Friday, February 6, 2015

The Big Lie


Or as Mark Twain said "There are lies, damn lies, and statistics".

Jim Clifton, President and CEO of Gallup recently posted an article on how the Department of Labor is misleading the American people and the media is cheering them on.

The unemployment rate is not really 5.6%.

If you, a family member or anyone is unemployed and has subsequently given up on finding a job -- if you are so hopelessly out of work that you've stopped looking over the past four weeks -- the Department of Labor doesn't count you as unemployed. That's right. While you are as unemployed as one can possibly be, and tragically may never find work again, you are not counted in the figure we see relentlessly in the news -- currently 5.6%
Say you're an out-of-work engineer or healthcare worker or construction worker or retail manager: If you perform a minimum of one hour of work in a week and are paid at least $20 -- maybe someone pays you to mow their lawn -- you're not officially counted as unemployed in the much-reported 5.6%.

What the government likes to trumpet from the rooftops is the U-3 rate or "Total unemployed, as a percent of the civilian labor force".  Please take note however that they get to define what the civilian labor force is and they exclude the long term unemployed who have just given up or those who are marginally employed or underemployed.  The U-3 rate  for Dec 2014 trumpeted above is 5.6%, the U-6 rate or "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" was 11.2% for the same period.  

It's also very important to always read the fine print:

NOTE: Persons marginally attached to the labor force are those who currently are neither working nor looking for work but indicate that they want and are available for a job and have looked for work sometime in the past 12 months. Discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work. Persons employed part time for economic reasons are those who want and are available for full-time work but have had to settle for a part-time schedule.

Wait... it gets better:

Fewer Americans born in the U.S. have jobs now than were employed to November 2007, despite a working-age population growth of 11 million.  Almost one in every two jobs added since 2009 have gone to foreign-born workers. In November 2014, one in every five U.S. jobs was held by a foreign-born worker, up from one-in-six jobs in January 2010.  Since November 2007, the number of working legal and illegal migrants has risen by two million, from 23.1 million in November 2007 to 25.1 million in November 2014.  But the number of Americans with jobs has fallen by 1.5 million, from 124 million in November 2007 to 122.6 million November 2014. The DC

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