Hiding The Decline: What Is The Real Unemployment Rate?
Most likely it is much more than what is officially acknowledged.
That’s because it’s all about how you count them. Right now, for instance, the official unemployment number is 10%. If you add the underemployed, though – people working part time who want full time jobs – that number jumps to 17.3%
But is the 10% number right? Most likely not. Don Surber points to one reason:
Crudele explained: “When the Labor Department puts out the January employment figures on Feb. 4, they will include an assumption that a lot of companies went out of business.
“This is something called the birth/death model that is used by the department. Last year it caused 356,000 jobs to be subtracted from the January job count… Nobody in the media will pick up on this, but the Labor Department will also do something called a benchmark revision on Feb. 4 that will subtract around 840,000 jobs that the government thought existed, but really don’t.”
356,000 jobs here, 840,000 jobs there and pretty soon you have 1,196,000 more unemployed than advertised.
That would change that 10.0% to 10.8%.
“Oops” indeed. I have an inherent distrust of estimates based on models. Maybe it’s the AGW nonsense that has turned me so against them. But still, how many “benchmark revisions” have been done in this recession and how many jobs have been shuffled off to the “do not exist anymore” bin without being added to the unemployment rate? In reality, we could easily be in the 13 or 14% area.
The Atlanta Business Chronicle had a short blurb today that gives you insight into the real size of the unemployment problem:
There are 6.4 job seekers for every job opening in the U.S., according to data released Tuesday by the U.S. Bureau of Labor Statistics. That’s the highest rate since BLS began tracking such data in December 2000.
The ratio in December 2007? 1.7 to 1.