Real Unemployment Is 23%

[Ronin Truth]

Real Unemployment Is 23%

John Williams (shadowstats.com) on the December Payroll Jobs Report and Unemployment Rate

By Paul Craig Roberts

PaulCraigRoberts.org

January 13, 2015

As increasingly has become the common circumstance, the upside revisions in headline monthly numbers simply are constructs of highly unstable, inconsistent and questionable seasonal adjustments being shifted between months. The unadjusted data do not revise, but the adjusted data pick up bogus growth from gimmicked reporting . . .

Counting All Discouraged Workers, December 2014 Unemployment Was 23.0%. . . . More than anything else, though, what removes headline-unemployment reporting from broad underlying economic reality and common experience simply is definitional. To be counted among the headline unemployed (U.3), an individual has to have looked for work actively within the four weeks prior to the unemployment survey. If the active search for work was in the last year, but not in the last four weeks, the individual is considered a “discouraged worker” by the BLS [and not counted in the U.3 measure]. ShadowStats defines that group as “short-term discouraged workers,” as opposed to those who become “long-term discouraged workers” after one year.

Moving on top of U.3, the broader U.6 unemployment measure includes only the short-term discouraged workers. The still-broader ShadowStats-Alternate Unemployment Measure includes an estimate of all discouraged workers, including those discouraged for one year or more, as the BLS used to measure the series pre-1994, and as Statistics Canada still does.

When the headline unemployed [U.3 measure] become “discouraged,” they are rolled over from U.3 to U.6. As the short-term discouraged workers roll over into long-term discouraged status, they move into the ShadowStats measure, where they remain. Aside from attrition, they are not defined out of existence for political convenience, hence the longer-term divergence between the various unemployment rates. Further detail is discussed in the Reporting Detail section. The resulting difference here is between a headline December 2014 unemployment rates of 5.6% (U.3) and 23.0% (ShadowStats). [The U.6 unemployment rate containing the short-term discouraged workers is 11.2%.]

[The 23% unemployment rate is consistent with the declining Civilian Employment-Population Ratio and the declining Labor Force Participation Rate. The rise in discouraged workers is reflected in the decline in these ratios.]
[Are you surprised that the government lies about the number of new jobs and the unemployment rate? Why are you surprised? The government lies about everything–”Iraqi weapons of mass destruction,” “Iranian nukes,” “Assad’s use of chemical weapons,” “Russia’s invasion of Ukraine,” etc.]

[John Williams also reports that the Birth/Death Model used by the Bureau of Labor Statistics assumes that more jobs are created each month by new startups than are lost by companies going out of business. The excess of new startups over closures currently adds an average of 61,000 jobs each month. In other words, these jobs are spun off of the assumptions of a model and are likely to be phantom jobs.]

[There is also the issue of data falsification by the Census Bureau reported in the New York Post by John Crudele and under congressional investigation. http://nypost.com/2015/01/06/call-congressman-for-some-good-common-census/ ]

Note: brackets indicate my comments.

The Best of Paul Craig Roberts


Paul Craig Roberts, a former Assistant Secretary of the US Treasury and former associate editor of the Wall Street Journal, has been reporting shocking cases of prosecutorial abuse for two decades. A new edition of his book, The Tyranny of Good Intentions, co-authored with Lawrence Stratton, a documented account of how americans lost the protection of law, has been released by Random House. Visit his website.

Copyright © 2015 Paul Craig Roberts

http://www.lewrockwell.com/2015/01/paul-craig-roberts/real-unemployment-is-23/

Copyright © 2015 by LewRockwell.com. Permission to reprint in whole or in part is gladly granted, provided full credit and a live link are provided.

 

[Zippyjuan]

If somebody isn't looking for work (the "discouraged workers")- which means they don't really want one- should they be counted as unemployed?

What has been happening with "discouraged workers"? In December 2013, there were 917,000 people classified as "discouraged workers". Out of 92 million "not in labor force". As of December 2014, that is down to 740,000 (19% lower). So they too are finding jobs. http://www.bls.gov/news.release/empsit.t16.htm

What is "U-6" unemployment?

U-6 -Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force

I am not sure what the article is adding to that to come up with more than twice even that (U-6) unemployment rate of 11.2% (and that is down 36% from its peak of 17.4%). Talk about cooking numbers. Are they including retired people? Note also that U-6 does include some people with part time jobs so they are not exactly unemployed either.

 

[Ronin Truth]

If you want a job and can't find one, I'd call that BOTH discouraged AND unemployed.

 

[acptulsa]

If somebody isn't looking for work (the "discouraged workers")- which means they don't really want one-

Does it?

The Broncos weren't looking for the Lombardi Trophy. Does that men they didn't want it? Voters aren't really looking for honest candidates. Does that mean they don't want any? Seniors aren't looking for money sound enough that it won't shrink in their mattresses. Does that mean they don't want any? Drivers aren't looking for new vehicles that ride, handle and stop as well as cars, but have as much room as only light trucks have had inside since the CAFE laws kicked in. Does that mean they don't want any? Citizens aren't looking for the level playing field they need to start a small business and take on the corporations with it. Does that mean they don't want it? People aren't looking for peace and prosperity. Does that mean they don't want either?

Once upon a time, adult males who were not employed were counted as unemployed. No one tried to second-guess whether they wanted to be employed or not. They simply said, we're going to report how many working-age men are not working, and did so. It was awfully provincial to exclude women. And even more provincial to feed people uncooked numbers like they were intelligent and free enough to make their own minds up about what it all means.

Note to the sane: Feel free to cut this and paste it wherever Z2.0 is avowing that people who aren't employed and haven't been employed and the government has assumed have given up on getting employed are employed--or that employed and unemployed are no longer antonyms--or whatever brand of tripe it is that he seems to be paid to peddle.

 

[Madison320]

There's nothing wrong with a large segment of the population that is not working as long as it's not costing the taxpayers any money. But since we're borrowing and printing trillions every year, that's not the case.

 

[Zippyjuan]

If you want a job and can't find one, I'd call that BOTH discouraged AND unemployed.

They measure "wanting a job" by determining if a person is actually looking for one. If you don't have a job and aren't looking for one, you aren't considered part of the workforce- whatever the reason: student, stay at home housewife, retired, a bum. Should unemployment figures care about people who don't want to be working? If you are looking and don't have one- then you are counted as unemployed.

 

[acptulsa]

They measure "wanting a job" by determining if a person is actually looking for one. If you don't have a job and aren't looking for one, you aren't considered part of the workforce- whatever the reason: student, stay at home housewife, retired, a bum. Should unemployment figures care about people who don't want to be working? If you are looking and don't have one- then you are counted as unemployed.

Firstly, if the government is saying that x number of people are not employed, it would be nice if they weren't lying.

Secondly, this is statistical analysis based on questionable parameters. If some homeless person is actively trying to get a job, but has no telephone, the government can not only not survey them, but the government is liable to decide they don't want a job if they don't maintain a phone because they know getting a job may involve getting a callback for an interview. And if said person has a friend with a phone taking callbacks for them, but if surveyed will report themselves employed, then that's too nonconformist for sanity and reason enough to ignore that person. So, they're not counted as unemployed because they simply don't count.

Thirdly, there is something to be said for consistency from government, because inconsistent government is liable to use their own inconsistencies as an excuse to waste our hard-earned tax money to hire millions of paid shills for the express purpose of fooling voters into thinking they're as competent to do their jobs as their counterparts of years gone by.

 

[Zippyjuan]

Can you provide any alternative figures which are more accurate? (I have asked you before but received none). I could go into the interview process if you like or you can search for yourself. They call some 60 thousand people over several months- rotating out about 10,000 a month to new people. (and yes, some homeless people DO have cell phones but how many of them are actively searching for a job?)

 

[acptulsa]

Can you provide any alternative figures which are more accurate? (I have asked you before but received none).

You don't like the figures in the OP. How am I supposed to help you?

Here in America, we're smart enough to know that reasonable doubt counts. We don't have to bring in the real murderer and absolute proof he did it to escape a charge of murder, at least outside of Texas. I know things don't work that way in Old Bailey, but if you're going to talk about the Broncos and Payton [sic] Manning and generally pretend to be a yank, you might consider making a concession or two to American standards and values...

 

[Zippyjuan]

I see. You don't have anything to offer. But thanks for trying.

As for the Broncos- I grew up in Colorado and was a fan even before some guy named John Elway became their quarterback. I did spend half a year working in London after graduating college.

 

[acptulsa]

I see. You don't have anything to offer. But thanks for trying.

I'm sure you say the same thing to the people who shovel the $#!+ out of the stalls on Derby Day. But the people who have no nose for the green apples you drop around here might just have a different opinion--and might just be entitled to it, too.

 

[TheCount]

It's hard to respond to numbers when the person making the numbers won't explain how they generated those numbers.

Firstly, if the government is saying that x number of people are not employed, it would be nice if they weren't lying.

What ShadowStats' numbers suggest is that the government did not lie about unemployment, they just used a different measure of unemployment... until 2009. Then, suddenly, things were different in a way that they no longer track along with official government figures whatsoever. I'm sure that this has nothing to do with the author's self-proclaimed conservative republican political affiliations.

I'll just leave this here while I'm at it:

 

[Zippyjuan]

He says he tries to figure out of the people no longer looking for work have not looked for a job in over a year and he adds that figure to the U-6 unemployment. And his figure for that is something like three times what BLS number show so nobody has been able to figure out what he is really doing.

From his website:

Alternate Unemployment Charts

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. That estimate is added to the BLS estimate of U-6 unemployment, which includes short-term discouraged workers.

The U-3 unemployment rate is the monthly headline number. The U-6 unemployment rate is the Bureau of Labor Statistics’ (BLS) broadest unemployment measure, including short-term discouraged and other marginally-attached workers as well as those forced to work part-time because they cannot find full-time employment.

Somebody tried to check his calculations:

http://www.rationalskepticism.org/general-debunking/debunking-shadowstats-t38187.html

(this is from May, 2013 so numbers are different today):

In other words he is stating there are 19,017,000 people who would like to have jobs, are available to work, and have not searched for work in the previous 12 months. We can call them the 'very'-marginally attached for the sake of this exercise. He even goes further though and says his figure represents only the discouraged subset of this 'very'-marginally attached group, not all of them, which must mean he somehow thinks there are millions more that are very-marginally attached and he is just not including them(which makes his analysis all the more ridiculous). So where on earth is he coming up with the 19,017,000 figure?

Table 38 shows there are 90,100,000 TOTAL not in the labor force. 83,528,000 of those explicitly state they do not want a job. 3,264,000 fall into the marginally attached category which means the total # of people who A) want a job and B) did not search for work in the previous year is 3,578,000 NOT 19,017,000.


***The numbers used in the figures above came from the BLS's report. These are preliminary #s subject to revision the next couple months so if 5 months from now you look on the BLS site and notice that the BLS February #s don't match up exactly with the ones I listed, its because of revisions.

To see his actual data you need to subscribe- at $89 for six months or $175 a year. (all his data comes from government statistics- what is different is how he calculates his final figures).

 

[DamianTV]

They measure "wanting a job" by determining if a person is actually looking for one. If you don't have a job and aren't looking for one, you aren't considered part of the workforce- whatever the reason: student, stay at home housewife, retired, a bum. Should unemployment figures care about people who don't want to be working? If you are looking and don't have one- then you are counted as unemployed.

So 23% Unemployment, as claimed by this stat, subtract 5.6% which is the Official Unemployment Rate, and we have a 17.4% BUM RATE? What the fuck is wrong with you?

 

[RJB]

They should add all the people who don't work due to "disability," due to PTSD, Overweight, connection to a good disability attorney, etc. I've seen plenty of people as healthy as me who get full disability.