The True Number Is 36%

The Truth? Okay here goes...

Understanding The Smoke And Mirrors Act

How one defines "unemployment" is the key to understanding what it really means. Merriam-Webster defines it in rather simple terms: "the state of being unemployed : involuntary idleness of workers; also : the rate of such unemployment." The way the Bureau of Labor Statistics (BLS) deals with the reality of people being out of work is often meant to bring warm fuzzies to the masses depending on if it is an election year or what particular political party the President at the time belongs to. The purpose of this Hub is to give it to you "straight up" without the smoke and mirrors we see coming out of the BLS.

So first let me clarify the definition. If an American worker, of age, is eligible to "participate" in the civilian work force and not currently working that is the participation rate. That rate is being manipulated by the BLS by dropping people from the roles of the unemployed versus them finding gainful employment..

BLS defines unemployment rather broadly and here's their definition: "people who want a job, but can't get one." So how do you measure "people who want a job?" You can cha-cha-cha around that all you want, and the BLS does exactly that. Take the current U-3 unemployment figure, which was reported as 8.3% last month, and understand what it really means. What happened was that the BLS cut 1.2 million people off the rolls who hadn't made any effort recently in finding a job. Where did they go? They are still unemployed. Ever heard of the concept of being discouraged? The latest figure was significantly distorted by the huge "seasonal adjustments" that occurred during the time of year the reporting was done. In other words, the numbers were cooked.

Think of it this way. When the American workforce contracts what happens to the BLS' "official unemployment rate?" It gets lower, not bigger. Is that contraction a bad thing? Of course it is, contrary to what all the nitwits on Capitol Hill say about unemployment compensation being a job creator. That's sheer stupidity in someone's thought process. The country is going to become more prosperous by having people ride the unemployment rolls for what literally amounts to years now who can't find work? What is even more mystical is that those people aren't counted in the BLS "official unemployment rate." Did you realize that?

Not Spam But Sham

Lets suppose that everyone under the age of 25 just up and quit looking for work. The result would be devastating to any economy but where would the "official unemployment rate" go - up or down? It would go down. Why? Because the pool of people actively seeking employment would be reduced significantly. See where the 1.2 million people went now. They are still there and still unemployed. Lets talk statistics for a minute. We know that the U-3 is being massaged. In the age group 16-19 the U-3 rate is 23.2% and between 20-24 years old it is pegged at 13.3%. The sex of the young workers play a roll since it is 2% higher even still for men than women. Smoke and mirrors? You bet you it is. Ask someone who is unemployed.

This is Obamanomics in action. The work force is in contraction, not expansion. So the BLS shaves the numbers by dropping people from the participation rate and you see figures like 8.3%. The average Joe on the street might eat that up but it isn't reality and the Main Stream Media again isn't reporting the truth. It's incredible hearing administration officials grinning and telling us all that their policies are working and we're supposedly on the right track when the opposite is true. The fact of the matter is that very rarely has job growth been much higher, if any, than population growth.

What the U-3 incorrectly measures, using BLS lingo, is the "total of workers unemployed, as a percentage of the civilian work force." That isn't even close to being reality after they jiggle the numbers by not counting everybody they should be counting. Rather than look at the labor force participation rate, the true indicator, we're given the smoke and mirrors routine on a monthly basis by the BLS. As previously stated, the percentage of work-age Americans eligible to participate in the work force who are not is 36.3%. How bad is that? The worst in the past 3 decades and of Great Depression proportions. But we're not in a recession anymore?

Then we keep hearing how Obama's stimulus bill is so successful. Here's a chart that Representative Jim Jordan (R-OH), chairman of the House Subcommittee on Regulatory Affairs, Stimulus Oversight and Government Spending presented to illustrate the effect of this pork ridden bill and the impact it had on workforce participation.

According to Jordan what we need is real reform rather than the smoke and mirrors routine we keep getting out of the BLS. There is a Jobs For Growth Act in the mill that actually addresses some of the problems that need to be fixed. It includes proposals for a flat tax with two rates, reduction of corporate taxes to encourage businesses to locate or relocate in this nation, much needed regulatory relief, and last but not least increased domestic energy production. Been to the gas pump lately? What happens when fuel prices go up? You really don't think everything else doesn't go up with them do you?

We don't need small reforms. We need a complete overhaul with fine tuning thereafter. They screwed this whole thing up and now we need to elect people who have the guts to take the bull by the horns and fix it rather than all the finger pointing we see going on. Who cares who did it? Put away the smoke and mirrors routine and get jiggy with fixing it.

As Always,

The Frog Prince

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Comments 19 comments

TheManWithNoPants profile image

TheManWithNoPants 4 years ago from Tucson, Az.

Good job, Jim. You know that I have to stay tuned into this pretty closely, but you just cleared something that I wasn't sure about, or I should say you confirmed what I suspected. Nice job on putting this together. Up awesome and useful.

Jim


Rickgyver 4 years ago

Jim, I can't thank you enough for exposing these phony political lies for what they are! I'm just glad you're on OUR side!


Ghost32 4 years ago

Awesome. Your writeup, not the BLS cookery.

Well...I guess shaving 36.3% clear down to 8.3% IS kind of awesome, but most certainly not in a good way.

Voted Up and More.


marywanders profile image

marywanders 4 years ago from minnesota

Thanks for putting this into black and white for us, you just clearly detailed something I suspected. Just another way the facts can be skewed according to who is paying for the information and how they want to present it.


breakfastpop profile image

breakfastpop 4 years ago

Awesome job of telling the truth, giving the facts and explaining the mumbo jumbo. Up and useful and awesome too,


tsadjatko profile image

tsadjatko 4 years ago from maybe (the guy or girl) next door

Gee, it really appears that our government's Bureau of Labor Statistics' unemployment figures are contrived in a way to purposely hide the truth from it's citizens - is it that they swap transparency for just plain deception? Although 36.3% is the worst labor participation rate in three decades, and it’s part of the worst employment picture we’ve seen since the Great Depression it seems reasonable to measure the overall health of the economy by the number of people who simply are not participating in the labor force. However this would always be a much higher number than the BLS unemployment statistic, even when the economy was humming along at maximum power. There are always going to be working-age people who drop out of the labor force, for reasons that have nothing to do with the nation’s overall economic health. The labor force participation rate hasn’t exceeded 67 percent in the past decade, so we would be looking at a true “unemployment” number that bounces between roughly thirty and forty percent. The difference between good and bad percentages is relatively small, which makes the true “unemployment” figure less sexy for news coverage, and therefore less useful to politicians… but it’s more logical to measure small changes in a large, accurate number than big changes in a small, largely fantastic number.


TheFewTheProud profile image

TheFewTheProud 4 years ago from Orlando, Florida

Obama is really concerned about jobs and unemployment alright ... HIS; and hopefully we will have something to do with it.

The amazing thing about these figures is that with 50% of Americans not paying taxes it won't be long before the real unemployment rate reaches the same figures. And we just sit back and take it and let it happen by electing the worse President of our time.

I wish he would stay out of Orlando; he keeps screwing the traffic up really bad. Productivity suffers when he is here.


drbj profile image

drbj 4 years ago from south Florida

A commenter wrote, Jim, that productivity suffers when Obama visits Orlando. The same thing has happened all across the U.S. since he has for 4 years 'visited' the White House. We need to elect a Pres and representatives that will take the bull by the horns (in this case, donkeys) and throw them out on their @$$.


poetvix profile image

poetvix 4 years ago from Gone from Texas but still in the south. Surrounded by God's country.

I think this is your best hub yet. There are so many unemployed that were never counted to be added to the ones kicked off the roles. We have literally millions in our country who are homeless that are never counted, an estimated 2 million street living minor teens that are not counted, not to mention the vast numbers of mentally disabled or challenged that typically never go into the figures.

When I stopped at the pump this week to get gas, it was 11 cents more than it was the week before and I thought that was high! The higher prices for everything this will translate to, in record time, will just escalate an already teetering economy in it's downward fall.

Thank you for a most interesting read that actually addresses the problem rather than trying to placate the public into not seeing reality as the mainstream seems to be set on. Yours is an important and needed voice.


teaches12345 profile image

teaches12345 4 years ago

I agree with your posting that the numbers are lower because people are dropped from unemployment. According to today's news, his "green" company investments have all failed (and yet other natural resources are not even given a vote). He says he has five more years. Seriously?


The Frog Prince profile image

The Frog Prince 4 years ago from Arlington, TX Author

poetvix and teaches - You both hit on today's Hub. Take a peek.

http://hubpages.com/politics/High-Fuel-Prices-And-...

The Frog


Caleb DRC profile image

Caleb DRC 4 years ago

Good job Frog; This is one example of many on how definitions and statistics can me changed and manipulated to make liberal and socialistic policies appear favorable when in fact they are, and will be, pernicious to our economy.


The Frog Prince profile image

The Frog Prince 4 years ago from Arlington, TX Author

Caleb - I took two courses in college my senior year that taught me how stats can be manipulated and how polls can be worded to give you the desired results.

TFP


Stu 4 years ago

Great post as usual Frog. The true unemployment rate is much higher than 8%. To get a true rate, the numerator is everyone who wants a job but doesn't have one, regardless of whether they have given up looking or not, plus those who are underemployed. The denominator is the numerator plus those who have skill appropriate jobs. This true rate of unemployment is close to 20%. The government figures ignore, both in the numerator and the denominator, everyone who has given up looking, plus the underemployed. The official rate is falling simply because more and more people have given up hope and stopped looking. The situation is truly dire. It takes college graduates about six months to find new jobs, often at lower pay. Those without college degrees can look for more than a year before finding anything. One of the biggest problems is regulation. Depending on business sector and company size, federal compliance expense can be as much as $10,000 per worker, and this is in addition to corporate income tax (in some industries, the highest in the industrialized world). The natural inclination is to invest and create jobs offshore. This is why American corporate profits are strong, even though US employment is weak. All of this is leading to a very precarious tipping point. About half of American adults pay no tax, and the federal government does not want to cut spending. Ultimately, a combination of tax increases and inflationary monetization will further depress business domestic investment. At some point the tax base itself will be in great jeopardy, unemployment compensation will rise significantly, and the federal debt will skyrocket. The entire economy could implode.

The root of the issue is that the Democratically controlled Administration and Congress foster dependency rather than job creating free markets; this strategy gets them votes. Most GOP's really do the same; they first "talk" about spending cuts, but then "compromise" with the Democrats, agreeing to little more than decreasing the planned level of spending increases, and calling them "spending cuts." At the rate we're going, in 10-20 years, just interest on the official debt will consume the entire federal tax intake. While the debt load itself won't directly cause this to happen, the issue is that there is only so much "world money" to borrow. Adding another $10-$15 trillion of debt would result in far higher interest rates, because we would be competing with everyone else for a fixed supply of loanable funds.


UnnamedHarald profile image

UnnamedHarald 4 years ago from Cedar Rapids, Iowa

Very well-written and interesting. On a similar subject is the manipulations behind the Consumer Price Index (CPI). Food prices rising, healthcare premiums soaring, fuel prices increasing-- and they tell us inflation is not a problem? They just want to keep CPI-triggered programs from increasing. This is not a Democrat vs Republican thing-- they're both to blame. Voted up and interesting.


The Frog Prince profile image

The Frog Prince 4 years ago from Arlington, TX Author

UnnamedHarald - They removed most of what we use on a continual basis from the CPI to afford them more opportunities at the smoke and mirrors game. Those of us with any intelligence know what that was all about.

TFP


Caleb DRC profile image

Caleb DRC 4 years ago

Hi Frog, I must have been half a sleep when I wrote my comment above. Me is supposed to be be, and,"when in fact they are" is supposed to be, when in fact they are NOT." If you can delete that comment then please do so. The last thing I want to do is give the impression that I support a political philosophy that I consider to be satanic.


The Frog Prince profile image

The Frog Prince 4 years ago from Arlington, TX Author

Caleb - It'a all good. I understood. Read this please. I wrote it in a funny manner but someone has lost their friggin' mind.

http://hubpages.com/politics/Pond-Scum-AKA-Algae-I...

The Frog


Hated By Liberals profile image

Hated By Liberals 4 years ago from Eastern U.S.

Hey Frog - Right on, Brother. They will lie when the truth would be just as easy to tell. I have followed John Williams, and Shadow Government Statistics for several years now, and he also nails their lies to the wall for all to see. Alinsky-like, they do not have integrity so they say we have no way to disprove their lies - so we should shut up. I think deep division cannot be reconciled by common ground (because there is none) so the battle will be required to coerce or silence the weaker party.

I hope that soon it will be ON - LIKE DONKEY KONG. (Cocked, Locked, and ready to Rock, Doc)

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