Tuesday, May 8, 2012
Presto, Change-O, Unemployment Is Down
Who could imagine that unemployment could reach the stunning low of 8.1% in such a short time? I’d better get my tongue out of my cheek before it becomes permanently stuck there. These figures are horrible. To start with, this is the same president who swore at his inauguration that unemployment would never exceed 8% during his administration, and yet unemployment has stubbornly remained above 8% throughout his first term, even using Bureau funny numbers. The smoke-and-mirrors numbers count jobs created, jobs lost, and new unemployment claims, but ignores those who are unemployed and have simply given up looking for jobs and have used up their unemployment benefits.
Economists and Democratic politicians also tend to help President Barack Obama out by using a strict technical definition of “recession” in order to demonstrate that the “recession is over.” Most commonly, the definition of recession is several continuous months or quarters of zero or negative growth in the gross domestic product. The growth in the GDP is pathetically anemic, and has taken America on a roller coaster ride. But there has been occasional minor growth in that arena alone.
The huge portion of the American people who have no job and no current likelihood of getting one really don’t care about technical definitions of a recession. Being out of work long-term sounds very much like a recession to them. If the economy is improving, why aren’t new jobs and/or rehiring the order of the day?
The Bureau reported that in April 115,000 new jobs were created, while a number slightly less than that were lost. Thus, a decrease in the unemployment rate. However, during the same period of time, 522,000 simply dropped off the unemployment rolls either because they threw their hands up and stopped looking or saw the expiration of their unemployment benefits. Taking the numbers of recently unemployed combined with those on unemployment benefits but not applying for new benefits, the overall total is closer to 12%.
And that ain’t all. Include the number of recently unemployed, the long term unemployed, and the chronically unemployed and add into those numbers the permanent non-working welfare class, and the number comes much closer to 17% to 20%. If one-fifth of the potential labor force is out of work, that is by any reasonable definition a recession. In fact, without a quick reversal it starts to close in on a depression. For every one person currently taking a new job, three are dropping out of the work force. That’s a precursor to even more serious recession.
The irony of this intentional lie is that the greater the number of former workers who totally drop out of the work force, the better the Obama unemployment figures look. And yet there are large numbers of Americans who take the simple Bureau number of 8.1% as both gospel and an indicator that things are getting better. That is nothing short of whistling past the graveyard. Obama, and those who believe him make Pollyanna look like a dour pessimist.