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The Government’s Unemployment Shell Game

Posted by Steve Markowitz on February 14, 2014

For two years the government has published the unemployment figures showing the rate continuously dropping.  The latest figures for January have the US unemployment rate dropping to 6.6%.  While a decreasing unemployment rate should be a positive sign for the economy, digging deeper into the numbers tell a different tale.

Most of the drop in the unemployment rate has come as a result of a rather unusual accounting methodology used to calculate the rate.   After an extended period time the government no longer considers individuals unemployed, but instead puts them into a category of no longer searching for a job.  How ludicrous.

CNN Money has published the chart posted below that offers a more realistic presentation of the unemployment situation in the United States.  As indicated, the total working population over the age of 16 is 247 million Americans.  Only 118 million Americans actually have full-time jobs with 28 million having part-time employment.  The government’s unemployment number is 10 million Americans resulting in 6.6% number.  Left out of this equation is the 91 million working age Americans that the government considers not looking for a job.  This is voodoo accounting.

The percentage of working age Americans actually working is at the lowest point in decades.  While some of these people actually are not seeking employment, others have given up the search due to the unavailability of jobs, availability of government benefits or some other less obvious dynamic.  It is hard to consider the numbers included in the graph below as anything but disturbing.



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