Unemployment Really Isn't 9.1%

The latest unemployment figure announced by the Bureau of Labor Statistics for the Month of September, 2011 was 9.1%.  This number has been consistent over the past three months: July through September, 2011.

From September 2010 to September 2011, the increase in the number of people NOT in the labor force was 1,856,000.  According to the Bureau of Labor Statistics, the total labor force actually declined slightly and the number of people employed increased by about 700,000 people during that time.  However, if the 1,856,000 are added back into the labor force, the unemployment rate is 10.16%.

According to economists, the current economic recession started in January of 2007.  The unemployment rate for 2007 was 4.6%.  From 2007 to September, 2011 the increase in the number of people NOT in the labor force was 7,311,000.  If these individuals are added back into the labor force, the unemployment rate is 13.45%.

People enter and exit the labor force for a variety of reasons, such as: 1. expiration of unemployment benefits; and 2. leaving the labor force to attend education and training full-time, to name a few.

Studenst who have graduated from high school or college without a job and enter the labor force are not counted as unemployed.  To be counted as unemployed, you must first have a job.  People also leave the workforce permanently through illness or death.  So there are many ways this number can change.

In addition, the way the Bureau of Labor Statistics counts people as unemployed has changed over the years.  Many of these changes have coincided with economic hard times when it would be to the advantage of the then current government to change the way the numbers are counted so as to show those numbers in a more favorable light.  This has occurred during both Republican and Democratic Administrations as well as the current administration.  As a result, it is very difficult to compare statistics from one recession/depression to another.

It also does not reflect part-time employment/underemployment which is 16.5 percent of the labor force.  Right now, there are many people who are working part-time who would like to have a full-time job, but are having difficulty finding one.  This “underemployment” statistic is not reflected in the 9.1% unemployment report.

To better understand what these numbers mean, consider the following:

A. 1,850,000 people is more than the populations of Wyoming, Vermont and North Dakota combined;

B. 7,311,000 people is about 81,000 less than the populations of Alaska, Delaware, Hawaii,Montana, North Dakota, South Dakota, Vermont, and Wyoming combined;

C. The 13,992,000 currently counted as unemployed by the Bureau of Labor Statistics is about 110,000 more than the combined populations of Alaska, Delaware, Hawaii, Maine, Montana, New Hampshire, North Dakota, South Dakota, Vermont, and Wyoming;

D. The combined underemployment/unemployment rate for the United States is 25.6% (9.1 + 16.5)of the workforce or 39,428,352 people either unemployed or underemployed in the United States.  That is one out of every twelve people in the country, more than the population of twenty-two (22) states. This is approximately equal to the combined labor forces of Ireland, Great Britain and Sweden.  These three countries had a combined GDP of US$2.923 trillion in 2010;

E. If the 7,311,000 people who were removed from the workforce starting in 2007, are added back into the workforce, the unemployment rate becomes 13.45%.  The total number of poeple either unemployed or underemployed is equal to 46,739,352, about 3.3 million more than the workforce of Germany, the largest economy in Europe and the 4th. largest in the world.  The unemployed/underemployed rate is 28.97% (13.45 + 16.5). Germany’s GDP for 2010 was US$3.286 trillion.

This means that the 9.1% unemployment figure actually masks how bad the economy really is.  During the Great Depression of the 1930’s, unemployment hit a high of 25% in 1932, but soon settled down to an unemployment rate that was in the mid-teens by the second half of the Great Depression, 1936 to 1939.  That mid-teens rate counted the people who were working in organizations like the Civilian Conservation Corps (CCC) and the Works Projects Administration (WPA) of the New Deal as unemployed.  Had they been counted as employed, the unemployment rate would have been around 13 or 14 percent.  In the 1930’s either you had a job or you did not.  Other than the obvious fact that everyone was a “discouraged worker”, during the Great Depression, there was no such thing as a “discouraged worker” in the economic statistics of the 1930’s.

To be able to defeat Barak Obama in November of 2012, these facts have to be brought home to the American people.  The unemployment rate is not 9.1%.  It is actually much higher!  Most Americans are not paying attention and do not understand this.  They are likely to simply accept what the government tells them every month concerning the unemployment rate and the economy.

There is an expression, “Figures don’t lie, but liars can figure.”  To allow the Obama Administration to continue to issue, unchallenged, dubious unemployment statistics, is to allow the Obama Administration to set the starting point for the discussion on unemployment and therefore the economy.  Unemployment is not 9.1%.  Real, easily verifiable, unemployment is over 13%. Underemployment and unemployment combined is at least 25% if not 30% and that point has to be brought home to the American people if Barak Obama is to be defeated in 2012.