Unemployment Down! Really?

The unemployment figure for January was released this weekend by the Bureau of Labor Statistics. It shows that the unemployment rate has dropped to a new low of 8.3%, with new jobs at about 243,000. President Obama is far from his promised goal, but he is taking bows for a “slow but sure recovery.” Should he really be crowing about this weak recovery? And is it really even a recovery?

First of all, the official figures take little or no account of those who have exhausted their unemployment benefits and have just given up. Even those who have continued to try, hard, to find jobs, but simply got worn out by the efforts and decided to wait awhile before trying again are not in the figures. The report specifically says that “2.8 million persons were marginally attached to the labor force, unchanged from a year earlier. These individuals were not in the labor force, wanted and were available work, and had looked for a job some time in the prior twelve months. They were not counted as unemployed because they had not searched for work in the four weeks preceding the survey (emphasis added)."

That’s 2,557,000 more people than the claimed job increase, but they don’t count because they don’t have jobs but aren’t unemployed. Only a giant bureaucracy could make that distinction without a difference. I can just picture Joe Schmidlap saying to himself, “It’s time to party. I don’t have a job. I’ve been out of work for two years. There are no jobs available for me. My unemployment benefits have run out. My savings are gone. We’re about to get kicked out of our home, and my wife and kids literally don’t know where we’re going to get our next meal. But thank God, I’m no longer unemployed.”

Now let’s work with that 2,800,000 number a little. Part of the non-farm job “increase” is based on “seasonal adjustments” and “estimates of the expected number of people still unable to find work.” First, the seasonal adjustments are routine, but they don’t take into account that seasonal hiring was itself weak, and this recession has gone on long enough that traditional seasonal adjustments are essentially meaningless. So let’s look at the “expectations.”

If the government office estimated that the number of longterm jobless (we can’t say “unemployed”) would be 3,043,000, but is in fact only the claimed 2,800,000, then the adjusted expectation figure is 243,000 less. By governmental and mystical “expectation-adjustment,” that’s 243,000 jobs created. Now you know why the Obama administration is so adept at using the phrase “created or saved.” When you can’t come up with a real number created, call it saved, and ignore the entire 2,800,000 who have no jobs but aren’t unemployed. In fairness, that's not the only way the government reached that 243,000 figure, but you see how the calculations work. Has your brain frozen yet?

Skipping the phony distinction between “unemployed” and “jobless,” adding the 2,800,000 back into the figures, along with those who were experiencing unemployment even before the big crash, the true unemployment figure is actually somewhere between 16% and 20% of the available work force. If for the sake of argument, the true percentage in January dropped from, say, 18% to 17.5%, that is still totally unacceptable in a great nation like America. And at that rate, it would take decades to get back to a normal unemployment rate.

That is being generous. Take out the seasonal adjustments and “expectations” and it’s hard to believe that even the 243,000 jobs increase is real. At best, the percentage probably remained static, and there might actually have been a significant decrease in employment. What provable net increases there were occurred in the private sector, with the biggest increases in professional and business services, leisure and hospitality (surprisingly), and to a smaller extent, manufacturing.

The government jobs which were supposed to be cut weren’t, so public employment did not change significantly. There are two reasons for that. First, the Prevaricator-in-Chief doesn't want to lose the crucial support of public employees and their unions. Second, a sensible cut in public employment would still be a huge number, thus increasing the unemployment rate substantially.

The biggest losses were in farm employment, with California leading the way. And once again, the old adage is proven to be true: “Figures don’t lie, but liars sure can figure.” Regardless of whether you believe the figures or not, the dismal 8.3% unemployment rate is nothing for Obama to crow about. Americans should find it unacceptable that Obama’s true message is “it could have been worse.”