U.S. Labor Force Declines by 720K

October Unemployment Manipulation

– By: Larry Walker II –

The big story out of the October household survey was the decline by 720,000 in the headline labor force, which largely reflected the loss of longer-term unemployed into the broader U-6 unemployment measure.

In fact, since January 2009, the U.S. Labor Force has only grown by 607,000. Yet, over the same period, 11,034,000 persons have been removed from the labor force (see chart above). Once removed, such are neither counted as employed nor unemployed, each amounting to the equivalent of zero-fifths of a person in terms of modern governmental accounting.

In Manipulation 101: The Real Unemployment Rate, we learned that as the size of the labor force erodes, the unemployment rate artificially declines. So let’s recall 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 7.3%, as reported by the Bureau of Labor Statistics (BLS) on its November 8, 2013, Employment Situation Report, was calculated as follows:

However, when the 720,000 longer-term unemployed which were removed from the labor force in October are added back, the real unemployment rate actually rose to 7.7% (shown above). And, if we were to add back all long-term unemployed workers, removed from the labor force since February 2009, the real unemployment rate would be 13.4% (also shown above).

As I reported earlier this year, in Black Unemployment Rate Closer to 37.9%, there is an alternative to the federal government’s phony reporting. Shadow Government Statistics publishes a more accurate measure of unemployment based on pre-1994 BLS methodology. The seasonally-adjusted SGS Alternate Unemployment Rate reflects current unemployment reporting methodology adjusted for SGS-estimated long-term discouraged workers, who were defined out of official existence in 1994.

In other words, the SGS Alternate Rate adds millions of long-term discouraged workers back to the BLS estimate, which only includes short-term discouraged workers. In case you didn’t catch that, this means the BLS has eliminated long-term discouraged workers (i.e. those who have been without a job for so long that they haven’t bothered to look for work in more than 12 months) from official unemployment statistics since 1994, thus distorting the true employment situation.

Accordingly, although the Bureau of Labor Statistics boasts of an official U-3 unemployment rate of 7.3%, and an official U-6 rate of 13.8%, the real unemployment rate, based on pre-1994 BLS methodology, has actually increased from 18.3% in January 2009 to 23.5% as of October 2013 (shown above).

Of course the Chief of the White House will simply continue to repeat something like, ‘Now that we’ve fixed (i.e. effed up) the nation’s health care system, it’s time to finish fixing (i.e. effing up) the economy.’

“How long, O LORD? Will you forget me forever? How long will you hide your face from me?” ~ Psalm 13:1 (ESV)

Related: #unemployment #manipulation

U.S. Government Manufactures 469,000 Jobs

Phony Current Employment Statistics (CES)

“How many legs does a dog have if you call the tail a leg? Four. Calling a tail a leg doesn’t make it a leg.” ― Abraham Lincoln

– By: Larry Walker, Jr. –

According to the U.S. Bureau of Labor Statistics (BLS), via its September 26th CES Preliminary Benchmark Announcement, the number of Private Sector Jobs reported in March 2013 was overstated by 136,000, and the number of Government jobs was understated by 12,000. But not to be outdone by a deteriorating economic reality, the BLS eliminated this bad news through a major change in its reporting methodology. After the change, instead of an overstatement of 124,000 nonfarm jobs (-136,000 + 12,000), the BLS will instead be reporting a net gain of 345,000 jobs on its January 2014 employment situation report. It’s magic!

Here’s what the BLS said (emphasis mine), followed by the translation in plain English.

“Each year, employment estimates from the Current Employment Statistics (CES) survey are benchmarked to comprehensive counts of employment for the month of March. These counts are derived from State Unemployment Insurance (UI) tax records that nearly all employers are required to file. For National CES employment series, the annual benchmark revisions over the last 10 years have averaged plus or minus three-tenths of one percent of Total nonfarm employment. The preliminary estimate of the benchmark revision indicates an upward adjustment to March 2013 Total nonfarm employment of 345,000 (0.3 percent). This revision is impacted by a large non-economic code change in the Quarterly Census of Employment and Wages (QCEW) that moves approximately 469,000 in employment from Private households, which is out-of-scope for CES, to the Education and health care services industry, which is in scope. After accounting for this movement, the estimate of the revision to the over-the-year change in CES from March 2012 to March 2013 is a downward revision of 124,000.”

What this means in plain English is that the BLS has once again changed the rules of the game, this time adding an estimated 469,000 Private Household Employees to its accounting of private sector jobs. So what’s wrong with that? Aren’t private household employees considered part of the private sector? The answer is no. Private household employees have never before been considered part of the private sector. The main reasons they have not been are as follows: (1) the BLS has no way of knowing how many household employees really exist, (2) no idea how many are considered full-time, part-time or temporary, and (3) will have virtually no way of tracking changes in the number of such employees on a monthly basis (i.e. its reports are issued monthly).

Unlike private sector businesses, which are surveyed monthly and file quarterly employment reports, private households are not surveyed in the same manner and only file employment reports on an annual basis. According to the Internal Revenue Service (IRS), although household employees are most commonly associated with child care providers, such as nannies, private household employees also include service providers such as gardeners, cleaning personnel or maids, babysitters, housekeepers, private nurses or home health aids and drivers or chauffeurs. Since such employees have never been included in private sector reporting in the past, the federal government’s employment statistics after January 2014 will be forever inconsistent with every prior period.

The table above, courtesy of the BLS, shows the March 2013 preliminary benchmark revisions by major industry sector. I have added a second column showing the changes without the addition of the newly concocted 469,000 private household employees. As you can clearly see, consistent with all prior CES statistics, there are actually 124,000 fewer nonfarm jobs than previously reported.

The bottom line: The number of private sector jobs reported in March 2013 was overstated by 136,000. The number of government jobs reported for the same period was understated by 12,000. That’s reality. Those are the facts. Just like the Bureau of Economic Analysis has been overstating Gross Domestic Product due to changes in its reporting methodology, the BLS has been following suit. As the U.S. economy continues to crumble, aside from QE3, the only tool the federal government has left to combat this new reality is to lie through its teeth. Changing the rules midstream in order to paint a rosy economic scenario through phony statistical reporting is not only dishonest, but reprehensible. The problem with lying is that eventually reality catches up. When there are no longer any warning signs, yet the national economy collapses, who will you blame?

Related:

2013 GDP Growth Rate Closer to -1.75% ― Phony Government Statistics: GDP

Black Unemployment Rate Closer to 37.9% ― Phony Government Statistics, Detroit and Black Americans

Entertainment R&D Boosts Federal GDP Calculation Following Formula Changes

The new GDP methodology: What you need to know: U.S. economy over $500 billion larger due to new definitions

Government Economic Reports: What You’ve Suspected but Were Afraid to Ask.

The Great, Obama Unemployment Rate Scam | LibertyWorks

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!

Manipulation 201: Playing With Unemployment

*“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 democratic 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!

Manipulation 101: The Real Unemployment Rate

* 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 Democratic 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

Black Employment | Back to the 1970s

– Halfway to Nowhere

– Larry Walker, Jr. –

One of the figures that stood out in the July 2011 Employment Situation Report was that Black labor force participation had declined to 60.4%, or to the same level attained in March of 1973, from a rate of 63.2% in January of 2009. The rate has fluctuated between a record low of 58.5% during 1975, to a record high of 66.4% in 1999. It stood at 63.4% in December of 2007, the first month of the Great Recession, and clocked in at 62.6% when the recession ended in June of 2009. In fact, the rate hasn’t dropped below 62.0% since May of 1984. But since February of 2009, the Black labor force participation rate has declined by 2.8 percentage points, and most of that decline, 1.7 points to be precise, has occurred since the beginning of 2011. So why did Black labor force participation suddenly plummet during Obama’s 3rd year in office, over two years after the recession ended?

Black labor force participation rate – The labor force participation rate measures the labor force as a percent of the civilian non-institutional population.

From Black Employment – July 2011

Why hasn’t a Black White House resident correlated with improvement in the lives of Black and African American people, or anyone else for that matter? It’s one thing to be giddy that a Black man made it into the White House, but entirely another when you take a look around the community. The fact that the Black labor force participation rate has fallen back to 1970s levels, and exclusively on Obama’s watch, either means that his policies aren’t working; or that they are, but just in reverse.

For example, does the act of extending unemployment benefits to an historic 99-weeks mesh with increasing labor force participation? Is the act of handing out record amounts in government food stamps somehow in lock-step with prosperity? Does legislation providing a $50,000, per unemployed household, government subsidy to cover mortgage payments for up to two years help get folks back to work? Will Obama’s policies of doling out record amounts of unemployment, food stamps, and $50,000 per household mortgage subsidies, concurrently, lead us out of the ditch, or over a cliff? When ‘shovel ready’ turned out not be so shovel ready, it appears that this was Obama’s Plan B.

The Black employment-population ratio is also at 1970s levels; while the Black unemployment rate, although not the worst ever recorded, has averaged 15.6% since February of 2009.

Black employment-population ratio (Current Population Survey) – The proportion of the civilian non-institutional population aged 16 years and over that is employed.

The Black employment-population ratio has fluctuated between a record low of 48.8% from December of 1982 through January of 1983, to a record high of 61.4% in April of 2000. It stood at 57.7% in December of 2007, the first month of the Great Recession, was 55.2% in January of 2009, and clocked in at 53.3% when the recession ended in June of 2009. It has since declined to 50.8% as of July of 2011, a decline of 4.4 percentage points since Obama’s inauguration.

From Black Employment – July 2011

Black unemployment rate – The unemployment rate represents the number unemployed as a percent of the labor force.

The Black unemployment rate has fluctuated between a record low of 7.0% in April of 2000, to a record high of 21.1% in January of 1983. It stood at 9.0% in December of 2007, the first month of the Great Recession, was 12.7% in January of 2009, and clocked in at 14.9% when the recession ended in June of 2009. It has risen to 15.9% as of July of 2011, an increase of 3.2 percentage points since Obama’s inauguration.

From Black Employment – July 2011

At a fundraiser in Chicago on August 3, 2010, Barack Obama remarked, “…But the thing that we all ought to remember is that as much as good as we have done, precisely because the challenges were so daunting, precisely because we were inheriting so many challenges, that we’re not even halfway there yet. When I said ‘change we can believe in’ I didn‘t say ’change we can believe in tomorrow.’ Not change we can believe in next week.”

Well, it’s been about two and a half years already, so if they’re not even halfway “there” yet, does that mean it will take another 3, 4, 5, or 40 years? And exactly what does Obama mean by, “we’re” and “there”? Who is we, and where is there? It looks to me like our nation is around three-fourths of the way to declaring bankruptcy; the economy is maybe four-fifths of the way towards a depression, and the labor force statistics for Black and African Americans have receded to levels not seen since the 1970s and early 1980s.

So if I’m reading this correctly, as long as Obama has the bully pulpit, change will kick-in after my girls graduate from college, but not right now when it’s needed? Just wait a few more years, after my twin granddaughter’s start pre-school, but not now, two month’s before their birth, when my son needs it, eh? Heck, it may take another 40 years just to fill in the trench Obama has dug. I guess since ‘shovel ready’ wasn’t as shovel ready as he thought, and since “we’re not even halfway there”, unemployment benefits will have to be extended for another 99 weeks, while those who are able to endure carry the water. Heck, we might as well extend unemployment benefits for the rest of Obama’s term, since according to most of today’s Democratic Party, unemployment compensation and food stamps add more to the economy than the private sector anyway?

Obama has turned this economy around alright — back to the 1970s. Now he wants another four years, after he campaigns his way through the remainder of this term? Thanks, but no thanks. Every policy he’s put on the table has failed. The fact that he lost the USA’s triple-A credit rating, through devil-may-care spending, ought to say it all. What would the USA’s credit rate be after another term, since he’s only halfway there, BBB? Four more years to bobble his head from one teleprompter to the other, lecturing us on bugged out Socialist ideals from decades past, yeah right! If his plans don’t work in the real world, it may be that they are simply outdated. I say it’s time for Conservatives to take the horns of this democracy, and make a quick U-turn.

Halfway to nowhere – Heck, Obama’s policies might be succeeding beyond our wildest dreams, but we just can’t see it. Maybe where we get confused is when we open our eyes and look around. After all, he never said it was change we would be able to see, or change that would actually occur. He merely said it would be something intangible, an idea that we could believe in. In other words, a fairy tale, a chimera of the way we wish things were, but know they could never be. A world where electricity is generated without power plants, where heating oil rains down like manna from heaven, and where a big government hands us everything we need. But when we keep it in the day, and open our eyes, what do we see? – An incompetent, partisan, rascal, spouting half-truths, and railing away at his enemy, which turns out to be at least half of America.

“The best social program is a good job.” ~Bill Clinton

“I do not believe we can repair the basic fabric of society until people who are willing to work have work. Work organizes life. It gives structure and discipline to life.” ~Bill Clinton

“Nothing in this world can take the place of persistence. Talent will not; nothing is more common than unsuccessful people with talent. Genius will not; unrewarded genius is almost a proverb. Education will not; the world is full of educated derelicts. Persistence and determination alone are omnipotent. The slogan ‘press on’ has solved and always will solve the problems of the human race.” ~Calvin Coolidge

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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.

References:

Data Tables

http://www.bls.gov/bls/glossary.htm

http://stats.bls.gov/news.release/empsit.t02.htm

http://stats.bls.gov/webapps/legacy/cpsatab2.htm