The Truth of Unemployment: Look at the EMPLOYMENT - POPULATION RATIO

[berni_mccoy]

In Jan 2000, 64.6% of the civilian labor force was employed (seasonally adjusted numbers). The labor force was a 142 million strong in Jan 2000. That's about 92 million people employed.

The percent of the labor force since then has steadily (and I mean steadily) declined.

By Dec 2005, the labor force has increased to 150 million, but only 62.8% of the civilian labor force is employed. That's 94 million people employed. So the labor force increased by 5.6% (8 million people) but the number of people employed only increased by 2.2%. To put it another way, for every 2 jobs created since Jan 2000, there are 5 people wanting them.

That means of the 8 million new people in the labor force since 2000, 6 million do not have jobs. For that group, that's a 75% unemployment rate. Let's keep those 6 million people in the back of our mind for a minute.

In Jan 2000, the unemployment rate was 4.0% or about 5.7 million people. We can reasonably assume that most of those people still would like to be employed. But wait, there are those 6 million NEW people who also want to be employed. That's 11.7 million people who want to be employed who are not or about 7.8% of the workforce unemployed. But the government is telling us that it's 4.9%. Where do they get 4.9%? Well, that's 7.3 million people today. In Jan of 2000, there were 5.7 million people looking so the government is saying that 1.6 million new people (since Jan 2000) want jobs but can't get them. But we know that's not true.

The only conclusion is that the government is removing the people from the unemployed group too soon (i.e. fudging the numbers). Where did about 4.3 million people go? The answer is in the government's own numbers of the population that is considered "not in the labor force". In Jan 2000, there were 69 million people age 16 and older NOT in the labor force. In Dec 2005, there are 77 million or an increase of 11.6% which is increasing exactly twice as fast as the increase in the civilian labor force. It's not just a coincidence that the unemployment rate should be roughly twice as high as it is today. If you look at the raw numbers of new people in the labor force and people moved to the "not in labor force" there is a 1-to-1 accounting: 8 million new job seekers, 8 million people moved to the Not-In-Labor category.

So in summary:
Civilian labor force increased by 8 million since Jan 2000
Only 2 million new jobs created since Jan 2000
Employment-to-population ratio decreased 3% since Jan 2000
The Not-In-Labor Force population grew TWICE AS FAST as the Labor-Force category
Even though 8 million new people in labor force want 2 million jobs, we've only increased the unemployed by 1.6 million
For each new person in the labor force, the government is moving a person to the not-in-labor-force category
Unemployment should be an estimated 11.7 million people or 7.8%

Source of data: U.S. Department of Labor - Bureau of Labor Statistics http://www.bls.gov/home.htm

[Erika]

1. Those stats are correct and being shown everywhere

except for the WH. Our people know they are hurting. W and his minions can say what they want. Most of the new jobs are at a lesser wage with fewer benefits. Believe me, the hires know that.

Bush's "great economy" is a hurtful myth and nothing else.

[Mr_Spock]

46. That's pretty good logic there

I've been hearing about this "manipulation" for a while now, but you made it almost clear to me what's going on :D

Um, meant for OP - ooops! :D

[EST]

2. Thanks.

We knew they were lieing but rooting out the details called for your talents and patience.
Again, thanks.

[Richard Steele]

3. Thanks, Mr. McCoy!

You have a real talent for explaining statistics
to 'number-impaired' folks like me.
Recommended.

[JohnnyRingo]

4. Very revealing study....I always suspected as much

The more the White House pointed at the unemployment figure (household survey) the more I assumed those numbers to be misleading.

This failed economy can't be adding jobs, nor would they want it to.
It's every Republican businessman's dream to be able to tell an employee: "You're lucky to have this job!" "And there's fifteen people waiting right outside that door to take you're place."

[mikelewis]

5. Arther Anderson would be proud...

K & N

[Neil Lisst]

6. berni_mccoy, you're absolutely right.

I've been wailing about this for the past two years every time the topic of unemployment arises. The Bush administration has been spinning their lies for several years by cooking the books.

As you point out with numbers to support, we have added several million net job seekers while gaining only about 25% of that number. It is a mathematic impossibility to reduce unemployment while creating only a percentage of the new jobs needed. We needed to add at least 150,000 jobs a month for the past 60 months to stay up with new employment seekers. That's 9 million new jobs needed. We've had about a third that, with the net shortfall at least 6 million. In reality, we're underwater about 8 jobs under Bush.

How do they do it? Easy. They stop counting people when they stop getting unemployment benefits. Isn't that easy?

If they could get away with it for Iraq, not only would we have not lost over 2000 soldiers, we would have gained several thousand!

I can't believe mainstream media has almost no one who calls BULLSHIT on this whole fraud by Bushco.

[newswolf56]

7. Good work, berni_mccoy, and thanks.

Your statistical analysis seems to prove what I have long sensed but did not have time to track down.

Here are a couple of worthwhile rules of thumb from my years as a social-issues reporter:

The "unemployment rate" -- like the "poverty level" -- have always been propagandistic con jobs.

Among sociologists the rule of thumb is that to estimate real U.S. unemployment, double the official rate -- a method that essentially supports your approach and gives your numbers the added authority of methodological precision.

To get the real poverty line, use the figure beneath which families and individuals can no longer afford the necessities of living including health insurance: by this standard about 40 percent of the U.S. population now lives in genuine poverty -- the highest such percentage in the nation's history.

[raccoon]

34. Thank you, newswolf56, for your post.

I believe the official unemployment rate, the official poverty figures, and the official inflation rate are all WAY understated--and have been for years and years.

Who benefits from understating them?

[kineneb]

45. As a member of the poor...my comments

(poor, not in education, but in pocketbook)

I have always figured the stats were cooked, especially after Raygun's changes. I guessed that unemployment was about double the offical rate. And I personally know that the amounts given for the "offical" poverty rate were bogus. It takes at least double the rate to even consider being moderately comfortable and not worried if there will be money enough to buy food. The numbers do not take into consideration the huge increases in housing and energy costs.

As to health insurance, Hubby qualifies for Medicare/Medicaid (for dialysis) and my Mom pays for my insurance. Otherwise we would be up s*** creek. We survive on $13k/yr because we were able to pay most of our house off, and our house payment is quite low (long story, starting with Hubby being laid off from WorldCom). But I still go to the commodities give-away; and last year I had to get help from the local food pantry. I just hope nothing breaks, because there is no money to pay for repairs.

[newswolf56]

48. I understand perfectly. I live on a too-small Social Security pension...

supplemented by the little I can make freelancing -- my journalism career was irreparably wounded by my involvement in the Civil Rights Movement c. 1963 (the unspoken racism of corporate America is truly savage) -- but I nevertheless kept at it, and eventually came to believe that even with my minuscule retirement stipend I would be able to live out my last years on friends' property in rural Washington, growing my own organic vegetables, enjoying the company of my beloved dogs and otherwise living in pleasant solitude within the limits of my income. But the collapse of their own pension forced my friends to sell their land, a member of my alleged "family" who had long secretly despised me bought it, and then in a terminally ruinous act of calculated treachery late in 2004 ousted me without warning and in the most deliberately damaging way possible. This forced me back into the infinite wretchedness of urban poverty, not only denying me the ability to grow my own food (Tacoma is so poisoned by ASARCO that urban vegetable gardening is unsafe) but also condemning me to the prison-like restrictions of "senior citizen" housing -- no dogs, no visitors after 9 p.m., inspections that amount to warrantless searches every three months -- an infuriating cage of oppression from which it is ever more obvious I will never escape save by death. Human interaction can go a long way toward making urban living bearable, but the only city I've ever been socially comfortable in was New York; here in Tacoma I am hopelessly isolated not only by my poverty but by my education, intellect and talent, and my loneliness is intensified a thousandfold by the fact I live in constant nagging terror of the time I will not be able to pay my bills. Yet because my income is a few dollars above the so-called "poverty line," the government officially denies that I am poor. Thus my lot is ever more like the displaced persons of New Orleans -- a condition that will increasingly afflict every American who is not part of the corporate ruling class. Having lost all illusions about America and finally recognizing capitalism for the legalized murder it is, I post on DU in the hope of contributing to the resurrection of American socialism: the New Deal if the ruling class allows it, something rather more sternly Marxist if they do not.


Edit: for clarity.

[kineneb]

49. hang in there, we care, DU cares

Keep posting here, it will save your sanity, if not your budget.

We live in rural California, and hope to be able to stay here. When Hubby was laid off from WorldCom (2002, though it seems like much longer), we could see the writing on the wall. He was too "old" to be rehired in the tech sector, and unwell enough that any kind of physical labor was out. I have a BA in Music (may as well be underwater basket-weaving) and need to write my thesis for my MA. There was no way I could support us in the SF Bay area, so we sold the house, and moved to Lake Co. to be out of the rat race. At least here we have a 1/4 acre, modest new mfg. house, and the pet chicken.

Because this is also an area where people from the Bay Area retire, there is not a complete intellectual vacuum such as you have in Tacoma. There are local music and arts events, and organizations such as the Grange in which to be involved. Granted, we have the requisite old fart Repukes, and a quantity of young knuckle draggers, but not too many. In general, Lake Co. is pretty "blue."

My economic planning has not always been the best, but we have done what we could. The next "adventure" is to declare bankruptcy, and get rid of the credit card debts we will never be able to pay. I quit my job so I could take care of Hubby and drive him the 25 miles (one way) to dialysis three times each week. That also means that our income is low enough to qualify for other kinds of assistance. I teach piano lessons on the side (cash only) and plan on producing craft items for cash sale as well.

My own retirement plan depends on what happens to the economy in the future. If it is totally trashed and I will get no social security, I have always considered entering the Zen monestary at Mt. Shasta as a possiblity.

[newswolf56]

50. A haiku I try to live by:

The thief
Left it behind --
The moon at the window.

(Ryokan, 1758-1831)

I'm not really Zen -- more nearly pagan, albeit with strong Taoist/American Aboriginal influences -- though I don't participate in any sort of group practice. Not that it matters: my imprisonment in the spiritual dead zone of a city is truly the worst of the many blows dealt me by my treacherous relative; it has already destroyed my spirituality -- shrinking it from 24/7 reality to ever-more-distant memory and thus ultimately to nothing more than theory: the intellectual equivalent of cinders that may (or may not) ever be coaxed back into flame.

Besides which, the skies over Tacoma are so darkened by the malicious glare of sodium-vapor lights, you cannot see the stars at all, and the moon only dimly.

Nevertheless, thank you for your good wishes -- and my best wishes back to you and yours.

[sofa king]

8. A question about retiring people.

This is a genuine question. I don't understand economics very well (I can't even balance my checkbook). I know that a growing number of people are reaching retirement age, and I know from the hard experience of friends and relatives that the retirement age these days is more like 62 instead of 65 (so that employers can shaft career employees one last time).

How does the federal government account for the people who are being forced into early retirement and are unlikely to find jobs equal to their value and experience?

[berni_mccoy]

10. I'm not sure that the gov tracks that, the BLS does not

They do track the reasons the person is considered Not In Workforce. Here is one breakdown of that data here: ftp://ftp.bls.gov/pub/special.requests/lf/aat35.txt

Notice the age category of 55 and older. They don't have a category for "early retirement". You'd probably have to go to the SSA or to the Federal Inter-Agency Forum of Aging Statistics (http://www.agingstats.gov/). In 2003, about 36 million people were age 65 and over, about 12% of the population. Between 20%-25% of that population participates in the labor force (about 2%-3% of the population or roughly 6 - 7 million people).

As far as your last question, it would require more research/digging to get the data. Certainly there is a movement of higher-paying, skilled jobs to lesser-paying, unskilled jobs. That sounds like another article altogether.

[sofa king]

11. Thanks, berni!

Those are interesting links which I can actually understand. I myself fall into those numbers somewhere. Gotta get my ass offa that chart, man.

[lectrobyte]

14. Got laid off from your well paying job at Yoyodyne, but have a

part time job at Wallyworld stocking shelves and are also the night shift cashier at the Magic Mart? Congratulations, you are employed and are part of the Bush economic miracle! Seriously, I think if you are "employed" to the point of not being able to apply for unemployment insurance, you are a happy statistic in the eyes of the govt.

[nicknameless]

9. Thank you for doing this. Since Reagan, the "unemployed" figures only

reflect those who are receiving unemployment benefits -- a figure that excludes MANY additional jobless people.

[BleedingHeartPatriot]

12. Reagan also began including military personnel in the employment

numbers for the first time. MKJ

[nicknameless]

43. He also took the cost of "housing" out of the Consumer Price Index

to conceal the true rate of inflation.

[Roland99]

19. I believe the unemployment % is based upon a survey now...

not those receiving benefits.

[EuroObserver]

26. Thatcher did the same thing at the same time

for UK numbers. BLiar, of course, continues the same.

[ProfessorGAC]

13. Nice Catch, berni

This is what statisticians or analysts refer to as turning a statistic into a parameter. The parameter now has broader meaning and can be used to draw conclusions, such as the one you drew here. It's why serious econometric analysts, do not use the standard reported figures without indexing.

And, you are 100% correct.
The Professor

[berni_mccoy]

15. Thanks, I'm working on a similar report for the GDP

I'm tired of hearing how great the economy is doing. I'm a mathematician and one of the first things I learned was to apply common sense to the numbers. If the numbers surprise you, then you need to look very carefully, step-by-step, how those numbers were generated. Well this last QTR, the alarm bells went off when the gov and pundits started saying how great the economy was when everyone is paying 50-60% more for utilities, interest rates are rising and the market isn't really any better than when Bush came into office. Meanwhile the dollar is extremely fragile and Gold is at an all-time high and the nation has record debt and trade deficits. I'm going to go over ALL the numbers with a fine-tooth come, and I promise you, there is some very surprising data about the GDP that I find very scary.

[Roland99]

18. Oh, do let us know when that's ready!!

I've also long thought this admin was somehow fluffing the GDP numbers (and I'm still not 100% sure they're not also helping prop up the stock markets somehow...infusing investments thru deficit spending somehow)

[ProfessorGAC]

20. You're Not Going To Surprise Me

I've been doing exactly what you describe for the last 20+ years. I've built massive non-linear models to detect causation and criticality of parameters within the macroeconomy, and have had several models and papers using those models published.

So, you and i are kindred spirits. Good luck!
The Professor

[berni_mccoy]

22. Cool... I'd be very interested in seeing your research!

I've only been looking at economic data in detail for the last year and a half and I really don't like I see on so many fronts... and if only there was someone who would listen to the information or be halfway interested... the future of all America is at stake and the numbers are grim. Americans have a tradition of revolting when their wallets are involved.

I remember when Bush/Cheney were spreading words of doom when they first came into office... and now it's easy to see how they fulfilled thier own prophecy by looking at the numbers.

[ProfessorGAC]

23. I'll PM You

The Professor

[newportdadde]

30. Would love to see that.

I believe quite a bit of that is via deficit spending.

[Roland99]

16. I've been harping on the LFPR for a LONG time. Unemployment % is USELESS

LFPR is a much better indicator of our economic well-being.

Profits are up at something like 3/4 of all companies in the US but the average worker's wages are falling against the rate of inflation.

Tell me that's not a recipe for an oncoming depression.


Trickle down?


More like Fuck You!


BTW, here's an EXCELLENT SUMMARY from the Economic Policy Institute that mirrors everything I've been saying for almost 2 years:

http://www.epi.org/content.cfm/pm110

1. Profits are up, but the wages and the incomes of average Americans are down.

* Inflation-adjusted hourly and weekly wages are still below where they were at the start of the recovery in November 2001. Yet, productivity—the growth of the economic pie—is up by 13.5%.

* Wage growth has been shortchanged because 35% of the growth of total income in the corporate sector has been distributed as corporate profits, far more than the 22% in previous periods.

* Consequently, median household income (inflation-adjusted) has fallen five years in a row and was 4% lower in 2004 than in 1999, falling from $46,129 to $44,389.

2. More and more people are deeper and deeper in debt.

* The indebtedness of U.S. households, after adjusting for inflation, has risen 35.7% over the last four years.

* The level of debt as a percent of after-tax income is the highest ever measured in our history. Mortgage and consumer debt is now 115% of after-tax income, twice the level of 30 years ago.

* The debt-service ratio (the percent of after-tax income that goes to pay off debts) is at an all-time high of 13.6%.

* The personal savings rate is negative for the first time since WWII.

3. Job creation has not kept up with population growth, and the employment rate has fallen sharply.

* The United States has only 1.3% more jobs today (excluding the effects of Hurricane Katrina) than in March 2001 (the start of the recession). Private sector jobs are up only 0.8%. At this stage of previous business cycles, jobs had grown by an average of 8.8% and never less than 6.0%.

* The unemployment rate is relatively low at 5%, but still higher than the 4% in 2000. Plus, the percent of the population that has a job has never recovered since the recession and is still 1.3% lower than in March 2001. If the employment rate had returned to pre-recession levels, 3 million more people would be employed.

* More than 3 million manufacturing jobs have been lost since January 2000.

4. Poverty is on the rise.

* The poverty rate rose from 11.3% in 2000 to 12.7% in 2004.

* The number of people living in poverty has increased by 5.4 million since 2000.

* More children are living in poverty: the child poverty rate increased from 16.2% in 2000 to 17.8% in 2004.

5. Rising health care costs are eroding families' already declining income.

* Households are spending more on health care. Family health costs rose 43-45% for married couples with children, single mothers, and young singles from 2000 to 2003.

* Employers are cutting back on health insurance. Last year, the percent of people with employer-provided health insurance fell for the fourth year in a row. Nearly 3.7 million fewer people had employer-provided insurance in 2004 than in 2000. Taking population growth into account, 11 million more people would have had employer-provided health insurance in 2004 if the coverage rate had remained at the 2000 level.

[AnneD]

24. Hey Roland...

glad to see you spreading the word outside of SWT. :hi: Need to get the truth out every way we can.

[Roland99]

29. Took me a minute to realize what SWT was.

;)





:hi:

[inchhigh]

17. Thanks

I've tried to make this argument for years but never had it laid out this well.

[MadHound]

21. Yep, the "official unemployment figures" have been so much shit

Ever since Reagan took office. One of his first moves was to start including the military in those figures, to bolster the official facade that unemployment was going away. Trouble is that in the real world it didn't, and politicians on both sides of the aisle have been playing fast and loose with those numbers ever since.

[EuroObserver]

25. Plus, black market must be going through the roof n/t

[newportdadde]

27. Great Post, need more of this in GD. As an aside...

If you factor in the decline of real wages coupled with rising costs it gets uglier and uglier.

Yeah yeah.. if you follow the CPI which doesn't take into account food, gas and housing('rents'..:freak:) inflation isn't horrible. Yes you can get a computer for the same price that is more powerful and thats great, but it doesn't mean shit if all of your disposable income to buy the PC goes into filling up your gas tank and heating your house.

Our standard of living is declining, we have only put it off by idiot consumers out there pawning their houses into debt to continue to buy buy buy.

Energy, declining wages, rising healthcare, rising energy costs and an expensive war with no forseeable end. Our country has deep pockets but at the rate we are going we are going to find handfulls of lint. presses run out of ink.

[Roland99]

33. More great articles/charts from the EPI (I should apply to work there)

;)


Indexing the minimum wage for inflation
http://www.epi.org/content.cfm/webfeatures_snapshots_20051221


The boom that wasn't
The economy has little to show for $860 billion in tax cuts
http://www.epi.org/content.cfm/bp168


Economy up, people down
Declining earnings undercut income growth
http://www.epi.org/content.cfm/webfeatures_econindicators_income20050831



My favorite ( :scared: )

Decline in CPI leads real wages up in November, but at year 4, no gains over recovery
http://www.epi.org/content.cfm/webfeat_econindicators_wages_20051215

[Roland99]

51. More evidence this economy is killing the average American >>>>

http://money.cnn.com/2006/01/13/news/economy/ppi.reut/index.htm

For the year as a whole, the producer price index jumped 5.4 percent on the back of a 23.9 percent increase in energy costs. It was the biggest calendar year gain since 1990 although the 12-month gain was higher in October last year.

PPI rising quickly. Largest increase in 15 years!

[BlueEyedSon]

28. Everyone knows the published "unemployment rate" is BS.

[ozymandius]

31. These stats are dizzying for their basic truths.

Anyone who has critical thinking skills and basic senses should have at least a viceral sense of what you have articulated. Thank you for your hard work.

recommended, by the way

[Roland99]

32. Doesn't even take critical thinking. Simple reading comprehension should

suffice.


Alas, we're saddled with a populace where a too-large % still believes Saddam had a hand in the 9/11 attacks.

[AnneD]

38. Hi Ozy

:hi:, loved and respected by Stock Watch thread regulars and lurkers :bowing icon:

[Virginian]

35. How many H-1B workers have been imported to take the high paying jobs?

You would need to determine how many visas were issued and subtract that number of jobs from from the total number of jobs.

I don't think visa holders are counted as US population since they are only here to take the high paying, skilled jobs that no one else wants. :sarcasm:

IMHO Outsourcing and H-1B visas are responsible for the decline in wages.

[AnneD]

37. They have been trying to do that in Nursing for some time now...

According to a GOA report a few years back, we numerically had enough Nurses. Well then why the shortage. Two reasons...Nurses did not want to work in crap environments where their license (and patients lives) were at risk. Pay scale flattens after 10 years (and those dinky 2% raises you got did not keep up with inflation and a brand new inexperienced Nurse gets more than you). They advertise but they don't hire. Then the Health Care Industry goes to Congress (since they can't off shore our services yet) and gets them to expand the HB1 visa so they can out source our job ON OUR SOIL!. It drops our wages and does not improve health care.

[Virginian]

39. Some day they will wonder why they ever did the H-1B.

Americans out of work, national economy sagging, India passing us in quality of life. Foreign nationals living a much higher standard of living than US citizens in this country. Average American can't afford health care or to send a child to college. Some day. Some day, someone will wake up and say, "we killed the American dream by outsourcing and by bringing in cheaper foreign labor." Some day.

Elect Dems so we can recover the American way of life before it is too late.

[texpatriot2004]

36. Gee Berni, it looks like they are doing that fuzzy math again nm

[butterfly77]

40. bush is a liar

[YOY]

41. Yeah tell me something I do not know

I've been underemployed for 2 years now. Next freeptards I meet who claims that everything is hunkydory is risking my fist...then again landing in jail will only make things worse...except the health care...and free room and board...

[Roland99]

42. Kick

[Clara T]

44. kick for info

rec'd

[Luminous Animal]

47. Is it true that they don't count those in prison or jail?

That would surely raise the real rate even more.