HolyCoast: Can Obama Drive Enough People Out of the Workforce to Get the Unemployment Rate Below 8%?

Friday, February 03, 2012

Can Obama Drive Enough People Out of the Workforce to Get the Unemployment Rate Below 8%?

I'm repeating a post from December because it still applies, maybe even more so, with the unemployment rate for January now officially 8.3%, and yet we know that much of that decrease is directly related to discouraged workers leaving the work force.  Here's the post:
I bet he can.  He's working his magic already, as the Washington Post belatedly discovers:
Typically, I try to tie the beginning of Wonkbook to the news. But today, the most important sentence isn't a report on something that just happened, but a fresh look at something that's been happening for the last three years. In particular, it's this sentence by the Financial Times' Ed Luce, who writes, "According to government statistics, if the same number of people were seeking work today as in 2007, the jobless rate would be 11 percent."

Remember that the unemployment rate is not "how many people don't have jobs?", but "how many people don't have jobs and are actively looking for them?" Let's say you've been looking fruitlessly for five months and realize you've exhausted every job listing in your area. Discouraged, you stop looking, at least for the moment. According to the government, you're no longer unemployed. Congratulations?

Since 2007, the percent of the population that either has a job or is actively looking for one has fallen from 62.7 percent to 58.5 percent. That's millions of workers leaving the workforce, and it's not because they've become sick or old or infirm. It's because they can't find a job, and so they've stopped trying. That's where Luce's calculation comes from. If 62.7 percent of the country was still counted as in the workforce, unemployment would be 11 percent. In that sense, the real unemployment rate -- the apples-to-apples unemployment rate -- is probably 11 percent. And the real un- and underemployed rate -- the so-called "U6" -- is near 20 percent.
Since Obama appointees control the Labor Department numbers, I guarantee you they'll do whatever it takes to drive the official unemployment number down, hoping the ignorant masses won't realize that it took ending the hopes of millions to do it.
If you want to know the real truth about these numbers, read this.

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