Thursday, April 12, 2012

The real employment situation

By Rick Manning
As originally published at
Mark Twain famously misquoted British Prime Minister Benjamin Disraeli as saying, “There are three kinds of lies: lies, damned lies and statistics.”
The reported unemployment numbers prove the validity of the quote, even as the source is in dispute.

According to the U.S. Department of Labor’s Bureau of Labor Statistics, in March, there were 31,000 fewer people employed than in February, yet the politically useful unemployment rate went down to 8.2 percent: a decline that is sure to be played up in campaign commercials as evidence that the Obama economy is recovering.

Unfortunately, a review of the data behind the unemployment numbers reveals an entirely different story.

In spite of the overall non-institutionalized work-eligible civilian population increasing by 7.9 million since Obama became president, 150,000 fewer Americans have jobs today than in January 2009.

That’s right, the number of those eligible to participate in the workforce jumped by almost 8 million, yet fewer people have jobs today than the day Obama took office. I would not expect to see that statistic in his reelection campaign ads.

Most significantly, the percentage of people who are eligible to work who participate in the workforce has dropped by 1.9 percent.

To put this in perspective, if the labor participation rate had remained the same during Obama’s tenure in office as it was in January 2009, there would be 4.7 million more people counted in the workforce.

If these 4.7 million people had not dropped out of the workforce in the past three years, the unemployment rate reported by the Labor Department would be 10.8 percent. Somehow, I don’t think that the Obama campaign would be too excited by this number.

Among the many oddities in the March jobs report, one other one sticks out, as it directly contradicts the rosy weekly Labor Department reports on unemployment insurance claims declining.
Get full story here.

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