The truth about the unemployment numbers is not good. Anyone who pays attention knows that the way the unemployment rate is calculated provides no consideration for people who stopped looking for work or are seriously underemployed.
Jim Clifton the Chairman and CEO at Gallup explains the BIG LIE about unemployment rates in a short but insightful article at Gallup.com
Is it just me?
Most people suffering from unemployment or underemployment will wonder why. Since so much of our personal identity is related to the work we do, the ability to provide for ourselves and our families and the value we contribute to society. People whose careers are stifled (or not even getting off the ground) ask “why am I in this circumstance?”. Did I not get the education I should have? Do I need to move to a new town? Did a past mistake result in an entanglement with the legal system and now I have a black mark on my record that will forever hinder my job prospects? Sometimes despite valiant efforts to find a job or a better job, the opportunities in the job marketplace just aren’t here. In a robust economy where employers are competing for workers throughout the skill spectrum, employers are forced to overlook factors that otherwise might give them pause in making a new hire. For example in Florida during the construction boom of the mid 2000′s, many general contractors decided they were NOT interested in drug testing job applicants. Even though many Professional Employer Organizations (PEOs) offer that service, the general contractors knew that drug testing would shrink their potential workforce and that would make it harder to find workers. Times have changed and once again it is an employers market, so these factors come back in to play. Applicants without a precise skill match, lack of experience or any background blemishes will be that last to be employed. The proof of this is that despite a decade of inflation and recent stock market growth, there has been NO real wage growth for 40 years. According to Pew Research Center:
But after adjusting for inflation, today’s average hourly wage has just about the same purchasing power as it did in 1979, following a long slide in the 1980s and early 1990s and bumpy, inconsistent growth since then. In fact, in real terms the average wage peaked more than 40 years ago: The $4.03-an-hour rate recorded in January 1973 has the same purchasing power as $22.41 would today.
So in seeking and answer to the question of “Is it just me?”, we look to the Department of Labor unemployment rate for a clue. Unfortunately, the data they publish is misleading.
Why mislead the Public? ..because it serve the interest of:
The one thing politicians like most is staying in power. Duh. They have a real incentive to convince the public that things are great. If you are unemployed or underemployed, it’s not their fault, it’s yours. A real conversation about the workforce participation rate (at some of the lowest numbers since the early 1980s) is not the number they want you to focus on. An of course in a pinch to make the numbers look good right before an election, they are not above outright lying about the truth on the unemployment numbers.
Of course the Wall Street barons want to promote the narrative that the economy is good and getting better and stock will be rising in value. While this may be true, downplaying the unemployment problems fuels demand for stocks and bonds that are their lifeblood. They easy money policies of the Fed motivated company boards to borrow money (after all.. its practically free) to purchase back their stock. So the stock market booms and Wall Street has a great story to tell investors, yet no real job growth was created. Billions of dollars printed and loaned out and the average working person in America got bupkus.
It almost goes with out saying that the media adopts the go-along/get-along attitude about unemployment. It serves the media no purpose to make trouble for the politicians and Wall Street crowd. Easy access to politicians is key to their story telling and Wall Street pays for lots of advertising. These are two groups the media wants to protect.
Mr. Clifton Chairman and CEO at Gallup notes that:
There’s no other way to say this. The official unemployment rate, which cruelly overlooks the suffering of the long-term and often permanently unemployed as well as the depressingly underemployed, amounts to a Big Lie.
And it’s a lie that has consequences, because the great American dream is to have a good job, and in recent years, America has failed to deliver that dream more than it has at any time in recent memory. A good job is an individual’s primary identity, their very self-worth, their dignity — it establishes the relationship they have with their friends, community and country. When we fail to deliver a good job that fits a citizen’s talents, training and experience, we are failing the great American dream.
Gallup defines a good job as 30+ hours per week for an organization that provides a regular paycheck. Right now, the U.S. is delivering at a staggeringly low rate of 44%, which is the number of full-time jobs as a percent of the adult population, 18 years and older. We need that to be 50% and a bare minimum of 10 million new, good jobs to replenish America’s middle class.
I hear all the time that “unemployment is greatly reduced, but the people aren’t feeling it.” When the media, talking heads, the White House and Wall Street start reporting the truth — the percent of Americans in good jobs; jobs that are full time and real — then we will quit wondering why Americans aren’t “feeling” something that doesn’t remotely reflect the reality in their lives. And we will also quit wondering what hollowed out the middle class.
True that Mr. Clifton, true that.