MUST READ!!!!! UI Methodology Still The Same As When Calculated During New Deal-----
with one exception. REAGAN AND THE GOP INCLUDED THE US MILITARY AS EMPLOYED IN THE NUMBERS. I worked at DOL and am very familiar with how unemployment works. The UI numbers are calculated the same way as they were when the formula was set up during the New Deal. It is still based on the household survey and the formulation is that same when determining the rate.
The claim that Obama manipulated the numbers is just plain false. Remember the GOP freaked when the rate went under 8% and they could not use the rate to attack Obama.
The number of people leaving the work force, people no longer claiming, people exhausting benefits, and people finding jobs all effect the rate. And there is one factor not openly discussed. NOW HEAR THIS!!!!! In the survey if a person admits that they or someone in the household works ''1 HOUR" in the survey period they are counted as EMPLOYED.
The raw unemployment number of 8% or whatever it comes out to be. It does not count temporary jobs, part time jobs, and seasonal jobs are adjusted. Thanks to Reagan, THE MILITARY is counted in the employed category and added to the civilian employed part of the equation. Because the military is counted in the EMPLOYED category that knocks the UI rate down probably 2% and perhaps even 4%. Ronald Reagan and the GOP voted for inclusion in the military so the rate would be lower. Had that not been done THE UI RATE DURING THE ELECTION WOULD NOT HAVE GONE BELOW 10%..
Europe uses a different formula to determine their UI rate. If the US used the "European method". The UI rate in the US would be 12% to 15%. So in that sense our rate is kind of skewered. Bush used the same UI rate as Obama does.
Stay tuned for another post about job creation and job value. That topic explains why the labor market is so goofy.
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