, in the Mexican state of Chihuahua, where Mitt’s father George was born on July 8, 1907.

When the Mexican Revolution broke out in 1910, the Mormon colonies were endangered in 1911–1912 by raids from marauders. The Romney family then fled Mexico and returned to the United States in July 1912, leaving their home and almost all of their property behind. Mitt’s father George would later say, “We were the first displaced persons of the 20th century.”

Hogwash! The Romneys weren’t displaced, but were rather the first self-deported American citizens of the 19th century, and perhaps the only such in all of U.S. history. That is to say, they self-deported from their native country, after refusing to follow U.S. law for nearly two decades. And then were subsequently run out of Mexico by a group of well armed patriotic Mexicans. So if anything, the Romneys were self-displaced.

Is this why Mitt Romney is so passionate about the idea of self-deportation? I mean after all, out of every other presidential candidate, he would know a little more on this topic than anyone else, and certainly more than he lets on. I would contend that if Mitt Romney is somehow pro-immigrant, it has nothing to do with his legacy, but rather all to do with saying what voters seem to want to hear. But all this voter wants to hear is the truth.

That’s right, lie to us Mitt. For we must defeat Obama at all costs – even if that means deceiving and destroying the Conservative movement in America in the process. Will someone please stand up and challenge this walking disaster before it’s too late? When your opponent leads with the chin, that’s when you go for the jugular. And someone needs to do just that, because it’s starting to smell like 2008 all over again.

I honestly can’t get with Mitt Romney’s background anymore than I could ever get with the current abandoned anchor-POTUS’. If Romney is the best that conservatives can produce, good luck to you all with that. I would rather stake my last dollar on the real deal, even if it means defeat. I don’t know where you stand, but for me it’s principle over politics.

“When a man becomes a citizen of the United States under the Constitution, he cannot cease to be a citizen, except by expatriation for the commission of some crime by which his citizenship shall be forfeited.” ~ Sen. Jacob Howard

Also see:

Polygamy Prominent in GOP Presidential Hopeful Mitt Romney’s Family Tree

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Video | Newt Gingrich Delivers Keynote, Gets Cain’s Support

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* By: Larry Walker, Jr. *

Last night, GOP Presidential Candidate Newt Gingrich delivered an inspirational keynote speech at the Palm Beach County Republican Party’s 2012 Lincoln Day Dinner.

Congressman Allen West led off by defining the American value of equality of opportunity. Then Chairman Sid Dinerstein explained that scarcely any of the jobs created under the Obama Administration were full-time jobs, that nearly every single one of them has been part-time.

Next, Palm Beach County Republican Party Trustee Gay Hart Gains clarified the characteristics of the ideal presidential candidate, and declared that Speaker Gingrich is the one. And then, before Gingrich would take the microphone, former Presidential Candidate Herman Cain delivered a surprising, official and enthusiastic, endorsement for Newt Gingrich as President of the United States.

http://www.c-spanvideo.org/videoLibrary/assets/swf/CSPANPlayer.swf?pid=303980-1

It’s interesting to observe how many Conservatives continue to sit on the sidelines, focusing on things that really don’t matter, while others have made their stand with the anti-Reagan, Massachusetts moderate. At some point, all must make a choice. Will it be the Conservative, the Moderate, or the Socialist?

Conservative Envy | Romney vs. Gingrich

/ L. M. Walker / 3 Comments

* Round 15: GOP Debate

* By: Larry Walker, Jr. *

The first three minutes of the January 19th CNN-GOP Debate was such a crock that I turned it off and caught up with the highlights later on. In one less notable tirade, Mitt Romney exclaimed, “Mr. Speaker, you talk about all the things you did with Ronald Reagan and the Reagan Revolution and the jobs created during the Reagan years and so forth. I mean, I looked at the Reagan diary. You were mentioned once in Ronald Reagan’s diary. And in the diary he says you had an idea in a meeting of young congressman, and it wasn’t a very good idea, and he dismissed it. That’s the entire mention.”

Well first of all, the book is entitled, “The Reagan Diaries”, not the Reagan Diary.

Secondly, the meeting Romney referred to was concerning what at the time was considered to be a “horrendous” budget deficit.

As Reagan relays, on page 123, Newt’s idea for addressing the deficit was to “freeze the budget at the 1983 level”. Gosh, what a horrible idea!

Reagan penned that the idea was “tempting”, not that it was an outright zany notion. He went on to say that Newt’s idea, although tempting, would “cripple” his proposed defense program.

Actually there’s a little more to the story than that.

Reagan said he was worried that an across-the-board freeze on spending, with the exception of defense, would cause every special interest group to demand the same.

So in a sense, Reagan was willing to let the deficit spiral out of control, rather than take up that fight. Do you disagree?

We all know what happened subsequently. That’s right, by the 1990’s our nation would face a much more serious budget problem. One which would be combated with higher taxes. That is until this notion was finally quashed by the Gingrich Revolution.

So if nothing else, at least Romney inspired those with curious minds to pick up the Reagan Diaries for a badly needed refresher. And in retrospect, perhaps Newt’s idea wasn’t so bad after all, especially in light of our current fiscal crisis.

To be fair, George Romney was mentioned twice, on pages 249 and 415. Each mention was a short little blurb about his being the head of some kind of “volunteer initiative”, or something. Seriously, that’s the entire mention. Read it for yourself.

So what was Romney’s point? That his father got mentioned twice, for some trifle; while Gingrich was only mentioned once, regarding the most important issue of this era? Man, was that dumb!

Or was Romney trying to say that being mentioned twice in the Reagan Diaries is superior to once? If that’s the case, then what are we to make of the fact that Mitt Romney wasn’t mentioned at all?

If you ask me, this was just another anemic Romney exchange, worthy of the response it received — none. Perhaps Romney was signaling that he would never go for a spending freeze, under any circumstance. Who can decipher his reasoning? Nevertheless, he came off as one suffering from a classic case of Conservative Envy. Consequently, Romney is going down.

Sources:

The Reagan Diaries, pages 123, 249, and 415.

Quotation from: Real Clear Politics – Romney To Gingrich: “You Were Mentioned Once In Ronald Reagan’s Diary”.

Manipulation 101: The Real Unemployment Rate

/ L. M. Walker / 10 Comments

* Fake it until you make it. *

* By: Larry Walker, Jr. *

The following passage is from my last post, “Labor Force Contraction with Obama – And other hidden truths” :

“Most of the electorate understands that as the size of the labor force shrinks the unemployment rate declines. But is anyone really paying attention? Since this massive decline in the civilian labor force is a verifiable fact, it’s not surprising that the Obama Administration and much of the propagandist media have chosen to ignore it.”

Okay, I confess that I was begging the question. I am fully aware that most of the population doesn’t have a clue as to how the unemployment rate is calculated, and that a healthy subset could probably care less. So in this post I will explain in more detail how, as the size of the labor force contracts, the official unemployment rate declines.

First, here are a few key definitions, which are shown in more detail at the bottom of this post.

  1. The term “non-institutional civilian population” includes persons 16 years of age and older residing in the 50 States and the District of Columbia who are not inmates of institutions (for example, penal and mental facilities, homes for the aged), and who are not on active duty in the Armed Forces.

  2. The term “labor force” includes all persons, in the non-institutional civilian population, classified as employed or unemployed.

  3. And the term “not in labor force” includes persons aged 16 years and older, in the civilian non-institutional population, who are neither employed nor unemployed.

The table above shows the number of Americans counted as part of the labor force, from 2001 through 2011. It does not include those considered, “not in labor force”. You can see that during Bush’s first three years in office, although the economy was in recession, the labor force grew by 2,929,000 (on a seasonally adjusted basis). In contrast, the labor force has contracted by 739,000 during Obama’s first three years.

The dilemma posed by a declining labor force is that the non-institutional civilian population has continued to grow by approximately 1.1% each year. So in reality, the labor force didn’t only decline by 739,000 workers over the last three years (on a seasonally adjusted basis), but rather a total of 6.5 million workers dropped out (on a non-adjusted basis). What this means is that a smaller proportion of the populace is working to support a much larger cluster of retirees, unemployed, and those who have dropped out of the labor force.

As you can see, the labor force grew from 143,800,000 at the end of January 2001, to 154,626,000 by December of 2008, for an increase of 10,826,000 workers over the eight-year period immediately preceding Obama. The labor force was expanding by an annual average of 1,353,250 new entrants prior to 2009. But since January of 2009, the labor force has declined by an average of -246,333 workers per year. However, in the macro sense, the real employment situation is dramatically worse.

When the declining labor force is compared with growth of the civilian non-institutional population, as shown in the table below, it is clear that a total of 6.5 million Americans have dropped out of the labor force during Obama’s three years in office. This is the sum of the amounts highlighted in yellow (below). It is the difference between annual changes in the civilian non-institutional population, minus annual changes in the labor force. It represents the annual increase in the working age population, who are not being counted as part of the labor force.

For example, in 2009, the civilian non-institutional population grew by 2,013,000, yet the labor force declined by 145,000, resulting in 2,158,000 persons who should have, but did not enter the labor force. In effect, they dropped out. In 2010, the civilian non-institutional population grew by 2,029,000, yet the labor force declined by 253,000, resulting in 2,282,000 more persons who should have, but did not enter the labor force. Then in 2011, the civilian non-institutional population grew by 1,788,000, yet the labor force declined by another 272,000, resulting in 2,060,000 more persons who should have, but did not enter the labor force.

In effect, there have been no new entrants to the labor force in the past three years, as 670,000 existing workers dropped out (on an unadjusted basis), and all 5,830,000 potential new entrants fell by the wayside. Overall, 6.5 million working age persons have dropped out of the labor force under Obama. Is this change you can believe in?

The massive decline of new entrants to the labor force, which is shown in the table above, and graphically in the chart at the top, directly impacts the unemployment rate, making the employment situation appear better than it actually is. How so?

First, we must understand how the unemployment rate is calculated. The unemployment rate is calculated by dividing the number of unemployed persons by the size of the labor force:

[ (A) Total Unemployed / (B) Labor Force = (C) Unemployment Rate ]

Thus, the official unemployment rate of 8.5%, as reported by the Bureau of Labor Statistics in the January 6, 2012, Employment Situation Report, is calculated as follows:

[ 13,097,000 / 153,887,000 = 8.5% ]

What this means is that, at the end of the year 2011, 13,097,000 persons were officially unemployed, out of a labor force totaling 153,887,000. And so 13,097,000 divided by 153,887,000 equals the unemployment rate of 8.5%. So how could this result have been manipulated? Why, that’s easy.

Manipulation 101

“There are three kinds of lies: lies, damned lies and statistics.” ~ Mark Twain

First of all, it is a fact that not everyone who is actually unemployed is officially counted as such. In fact, according to the Bureau of Labor Statistics, millions of Americans of working age, who are not working, are excluded from the official calculation.

Mathematically, what this means is that they have been removed from both the numerator and denominator of the equation (i.e. from both the number of unemployed and size of the labor force). Those eliminated from the official unemployment equation are classified as, “Not in the Labor Force.”

A subset of those not included in the labor force is referred to as “marginally attached”. The marginally attached are persons not in the labor force who want and are available for work, and who have looked for a job sometime in the prior 12 months (or since the end of their last job if they held one within the past 12 months), but were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Discouraged workers are a subset of the marginally attached.

When it comes to manipulating the unemployment rate, the main question is: What happens when an equal number of persons are subtracted from both the number of unemployed and the labor force? To answer this, let’s look at an example in the table below.

Starting in the middle of the chart, let’s assume that there are 14,000,000 unemployed persons out of a labor force totaling 140,000,000. That would make the unemployment rate 10.0%. Are you with me so far?

Now, let’s remove 3,000,000, from the labor force, and see what happens. Moving one column to the left, you will note that the unemployment rate falls to 8.0%, or by 2.0 percentage points, as 3,000,000 people are removed. That’s a decline of 20%. Wow! That was easy.

If we were to remove 10,000,000 from the labor force, we would get an even more dramatic result. Moving two columns left of center; you will notice that the unemployment rate falls even farther, to 3.1%, or by 6.9 percentage points, as 10,000,000 people are removed. That’s a decline of 69.0%.

Just to add some perspective, it works both ways. Moving one column to the right, you can see that the addition of 3,000,000 to the labor force causes the unemployment rate to rise to 11.9%, or by 1.9 percentage points (an increase of 19.0%). And finally, the addition of 10,000,000 to the labor force causes the unemployment rate to rise by 6.0 percentage points, or to 16.0% (an increase of 60.0%).

So it may be stated that, the act of removing workers from the labor force causes the unemployment rate to decline. It is also evident that an expanding labor force, in which new workers are unable to find work, should cause the unemployment rate to rise. Another fact is that classifying more workers as “not in the labor force” causes a greater percentage decline in the unemployment rate, than the percentage increase realized by allowing a natural expansion of the labor force. Got it?

Therefore, when the unemployment rate is higher than desired, all one has to do is remove a few million workers from the labor force, and voilà, “We are moving in the right direction.”

Now I’m not necessarily saying that the Obama Administration purposefully manipulated the unemployment rate, but since the Bureau of Labor Statistics is a governmental agency, run by a presidential appointee, it’s highly probable. I’m just saying that I no longer have faith in the Bureau of Labor Statistics’ ability to remain impartial. Perhaps going forward the functions of this agency, as well as others, should be factored out to private non-partisan concerns.

What’s the real unemployment rate?

The Bureau of Labor Statistics (BLS) itself admits that among those it has subtracted from a labor force, several million actually want to work. So I ask you this, If an individual is not working, but desires to have a job, is he (or she) not essentially unemployed? I say, “Yes”, but the BLS says, “No”. So is this a material issue, or is it diminimus? In other words, how many people are we really talking about?

Well, let’s turn to Bureau of Labor Statistics – Table A-38, Persons not in the labor force by desire and availability for work, age, and sex (below). To be precise, as far as BLS methodology goes, as of December 31, 2011, a staggering 87,212,000 working age Americans were not counted as part of the labor force. Among these, it is reported that 81,077,000 do not want a job, and that another 6,135,000 actually want to work.

To reiterate, in my book, if someone wants a job and doesn’t have one, that person is unemployed and should be counted as such. What’s the point of calculating an unemployment rate, which doesn’t include all persons who are unemployed?

Regarding those included or excluded from the labor force, here are a couple of important items to note:

  1. First of all, the BLS only surveys around 60,000 households per month in order to come up with these figures. So as far as we know, the number of unemployed persons who want to work, but are not counted as part of the labor force, could be much greater than what’s being reported.

  2. Secondly, according to Footnote No. 1, in Table A-38 (above), not everyone reported as wanting or not wanting to work is asked. Wait, so not everyone is asked? You know the old saying, “Never assume.”

So, in light of the fine print, the entire sampling outcome is at best grossly inaccurate, and at worst subject to outright manipulation.

From Table A-38, we can see that 6,135,000 workers, not counted as part of the labor force, actually want to work. So what would happen if we added them back into the labor force? Well, let’s run it and see.

In the table below, when the 6,135,000 workers are added back to the labor force, and rightfully counted as unemployed, the unemployment rate jumps from 8.5% to 12.0% (an increase of 41.2%). Is a deviation of 41.2% of material importance? I would think so.

I would contend, that based on BLS data, the true unemployment rate is closer to 12.0%. But at the same time, since only a small sample is surveyed, who’s to say that a large portion of the other 81,077,000 working age individuals, not counted as part of the labor force, don’t want jobs? Did anyone bother to ask them? No. So the actual unemployment rate could easily be much greater than 12.0%. Are you still with me?

In the table below, I have calculated the maximum unemployment rate. That is to say, what it would be if all 87,212,000 working age individuals, not presently included as part of the labor force, were included. When we count them all, the maximum unemployment rate jumps to 41.6%.

You laugh? Well, I’m not laughing. So, based on information published by the federal government, the actual unemployment rate is somewhere between 12.0% and 41.6%. That leaves a lot of room for play, as the lowest the rate can possibly go is 0.0%, and the highest 41.6%. [By the way, the maximum rate doesn’t include those considered to be employed who, for all practical purposes, really aren’t (see the definition of “Employed”, below).]

Disregarding the Bureau of Labor Statistics sampling assumptions, the methodology of which you may find at http://www.bls.gov/, for all we know, a larger segment of the population is becoming homeless, generationally dependent, or permanently unemployable. I believe that there are several million more unemployed Americans, who want to work, than we are being told.

In my entire life-time, neither the Bureau of Labor Statistics nor the Census Bureau has ever called upon me to participate in one of these monthly, 60,000 household employment surveys. So who are they calling? How can they call someone who doesn’t have a phone? Where do these numbers really come from? From what I can tell, that’s classified information. Have they ever called you?

So while Obama tells us on the one hand, “We’re making progress,” in reality, all that’s happened is that a larger segment of society has given up any hope of ever having a job. Based upon the job killing policies of his Administration, I would say this is more likely to be the case today, than at any time in U.S. history. So this is progress? And now Obama wants another term to, “finish the job.” I think we’re already finished; the baby boom implosion will take care of the rest.

The Bottom Line: The official unemployment rate is misleading, and can be easily manipulated. By simply removing two or three million persons from the labor force (a little here, a little there), one can easily trim a couple of percentage points off of the official unemployment rate, and then declare that the economy is improving.

Since the beginning of 2009, the net result of Obama’s anti-success rhetoric, coupled with the most reckless deficit-spending record in U.S. history, has been an increase of 6.5 million workers who are no longer counted as part of the labor force. And on top of this, the economy has lost 1.7 million jobs, since February of 2009. The real unemployment rate isn’t 8.5%, it’s somewhere between 12.0% and 41.6%, perhaps even higher, depending upon one’s perspective.

In light of this reality, I find Obama’s statement, “We are moving in the right direction,” to be most absurd. Come on man! But on the brighter side, there is a tremendous opportunity for a new Administration to step in, in 2013, and show the Socialists, Progressives, and Communists who have taken over the Democrat Party, and the delusional fakers and wannabe’s in the White House, who are on their way out of power, what the “right” direction genuinely looks like. Godspeed!

Definitions:

  • Labor force (Current Population Survey) – The labor force includes all persons classified as employed or unemployed in accordance with the definitions contained in this glossary.

  • Civilian non-institutional population (Current Population Survey) – Included are persons 16 years of age and older residing in the 50 States and the District of Columbia who are not inmates of institutions (for example, penal and mental facilities, homes for the aged), and who are not on active duty in the Armed Forces.

  • Employed persons (Current Population Survey) – Persons 16 years and over in the civilian non-institutional population who, during the reference week, (a) did any work at all (at least 1 hour) as paid employees; worked in their own business, profession, or on their own farm, or worked 15 hours or more as unpaid workers in an enterprise operated by a member of the family; and (b) all those who were not working but who had jobs or businesses from which they were temporarily absent because of vacation, illness, bad weather, childcare problems, maternity or paternity leave, labor-management dispute, job training, or other family or personal reasons, whether or not they were paid for the time off or were seeking other jobs. Each employed person is counted only once, even if he or she holds more than one job. Excluded are persons whose only activity consisted of work around their own house (painting, repairing, or own home housework) or volunteer work for religious, charitable, and other organizations.

  • Unemployed persons (Current Population Survey) – Persons aged 16 years and older who had no employment during the reference week, were available for work, except for temporary illness, and had made specific efforts to find employment sometime during the 4-week period ending with the reference week. Persons who were waiting to be recalled to a job from which they had been laid off need not have been looking for work to be classified as unemployed.

  • Not in the labor force (Current Population Survey) – Includes persons aged 16 years and older in the civilian non-institutional population who are neither employed nor unemployed in accordance with the definitions contained in this glossary. Information is collected on their desire for and availability for work, job search activity in the prior year, and reasons for not currently searching. (See Marginally Attached Workers.)

  • Marginally Attached Workers (Current Population Survey) – Persons not in the labor force who want and are available for work, and who have looked for a job sometime in the prior 12 months (or since the end of their last job if they held one within the past 12 months), but were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Discouraged workers are a subset of the marginally attached. (See Discouraged Workers.)

  • Discouraged Workers (Current Population Survey) – Persons not in the labor force who want and are available for a job and who have looked for work sometime in the past 12 months (or since the end of their last job if they held one within the past 12 months), but who are not currently looking because they believe there are no jobs available or there are none for which they would qualify.

Link to Chart Data: Google Docs

Charts: Unemployment Rate vs. Size of Labor Force

/ L. M. Walker / Leave a comment

– Courtesy of Liberty Works

* The following charts track the unemployment rate and the size of the labor force. *

The chart above shows that over the first 25 months of the current recovery the unemployment rate has declined from 10.1% to 8.5% while the size of the labor force is virtually unchanged even though the working age population has grown.

Since the beginning of 2008 the working age population has grown by 7.2 million people.  Yet the labor force which is normally about two-thirds of the working age population has shrunk over the same period by 49,000.

Thus, 4.8 million men and women who should be included in the unemployment rate calculation as both in the labor force and unemployed are not counted at all because they have become too discouraged to look for jobs.

If those men and women were included in the unemployment rate calculation the December rate would have been 11.3%, higher than any time since 1940.

The second chart above tracks the first 25 months of the Reagan recovery of the 1980s. President Reagan inherited a sick economy and a deep recession that by most measures was worse than what President Obama inherited.  As the chart shows, the unemployment rate soared even higher but then there was a steep drop even as the labor force grew by 4.3 million!  People did not give up looking for jobs during the Reagan boom because there was robust growth in the economy and employers were creating hundreds of thousands of jobs every month.

[…]

There is a potential downside that could blow up Obama’s propaganda campaign. If the “good news” about the unemployment rate encourages several million people to come back into the labor force and seek jobs, the number officially classified as “unemployed” will increase and the unemployment rate will tick back up as the November election approaches.

Read the full story at – Liberty Works