I am unsatisfied with the methods used to report employment, unemployment, the workforce, etc.
I hear reports of 5% unemployment, but from what I see in real life, that 5% number is inaccurate. We get these nonsense “U” numbers that are bogus. Plus they publicize seasonally adjusted numbers, but not the non-adjusted real numbers. The point is that these numbers do nothing to indicate what the real unemployment is.
So I went to the BLS website, and just started collecting some numbers to see if anything stood out. And I have found a group of numbers that when put together, gives more of a feel for what is really happening with jobs. In other words, despite the media claims that unemployment is down – it really is going up. And if we all just observe the climate of the U.S. right now, we can tell that employment is not where it has been prior to the 2008 economic crash.
The numbers come from this page from the Bureau of Labor. I am using the total population of everyone 16 and over, the number of people employed, the number of people unemployed (these two numbers combined are the total workforce), and the number of those out of the workforce. The numbers in the table are averages for the entire year.
Before I get to today’s numbers, here’s an example. The best numbers from the chart are from the year 2000. What was happening in 2000? There was Bill Clinton, the Republican Congress, and Welfare Reform. People had to get out and work before their welfare benefits expired. So here are the numbers. (Pop = population; wf = work force)
Total Population non-Institution (16+) – 212,577,000
Employed – 136,891,000 (64.4% pop; 96.0% wf)
Unemployed – 5,692,000 (2.7% pop; 4.0% wf)
Out Of Workforce – 69,994,000 (32.9% pop)
What do we get? First, the 4.0% of the workforce that’s unemployed is the U-3 number that is publicized. But with regards to the population, 35.6% of the people are truly unemployed. Most of those people are not participating in the workforce for various reasons… retirement, homemaker, rich enough to stay home, sponging off of others, etc. 2.7% of the population are actively pursuing employment. 64.4% of the population working is our high water mark. So now you have an idea how this works. Now I am going to give you three sets of numbers.
Total Population non-Institution (16+) – 215,092,000
Employed – 136,933,000 (63.7% pop; 95.3% wf)
Unemployed – 6,801,000 (3.1% pop; 4.7% wf)
Out Of Workforce – 71,359,000 (33.2% pop)
Total Population non-Institution (16+) – 217,570,000
Employed – 136,485,000 (62.7% pop; 94.2% wf)
Unemployed – 8,378,000 (3.9% pop; 5.8% wf)
Out Of Workforce – 72,707,000 (33.4% pop)
Total Population non-Institution (16+) – 233,788,000
Employed – 145,362,000 (62.2% pop; 94.2% wf)
Unemployed – 8,924,000 (3.8% pop; 5.8% wf)
Out Of Workforce – 79,501,000 (34.0% pop)
These are the numbers that involve the Bush presidency. What do we see? We had the 9/11 attacks in 2001, and we see how the unemployment percentage jumped up, but not the out of workforce percentage. But from 2002 thru 2008, things remained constant with regards to the percentages. Notice the population is continually increasing with these numbers. Also notice this… those out of the workforce on a percentage basis went up 1.1% from 2000-2008.
Here’s some data from the Obama presidency.
Total Population non-Institution (16+) – 235,601,000
Employed – 139,877,000 (59.3% pop; 90.7% wf)
Unemployed – 14,265,000 (6.1% pop; 9.3% wf)
Out Of Workforce – 81,659,000 (34.6% pop)
Total Population non-Institution (16+) – 247,947,000
Employed – 146,305,000 (59.0% pop; 93.8% wf)
Unemployed – 9,617,000 (3.9% pop; 6.2% wf)
Out Of Workforce – 92,025,000 (37.1% pop)
I put in the 2009 data to show the immediate effects of the 2008 economic crash that occurred in the last quarter of that year, and we can see the unemployed percentage among the population went up 2.3% from 2008. Now the media’s U-3 number (unemployment percent among the workforce) took a higher percentage jump from 5.8% to 9.3%, but we will see how using the workforce as a reference is a fallacy.
Look, in 2014, the media trumpets that unemployment is down to 6.2%… yay. Wait… those out of the workforce have ballooned up to 37.1% of the population. Those not working at all are at 41% of the population, the highest since 1983.
This to me is a much more realistic reading on unemployment. We can expect a certain percentage of the population is not working. The year where the most people were employed, 35.6% of the population was not working, and the overwhelming majority of those were considered as those not looking for work.
One more thing. If you want to know if we have bounced back from 2008… the media’s U-3 says 2008 was 3.8%… 2014 was 3.9%. However, look at the raw numbers. Between 2008 and 2014, there is an increase of less than one million people employed… while those out of the workforce increased by more than 12 million people. Enjoy the economic recovery, folks.