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What Is The Real Unemployment Rate? (INDEXSP:.INX)

September 9th, 2012

According to the Obama administration, the unemployment rate in the United States has been slowly coming down over the past couple of years.  But is that actually true?  When you take a closer look at the data you quickly realize that the real unemployment numbers are much worse than we are being told.  For example, if the labor force participation rate was the same today as it was back when Barack Obama first took office, the unemployment rate in the United States would be a whopping 11.2 percent.  But every month the Obama administration has been able to show “progress” because of the fiction that hundreds of thousands of Americans are “disappearing” from the labor force each month.  Frankly, the way that they come up with these numbers is an insult to our intelligence.  Personally, I much prefer the employment-population ratio.  It is a measure of the percentage of working age Americans that actually have jobs.  I like to call it “the employment rate”.  So what happened to the “employment rate” in August?  It fell slightly to 58.3 percent.  It is lower than it was when the last recession supposedly ended, and it is almost as low as it has been at any point since the very beginning of this crisis.  A few times during this economic downturn it has actually hit 58.2 percent.  Needless to say, things are not getting any better.  So why aren’t the American people being told the truth?

After every other recession in the post-World War II era, the employment rate has always rebounded.

But not this time. GET A FREE TREND ANALYSIS FOR ANY STOCK HERE!


Does this look like a recovery to you?….

So how in the world can Barack Obama claim that we are better off now?

In August 2010, 58.5 percent of working age Americans had jobs.

In August 2012, 58.3 percent of working age Americans had jobs.

So where is the recovery?

[Related: Economy: 65 Signs That The Economic Collapse Is Already Happening!]

It is two years later and a smaller percentage of Americans are employed.

It is very frustrating to me that we are not being told the truth about the unemployment numbers.  The following are some more indications that the real unemployment numbers are much worse than we are being told….

-In July, 142,220,000 Americans were working.  In August, only 142,101,000 Americans were working.  So the number of Americans working fell by 119,000 and yet the government would have us believe that the unemployment rate actually declined from 8.3 percent to 8.1 percent.

-According to the federal government, 96,000 jobs were added to the economy in August and the U.S. labor force shrank by 368,000 even though our population is continually growing. If the size of the U.S. labor force had stayed the same, the official unemployment rate would have actually gone up to 8.4 percent.

-Almost all of the new jobs added in August were the result of the “birth-death” model used by the Labor Department to estimate jobs added by new businesses.  That model has been heavily criticized for being inaccurate.  If you take the 87,000 jobs added by that model out of the equation, then the U.S. economy only added 9,000 jobs in August.  But it takes somewhere around 125,000 new jobs each month just to keep up with the growth of the population.

-If the labor participation rate was sitting where it was when Barack Obama first took office, the unemployment rate in the United States would actually be 11.2 percent.

-If the labor participation rate was sitting at the 30 year average of 65.8 percent, the unemployment rate in the United States would actually be 11.7 percent.

[Related: 40 Shocking Facts About The Future Generation Of Americans]

-John Williams of Shadow Government Statistics would put the “real” rate of unemployment up around 23 percentafter adding in all workers that have given up looking for work and all underemployed workers.

-The labor participation rate for men has fallen to 69.9 percent.  This is the lowest level that it has been since the U.S. government began tracking this statistic back in 1948.

-There was more bad news for manufacturing in this latest report.  During the month of August the U.S. manufacturing sector lost approximately 15,000 jobs.

-The official unemployment rate has now been above 8 percent for 43 months in a row.

-The percentage of working age Americans with a job has been below 59 percent for 36 months in a row.

-The employment numbers for both June and July were revised downward significantly.  For June, it turns out that only45,000 jobs were added to the economy as opposed to the 64,000 that were originally reported.  For July, it turns out that only 141,000 jobs were added to the economy as opposed to the 163,000 that were originally reported.

-Incredibly, 58 percent of the jobs created since the end of the last recession have been low income jobs.

-The U.S. economy currently has 4.7 million less jobs than it did when the last recession started.

So what is the solution to these problems?

The media is breathlessly proclaiming that more quantitative easing is on the way and that the Federal Reserve will save the economy and send the stock market soaring to new heights.

A headline on CNBC on Friday boldly declared the following: “Market Sees ‘Helicopter Ben’ Coming to the Rescue“.

You can almost hear the chopper blades whirling now.

Apparently Bernanke has had a love of showering the economy with money for a very long time.  For example, you can see a picture of a young Ben Bernanke in action right here.

Of course that is a joke, but you get the point.

In recent years Federal Reserve Chairman Ben Bernanke and the rest of his cohorts have printed money like there is no tomorrow.

So have the previous rounds of quantitative easing solved our problems?

Of course not. GET A FREE TREND ANALYSIS FOR ANY STOCK HERE!

The employment rate is even lower today than it was two years ago.

But all of that money printing has sent the stock market soaring and it has enabled the big Wall Street banks to make an obscene amount of money.

The truth is that the Federal Reserve, the Obama administration and the big Wall Street banks don’t really care about you.

[Related: What Is The Best Place To Live In America? Pros And Cons For All 50 States]

They don’t really care that the middle class is rapidly shrinking and that the number of Americans on food stamps has risen by more than 14 million since Barack Obama became president.

What they care about is what is good for them.

As I have written about previously, if we continue on the same path that we have been on for the past several decades, there will never be enough jobs in America ever again.

On our current trajectory, we will end up just like Greece where the unemployment rate is now up to 24.4 percent.

Once upon a time the economy of Greece was thriving.

But today, many formerly middle class Greek citizens are leaving Greece and are picking up whatever work they can find….

As a pharmaceutical salesman in Greece for 17 years, Tilemachos Karachalios wore a suit, drove a company car and had an expense account. He now mops schools in Sweden, forced from his home by Greece’s economic crisis.

“It was a very good job,” said Karachalios, 40, of his former life. “Now I clean Swedish s—.”

Karachalios, who left behind his 6-year-old daughter to be raised by his parents, is one of thousands fleeing Greece’s record 24 percent unemployment and austerity measures that threaten to undermine growth.

Would you be willing to do that?

Don’t laugh.

Someday when the unemployment rate in the United States gets that high we will see large numbers of desperate Americans leaving this country in search of work somewhere else.

Already, an increasing number of Americans are buying expired food at auctions.

Times are hard and people are trying to get by any way that they can.

[Related: 14 Questions To Ask Yourself Before A Possible Economic Collapse]

More than 100 million Americans are already on welfare and things have not even gotten that bad yet.

This is nothing compared to what is coming.

As you can see from the chart posted near the top of this article, the last economic downturn appears to have permanently weakened the U.S. economy.

Now the next wave of the economic collapse is rapidly approaching.

How much worse will things get when it finally hits us?

That is something to think about.

Written By Michael Snyder From The Economic Collapse

Michael has an undergraduate degree in Commerce from the University of Virginia and a law degree from the University of Florida law school.   He also has an LLM from the University of Florida law school. Michael has worked for some of the largest law firms in Washington D.C., but now is mostly focus on trying to make a difference in the world.


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  1. Fred
    December 25th, 2012 at 18:13 | #1

    @Paul
    No numbers AT ALL are going to be %100 accurate BUT in South Carolina the unemployment rate us SUPPOSED to be below 8% and there have been nothing but layoffs again and again since 2008. The company I worked for has laid off half or more of its work force with NO hirebacks. I have been looking for work for two years and have ran out of unemployment. And all you %$@# out there that think we should work at Wal-Mart can kiss my ASS. They treat their workers like crap. I know some people that work there and none of them work more than part time on minimum wage. And no I DON’T like it so I WON’T work there. You go to work there and let me have your job if you like them so much!!!!!

  2. Paul
    September 10th, 2012 at 00:12 | #2

    The author’s logic is a bit flawed. For example, I retired at 50 and don’t have a job. I would be counted as unemployed and not looking. Although that may be the case, I should not be counted. Also, in the state of Kansas, if one receives a severance package, it qualifies you for unemployment. I know several people that were retirement eligible, received a severance above and beyond their retirement money. In other words, I know people with close to a million dollars on unemployment and they are breaking no laws to get it. I do know a few people on unemployment because of the drought conditions here in the midwest. No president or even a form of government could have prevented that. I for one would like to see unemployment dropped to the minimum wage. I bet unemployment would go down in a hurry then.

  3. john watson
    September 9th, 2012 at 22:33 | #3

    Figures lie and liars figure. this is really using the numbers as a shell game. The recession started Nov 2007, with the collapse starting aub 2008 and real collapse within 60 days. So that 63% employment number must be pre-collapse. And the sinking continued into 2009. the numbers for recovery need to start from 2009, then compare to 2012. Be careful with the actual numbers, too, not just percentages. The number 141 million employed is probably 20 mil low. with alleged 100 mil on welfare. that only leaves, let’s see, 315 mil total less 241 or 260 leaves only about 50 mil for children, physically unable to work, military and too old but not on SocSec. Doesn’t sound right to me. Go back to hustling from State Street, Michael Snyder, but please don’t touch any of the buttons, levers, or controls. You’re not ready for solo.

  4. YaRight
    September 9th, 2012 at 22:30 | #4

    GLP and the guy’s have known this for years.

  5. tony Sacco
    September 9th, 2012 at 22:06 | #5

    It’s the 1930s all over again, Socialism is just around the corner if Obama is re elected.

  6. Stop Trying To Hurt Obama’s Reelection Chances With Truth!
    September 9th, 2012 at 22:01 | #6

    You must be a Republican to tell the truth about the job numbers!

  7. Vince Calhoun
    September 9th, 2012 at 21:55 | #7

    Obama and his administration are liars whose despicable phoney stories show clearly they do not think like Americans. Just crooks who steak from the taxpayer…

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