We do not believe government numbers and in the following post by Paul Craig Roberts, we being to understand why. He shows us how we really have Great Depression unemployment numbers. Why is our government lying to us? We blame the education system and the media and our lack of ability to think.
Our educators have not trained us to think, to divine, and to pull together seemingly unrelated pieces of information. This ability to make up your own mind based on discovering data is not something that comes naturally, it must be learned. In schools, we do not work on readin' and 'writin, we work on feelings, cooperation and not recitation. A democracy, or in our case a republic, cannot continue to exist with an uninformed, illiterate populace.
In times past, the news media would go out and "dig up the skeletons". They would discover the news behind the news. However in today's world, where all news is entertainment, spending dollars on reporters running around the country is expensive.
Money can be spent on several sensational projects that will get the same viewership. On top of that, the news media has forgotten that its role is to present both sides of the story and instead has become a promoter of the Democratic party and its mission.
Money can be spent on several sensational projects that will get the same viewership. On top of that, the news media has forgotten that its role is to present both sides of the story and instead has become a promoter of the Democratic party and its mission.
So when you add up a country that is poorly educated and a news media that presents only one side of the story, is it any wonder that the government can come up with phony numbers and the lap dog press spews this drivel as if it was real.
In the eyes of the press, there is no "story" here. Numbers are boring and parsing the difference between U.3, U.6 and SGS would not make exciting entertainment. Yet that is where the real truth lies. If we still used the numbers of the 30's we would have nearly 23% unemployment. The difference is that in the 30's there was no unemployment compensation, social security, social security disability or welfare. Today, we don't see the unemployed lining up for food or jobs, it is all done by computer. That is not sexy news and so the news media says "Ho Hum" and moves onto the latest story about the celeb who gets arrested for whatever.
So the government feeds us the slop and we eat it up. What else are they misleading us on? Who knows but if one expects the truth from government, we still have that bridge for sale in Arizona.
Conservative Tom
More Phony Employment Numbers
December 11, 2012 by Paul Craig Roberts
PHOTOS.COM
Statistician John Williams (shadowstats.com) calls the government’s latest jobs and unemployment reports “nonsense numbers.”
There are a number of ongoing problems with the released numbers. For example, the concurrent-seasonal factor adjustments are unstable. The birth-death model adds non-existent jobs each month that are then taken out in the annual downward benchmark revisions. Williams calculates that the job overstatement through November averages 45,000 monthly. In other words, employment gains during 2012 have been overstated by about 500,000 jobs. Another problem is that each month’s jobs number is boosted by downside revision of the previous month’s jobs number. Williams reports that the 146,000 new jobs reported for November “was after a significant downside revision to October’s reporting. Net of prior-period revisions, November’s seasonally-adjusted monthly gain was 97,000.”
Even if we believe the government that 146,000 new jobs materialized during November, that is the amount necessary to stay even with population growth and therefore could not be responsible for reducing the unemployment rate from 7.9 percent to 7.7 percent. The reduction is due to how the unemployed are counted.
The 7.7 percent rate is known as the “headline rate.” It is the rate you hear in the news. Its official designation is U.3.
The Bureau of Labor Statistics has another official unemployment rate known as U.6.
The difference is that U.3 does not include discouraged workers who are not currently actively seeking a job. (A discouraged worker is a person who has given up looking for a job because there are no jobs to be found.) The U.6 measure includes workers who have been discouraged for less than one year. The U.6 rate of unemployment is 14.4 percent, about double the headline rate.
The difference is that U.3 does not include discouraged workers who are not currently actively seeking a job. (A discouraged worker is a person who has given up looking for a job because there are no jobs to be found.) The U.6 measure includes workers who have been discouraged for less than one year. The U.6 rate of unemployment is 14.4 percent, about double the headline rate.
The U.6 rate does not include long-term discouraged workers, those who have been discouraged for more than one year. John Williams estimates this rate and reports the actual rate of unemployment (known as SGS) in November to be 22.9 percent.
In other words, the headline rate of unemployment is one-third the actual rate.
The drop in the November headline rate of unemployment from 7.9 percent to 7.7 percent is due to a 20.4 percent increase in the number of short-term discouraged workers in November. In other words, unemployed people rolled out of the U.3 measure into the U.6 measure.
Similarly, a number of short-term discouraged workers roll out of the U.6 measure into Williams’ measure that includes all of the unemployed. Williams reports that “with the continual rollover, the flow of headline workers continues into the short-term discouraged workers (U.6), and from U.6 into long term discouraged worker status (a ShadowStats.com measure), at what has been an accelerating pace. The aggregate November data show an increasing rate of individuals dropping out of the headline (U.3) labor force.” In other words, the headline rate of unemployment can drop even though the unemployed are having a harder time finding jobs.
Similarly, a number of short-term discouraged workers roll out of the U.6 measure into Williams’ measure that includes all of the unemployed. Williams reports that “with the continual rollover, the flow of headline workers continues into the short-term discouraged workers (U.6), and from U.6 into long term discouraged worker status (a ShadowStats.com measure), at what has been an accelerating pace. The aggregate November data show an increasing rate of individuals dropping out of the headline (U.3) labor force.” In other words, the headline rate of unemployment can drop even though the unemployed are having a harder time finding jobs.
The U.S. government simply lowers the unemployment rate by not counting all of the unemployed. We owe this innovation to the Administration of Bill Clinton. In 1994, the Clinton Administration redefined “discouraged workers” and limited this group to those who are discouraged for less than one year. Those discouraged for more than one year are no longer considered to be in the labor force and ceased to be counted as unemployed.
If the U.S. government will mislead the public about unemployment, it will also
mislead about Syria, Iran, Iraq, Afghanistan, Libya, Somalia, Pakistan, Yemen, Lebanon, Palestine, Russia, China and 9/11. The government fits its story to its agenda.
mislead about Syria, Iran, Iraq, Afghanistan, Libya, Somalia, Pakistan, Yemen, Lebanon, Palestine, Russia, China and 9/11. The government fits its story to its agenda.
A government that wants to cut the social safety net doesn’t want you to know that the unemployment rate is 22.9 percent. A government that wants to cut the social safety net when between one-fifth and one-fourth of the workforce is out of work looks hard-hearted, mean-spirited and foolish. But if the government reports only one-third of the unemployed and presents that rate as falling, then the government can present its cuts as prudent to avoid falling over a “fiscal cliff.”
If the “free and democratic” Americans cannot even find out what the unemployment rate is, how do they expect to find out about anything?
–Paul Craig Roberts
The BLS defines unemployment six different ways...
ReplyDeleteU-1, persons unemployed 15 weeks or longer, as a percent of the civilian labor force;
U-2, job losers and persons who completed temporary jobs, as a percent of the civilian labor force;
U-3, total unemployed, as a percent of the civilian labor force (this is the definition used for the official unemployment rate);
U-4, total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers;
U-5, total unemployed, plus discouraged workers, plus all other marginally attached workers, as a percent of the civilian labor force plus all marginally attached workers; and
U-6, total unemployed, plus all marginally attached workers, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all marginally attached workers.
Is one of these (or SGS) "actual" unemployment and all the rest fakes designed by BLS to deceive the public? If that were the case, then BLS would not provide the statistics to allow computation of these other measures -- much less calculate and publish these other rates themselves. Each U- gives economists different indicators of the current labor market dynamics. At least for the 2011 to 2012 period, the media could have focused on U-6 rather than U-3, since it has declined at a faster rate the U-3. This is just another conspiracy theory that doesn't hold water under scrutiny. As for SGS, many who have been out of the labor force for 2 -3 years or longer are probably not coming back. For example, many in the 55-64 age range who lost their jobs in the 2008 recession and are nearing Social Security retirement age will probably never have a full-time job ever again. They are "workers" from the SGS perspective, but it would be more accurate to call them "people forced into early retirement by the recession." Even when the economy recovers, they won't get hired. This is a legitimate analytical reason to take them out of the U- measures of unemployment. The expansive SGS definition of "worker" would be like counting total "NFL players" as anybody who has played in the NFL in the last 5 years.
Anyway, send my check. I need it for Christmas.
--David
Under SGS they might have been forced into early retirement, however, they are still out of the market place due to the economy. So someone in 1930 who lost their job because they were 55, did not count when they lined up to get their food? Wrong, they were counted and we are fooling ourselves to think that our economy is rosy when it really is not.
ReplyDeleteDavid, your lucky money is on its way.
ReplyDeleteYou wrote…
ReplyDelete"Wrong, they were counted and we are fooling ourselves to think that our economy is rosy when it really is not."
We agree on the facts, but draw different conclusions. The banks caused the Great Depression in 1929 and the Great Recession in 2008. There were jobs for people in the 1930s. The unemployment rate dropped by 9% from 1932 to 194o, and those were all jobs here in America, not shipped overseas to China. So a 55 year old guy who lost his factory job in the Great Depression, had a much better chance of getting it back then than an older, assembly line worker today in the manufacturing sector. Unlike the guy in the 1930s, he is not likely to get hired when the economy recovers.
I don't have any objection to SGS so long as we understand that it includes a lot of "workers" who will never be working again. Also, we need to understand that it includes a lot of people who are employed, so maybe we should not call it the "unemployment rate." We should call it something like "labor under-utilization rate."
--David
P.S. Thanks. But luck has nothing to do with it. That was the safest bet I have ever made in my life, because the BLS does not rig the data. I can't imagine what more evidence it would take to change your mind.