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U.S. Government Data Shows True Unemployment Rate is 15%

September 6th, 2012

09.06.2012

Real Unemployment Rate USA (2012-08-03) BLS.gov

Table A-15. U.S. Bureau of Labor Statistics August 3, 2012 Employment Situation (Jobs / Unemployment Report). There are six (6) different methods to calculate unemployment in the USA. “U3” is the U.S. government’s “official” unemployment rate calculation. However, counting excluded persons from U3 are factored in U4, U5 and U6. The later, U6 counts ALL person and ALL unemployed situations toward the total unemployment rate. As of July 2012, the “U6” Unemployment Rate calculation in the USA is 15%. Click image to enlarge. (Data Source: BLS.gov, 08-03-2012.)

U.S. Government Data Shows True Unemployment Rate is 15%

original article written by Net Advisor

Charlotte, North Carolina. This week many of the speakers at the Democrat Convention touted how the Obama Administration has “created” over 4 million jobs. First of all most jobs in the USA are created in the private sector, and not by government. The Small Business Administration’s (SBA.gov) data shows that small business “represent 99.7 percent of all employer firms.”

Debunking the “Jobs Created” Argument Using a Simple Football Analogy
Since football season has begun, we will use a simple sports analogy to explain the Obama jobs record.

  • ‘Our team has consistently scored 35 points in every game for the last 3 years’ (i.e.: The we created 4 million+ jobs argument).
  • What is left out of this equation would be this: ‘Every team we have played over the last 3 years has scored 42 points per game AGAINST us’ (i.e.: Despite scoring points, we still lost every game. In other words, there are more job losses than job gains. It’s kind of hard to make the argument that one has created all these jobs when they leave out the fact that the net result is more people lost jobs.

FACT: The unemployment rate has gone UP not down since Obama took office. When Obama took office unemployment rate stood at 7.3%. Even if you accept government’s manipulation of the unemployment numbers, unemployment is still at 8.3%

HOWEVER, if you use a more complete count of the unemployed, including “marginally attached workers,” and “underemployed” calculated by the governments “U6” standard, the unemployment rate would be 15% as of July 2012 (Source: BLS.gov, PDF, 08-03-2012) (Chart above).

In some states, the Unemployment Rate is Far Worse When Counting Everyone Using Bureau of Labor Statistics (BLS.gov) U-6 Unemployment Calculation.

Example states:

  • Nevada‘s U-6 rate is 22.1%
  • California‘s U-6 rate is 20.3%
  • Rhode Island‘s U-6 rate is 18.3%
  • Florida‘s U-6 rate is 17%
  • Pennsylvania and Ohio‘s U-6 rate (below national average) at 14% respectively.

— Source: CNBC (PDF), 08-02-2012

Why Doesn’t True Unemployment Numbers Get Reported?
There are some in government who apparently feel that as Americans we just can’t handle reality. So government comes up with six different calculations for the unemployment numbers to make us feel more comfortable.

The Obama Administration believes they created “4.4 million new jobs over the past 28 months, including 500,000 new manufacturing jobs.”

Well if you factor out all the people who lost a job since Obama took office and only count the last 28 months, then the argument might be true. Using a housing analogy, it might go something like this:

Someone has not been paying their mortgage for the last 12 months then makes three payments in a row. The bank notifies them that they are subject to foreclosure. The homeowner says, ‘What do you mean foreclosure, we have been paying our mortgage on time for the last three months!’

So the only thing the Obama Administration has to boast about that is good, is to leave out all the data that is bad. Unfortunately, leaving out jobs data or skewing other economic reports does not make the argument true. It is a misleading argument. It’s amazing how many millions of people fall for a sound bite that leaves out the facts. This manta is almost like a cult-religion. They need no evidence to support their beliefs (“group think“). If a leader says it’s true, then it must always be true.

So what kind of jobs are being created in the private sector?
We did a spot check based on the April 2012 BLS.gov Employment Situation (PDF- highlight added) and analyzed the data here. Roughly 79% of jobs created in April 2012 were low paying jobs. These jobs came from the hospitality sector – food and alcohol related. So it appears that people are eating more and drinking more.

“Obama Beer.” photo by White House photographer Pete Souza

It appears that the White House is helping Americans focus less on the economy and more on drinking. The President announced (PDF) in 2011 that Obama was brewing his own beer in the White House. We are not sure if you need a permit for that. Surely, one would think that the Department of Health and Human Services would be concerned about the brewing environment. The FDA might need years of testing to see if the alcohol is safe to drink. The Alcohol Beverage Control (ABC) might want to ask if an alcohol manufacturing permit was issued.

Needless to say, the White House has since posted its recipe online (PDF), and a privately held small business is capitalizing on this by selling beer kits (PDF). But, let’s put the drink down for a minuet and sober up to the economy.

Labor Participation Rate Lowest Since 1981
CNN reported that the labor participation rate shows “86 Million Invisible Unemployed.”

“Only 63.6% of Americans over the age of 16 fell into that category, according to the Labor Department. That’s the lowest labor force participation rate since 1981.”

— Source: CNN, 05-04-2012

CNN noted, “there were 86 million people who didn’t have a job and weren’t consistently looking for one, according to Labor Department data.” These people seem to have at least temporarily given up looking for work because they apparently believe no jobs are available to them. Because they are not actively seeking employment within the last four weeks, they are not counted as being “unemployed” under government method of accounting (Table above: “U3” calculation).

So when one starts factoring in the actual number of people who are unemployed or working for part-time reasons because they can’t find full time jobs, the government numbers are nearly double (Table above: “U6”) verses the generally used unemployment numbers each month (Table above: “U3”).

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