unemployment rate would be 7.4 % counting drop-outs, not 5.6%

[papau]

DROP OUTS BECAUSE IT IS JUST TOO HARD TO FIND A JOB - SO THEY GIVE UP LOOKING FOR A JOB - ARE THE ONLY REASON BUSH DOES NOT REPORT A 7.4% UNEMPLOYMENT RATE.

"All Bush has to show for three years of supposed job-creation policies is a mountain of debt"

http://www.nytimes.com/2004/03/12/opinion/12KRUG.html?hp

OP-ED COLUMNIST
No More Excuses on Jobs
By PAUL KRUGMAN Published: March 12, 2004


...(Bush says) the real (job) situation is much better than you're hearing ...the establishment survey doesn't count jobs created by new businesses; not so. The bureau knows what it's doing — conservative commentators are raising objections only because they don't like the facts.

And even the less reliable household survey paints a bleak picture of an economy in which jobs have lagged far behind population growth. The fraction of adults who say they are employed fell steeply between early 2001 and the summer of 2003, and has stagnated since then.

But wait — hasn't the unemployment rate fallen since last summer? Yes, but that's entirely the result of people dropping out of the labor force. Even if you're out of work, you're not counted as unemployed unless you're actively looking for a job.

We don't know why so many people have stopped looking for jobs, but it probably has something to do with the fact that jobs are so hard to find: 40 percent of the unemployed have been out of work more than 15 weeks, a 20-year record. In any case, the administration should feel grateful that so many people have dropped out. As the Economic Policy Institute points out, if they hadn't dropped out, the official unemployment rate would be an eye-popping 7.4 percent, not a politically spinnable 5.6 percent.

In short, things aren't as bad as they seem; they're worse. But should we blame the Bush administration? Yes — because it refuses to learn from experience.<snip>




E-mail: [email protected]

[Frodo]

1. So people are lying right?

They get asked "why aren't you looking for work". The answers range from "no day care" to "don't need two jobs in this family" to "there just ain't no d@mn jobs IN this economy to find!"

The problem with the assumption the article makes is that it assumes the bulk of the people dropping out of the labor force fall into the last category. They WANT/NEED a job but have given up looking because they have become "discouraged". Unfortunately for that theory, people who fall into that category are actually tracked on the survey and the numbers haven't really jumped up.

So they assume that people have given up looking for work because there are no jobs to be found.... BUT unlike earlier years, they're just lying about it when asked.


There just might be another explanation.

[papau]

2. There just might be another explanation - but I doubt it

If response is "no day care" do we ask "is this a change in your situation" -cuts in social service funding, cuts in employer benefits all might trace to a bad economy.

Likewise as to "don't need two jobs in this family" the question needs a "Is this a change in your attitude because jobs are hard to find" follow up question.

Survey questions - like polling questions - are often designed to avoid the hard facts. When 50% of a given ethinic or color sub-group of the population in a given area can not get work - and it has been this way for 3 years - and this is a drastic decrease from the 15% to 20% normally out of work - perhaps "don't need no damn job" is the right response even if you want a job.

There just might be another explanation - but I doubt it.

[RainDog]

4. on the other hand

since people often define their worth and status in this society by their ability to get a decent job, maybe they also find "reasons" to explain why they don't have a job so that they don't look like "losers."

if you're going to speculate, there are all sorts of ways to go with that one.

one thing I do know is that all the service jobs that may be created by a two-tier system in this nation are not going to supply the level of wages that manufacturing jobs have in the past.

before, when there were massive blue collar job exports, everyone was supposed to be retrained and find another job which would still pay better-than poverty level wages. (and if I remember, there was a long pattern of this, from industrialized areas in the northeast, to less industrialized in the midwest, to right to work in the south, to Mexico and beyond.)

now, with white collar jobs moving out of the country, all those people who trained for IT are supposed to train for what? Wal-mart?

when the minimum wage is so much less than the baseland poverty level wage, it's kind of hard to find something good in the current job situation that the Bush policies have encouraged.

with a failure of leadership in both the business and political establishment to move into a 21st century energy economy, because of the all-too-common short sightedness of the political and shareholder biz cycle...

I really wonder what sort of crisis it is going to take to make leaders in this country wake up and address these very real issues. We need a revolution in biz thinking in terms of energy, for instance.

That is not going to come from entrenched bizzes, it appears so far.

Yet who has the capital and the influence to make positive changes possible?

[lams712]

3. I learned a LONG time ago in one of my econ. classes....

that you could safely DOUBLE the "official" unemployment rate precisely because "discouraged" workers are NOT counted in the stats.

[peacewarrior]

5. 5.6%?

They are using the same reporting as when Bush 1 or Clinton was in office. Besides does the 5.6% also count people who started their own businesses. You can't just stop looking for a job and not have any income after unemployment runs out. You'd starve and that would make you find any job just to survive.

Be ready to see the unemployment rate fall under 5% by election day, unless there is another terrorist attack which would kill our economy.

It's foolish of us to keep harping about unemployment when the reported unemployment rate (flawed or not) is relatively low. They're already pointing out that it's at the save level as when Clinton ran for re-election in '96. I thought it was less then but who knows?

[mhr]

6. Unemployed 46 Months, BSEE, MBA, Commercial Pilot, Veteran

Jobs?

What F**cking Jobs?

You folks just don't get it!

Don't even talk to me about retraining.

Retrain for what?

[Frodo]

7. I can't agree

"You can't just stop looking for a job and not have any income after unemployment runs out. You'd starve and that would make you find any job just to survive."

Sure you can. You "shouldn't" and most people haven't. Look at mhr here. He hasn't given up (though "discouraged" is the least of it). But people certainly do. They live off of savings or family/friends.


"Be ready to see the unemployment rate fall under 5% by election day"

Not a chance in he11. And I'm one of the more bullish members of the board.

You see, the unemployment rate HAS been falling, but a big part of it HAS been that people have left the job market. If the job market DOES improve over the next few months expect the rate to RISE as hundreds of thousands of people get back into the market thinking things are getting better.

I predicted the downward trend (AND the rise to come this summer)several months ago based on the same factors and stick by it.

"It's foolish of us to keep harping about unemployment when the reported unemployment rate (flawed or not) is relatively low."

Well, THAT you got right. None of the measurements look so much worse than 1996 that we could claim things were "great" then and "horrible" now. But that doesn;t mean things are good enough.

[lams712]

8. Yes they are using the same reporting as when

BUSH 1 and Clinton were in office and the SYSTEM STILL UNDERCOUNTS THE TRUE NUMBER OF UNEMPLOYED!!!!!!!! Even during the salad days of the Clinton years I was pointing out that despite the REPORTED low level of unemployment, the true level was 1.5X to 2X larger than that because of the flawed methodology.

[TreasonousBastard]

9. The rate is far too easy to fudge...

and the pathological liars we have in office now are probably more adept at it then previous ones.

The question isn't so much jobs-- since many people, like me, are sort of surviving on part-time work and general hustling for a buck. I don't even think of a full-time job that pays the bills any more.

The unemployment rate is a lie, and always has been. It doesn't take into account the underemployed, the forced overtime, the picking up of the work of laid off employees, the reduction in real wages and benefits... All of which are cancers far worse than simple unemployment.

The question should be a refrain of Clinton's-- "Are you better off now than you were four years ago."

How many would say yes?