Unemployment rates are bogus statistics, always were!
According to Friday’s November labor report , the U.S. unemployment rate fell 0.2% to 7.7% in October, primarily due to another 350,000 workers who dropped out of the workforce, almost three times the number of jobs created (140,000), assuming the jobs created statistic is confirmed.
The previous two months job statistics were revised downward another 49,000, after the November election of course. The monthly employment figures often have a tendency to be revised downwards in the months following the labor reports, after being announced with the usual media fanfare.
The available labor force decreased again to 63.6%, which is down from 65.7% when the recession supposedly ended in June 2009.
Three years into an economic expansion, the labor participation rate has fallen two full percentage points and three times this year (including November) it has reached the lowest level since 1981. This means that about three million more workers were working or looking for work in 2009 than in November. In the last year alone, the number of working age nonworkers grew to 89.2 million from 86.8 million.
Why are so many Americans no longer looking for work? The reasons are as numerous as the number of unemployed and underemployed and during the Obama recovery, too! Possibly workers can’t get a similar job and decide to retire early.
But there may be even unhappier reasons. Economist Casey Mulligan of the University of Chicago has documented that the huge increase in government benefits for not working—food stamps, disability payments and unemployment insurance—are increasing the incentive not to work. Welfare payments that redistribute income from workers to mostly nonworkers now exceed $1 trillion a year.
Fewer workers also mean less tax revenue, more welfare benefits paid out, and thus larger budget deficits. Labor union chiefs like to say we have to “make work pay” in America, but the very transfer payments they support may be encouraging people not to work.
According to the October Forbes Magazine the actual unemployment was 14.7% because of those workers who are no longer counted in the unemployment report. A portion of the workers not counted include those who failed to actively search for employment in the preceding 4 weeks (the previous month’s survey), regardless if they were available and ready to work.
Since the labor department’s unemployment calculation isn’t normalized with respect to those who have stopped seeking work, for whatever reason, the figures do not represent the actual rates of unemployment and never have.