No, the "real" U.S. unemployment rate is NOT a hundred million%

[Icarus27k]

First, allow me to explain the title of the thread. In any recent casual discussion of the U.S. economy, it has become fashionable to claim that the official unemployment rate as issued by the U.S. Bureau of Labor Statistics (BLS) is not the real unemployment rate and that the real rate is much worse. For example, on June 3, 2011, BLS said that, for May 2011, the U.S. unemployment rate is 9.1%, but I saw someone in another thread here claim that the "real" rate was 27%.

Now, 27% is a much bigger exaggeration than any reasonable economist, even one who believes the official BLS rate isn't the real rate, has ever stated. The usual figure that people who claim there is a real rate that BLS is missing would have only been 15.8% for May 2011. 15.8% is the figure known to BLS as the U-6 unemployment rate. BLS has a six-point scale by which it considers "[a]lternative measures of labor underutilization", which the U-6 is the most expansive and highest number. The official rate (9.1%) is the U-3 rate.

Claiming a real rate that is worse than the official rate is an example of cherry-picking the worst possible number. Anyone could equally cherry-pick a rate that's smaller than the official rate and claim it the real unemployment rate. You could break down the unemployed population by reason of unemployment. For example, in May 2011, only 59.8% of the unemployed were unemployed because they lost their jobs. Others were unemployed because they voluntary quit, they reentered the labor force after a period of being out of it, and they are new adults or new immigrants.

Using the same logic that people use to claim there is a "real" unemployment rate that is different from the official rate, I could claim the real rate is only the percentage of the unemployed who lost their jobs. And for May 2011, that would give a "real" unemployment rate of 5.4%.

Me claiming the "real" unemployment rate is 5.4% would be a cherry-picked number that's minimizes unemployment. So, how about keeping with the time-tested official BLS figure that has been the unemployment rate for decades (9.1%)? Huh?

 

[YukonJack]

Icarus27k, why do you start a new thread if you don't want your Messiah most deservingly bashed?

 

[Icarus27k]

Icarus27k, why do you start a new thread if you don't want your Messiah most deservingly bashed?

Strange, I thought it was more of an effective debunking of laughable economic claims.

 

[ironsides]

Not sure if your aware of this or not, but when a person finishes their unemployment, whether they have a job or not they come off the government unemployment list. (just disappear) Those people have no jobs. So far more jobs are still being lost in the U.S. than are being created, and those that are being created usually require a higher education than high school.

 

[Icarus27k]

Not sure if your aware of this or not, but when a person finishes their unemployment, whether they have a job or not they come off the government unemployment list. (just disappear) Those people have no jobs. So far more jobs are still being lost in the U.S. than are being created, and those that are being created usually require a higher education than high school.

When you say "their unemployment" I assume you are referring to unemployment insurance (UI) benefits. I don't know where this idea became popular, but UI has absolutely nothing to do with determining any unemployment rate, not the official U-3 rate, not the more expansive U-6 rate, or any rate in between. Filings for UI or the total number of people on UI are completely different statistics than the unemployment rate.

 

[YukonJack]

So, Icarus27k, what is the REAL unemployment rate?

Does it bode well for your God, 0bama?

 

[Icarus27k]

So, Icarus27k, what is the REAL unemployment rate?

9.1%, the rate that BLS calls "official" and "U-3". It's the rate which has been tallied using the same methodology for decades. Before there was a six-point scale of rates (which was adopted in the 1990s), the methodology used to tally U-3 was consider the unemployment rate.

Almost everybody still refers to the U-3 figure as "the unemployment rate", but there is a vocal minority of people who claim that it's not the real rate. They usually give another percentage that they uncritically call "real unemployment".

 

[YukonJack]

9.1%, the rate that BLS calls "official" and "U-3". It's the rate which has been tallied using the same methodology for decades. Before there was a six-point scale of rates (which was adopted in the 1990s), the methodology used to tally U-3 was consider the unemployment rate.

Almost everybody still refers to the U-3 figure as "the unemployment rate", but there is a vocal minority of people who claim that it's not the real rate. They usually give another percentage that they uncritically call "real unemployment".

Now, that this is established is it conducive to 0bama's re-election in 2012?

Yes or No.

 

[Angstrom]

There are as many Americans not working as the hole population of Canada.

 

[Icarus27k]

Now, that this is established is it conducive to 0bama's re-election in 2012?

Yes or No.

A difficult question to answer. If it stays at 9.1% or goes higher during the next 17 months (that is, no progress gets made in that time to bring it down), it's definitely bad for Obama's reelection. On the other hand, if the election were today, Obama would win.

Also, most people predict the rate to decline over the next year and a half.

 

[Praxius]

When you say "their unemployment" I assume you are referring to unemployment insurance (UI) benefits. I don't know where this idea became popular, but UI has absolutely nothing to do with determining any unemployment rate, not the official U-3 rate, not the more expansive U-6 rate, or any rate in between. Filings for UI or the total number of people on UI are completely different statistics than the unemployment rate.

The way I understood it (and my knowledge on this subject is limited) ~ Is that how it works is that when someone loses their job, for whatever reason, the stats for the % of unemployed in the nation are based on how many people are currently on some sort of assistance such as unemployment insurance. If their unemployment coverage runs out, they're no longer registered as being unemployed. They might be working and then again, they might still be unemployed, but those statistics don't generally account for those not receiving any assistance, thus, the actual statistics are higher then what's told to the public.

Like I said, I don't know, I'm just going off of something I came across a few years back, ie: memory.

I did however, just come across this:

The real unemployment rate? 16.6%
Real unemployment rate higher than federal figures - MSN Money - New Investor Center

"It's bad enough that the nation's jobless rate is 9.7%. But the real national employment rate is even higher than the U.S. Department of Labor's May figure shows.

The official unemployment index, based on a monthly survey of sample households, counts only people who reported looking for work in the past four weeks. It doesn't account for part-time workers who want to work more hours but can't, given the tight job market. And it doesn't include those who have given up trying to find work.

When the underemployed and the discouraged are added to the numbers, the unemployment rate rises to 16.6%. The Bureau of Labor Statistics, a unit of the Labor Department, began tracking this alternative measure -- known as the U-6 for its department classification -- in 1995 after economists lobbied for a method comparable to the way Japan, Canada and Western Europe count their unemployed.

The truth is that even the broader measure of unemployment doesn't fully capture how difficult the job market is for U.S. workers. It doesn't include self-employed workers whose incomes have shriveled. It doesn't look at former full-time employees who have accepted short-term contracts, without benefits, and at a fraction of their former salaries. And it doesn't count the many would-be workers who are going back to school, taking on more debt, in hopes that advanced degrees will improve their chances of landing jobs.

That broader unemployment rate, or U-6, is up from 16.4% a year ago and from 9.7% in May 2008. It was 7.1% in May 2000.

"It has gone up a lot because a lot of people have been put on short hours," said economist Gary Burtless, a senior fellow at the Brookings Institution, a nonprofit public policy organization. "And there are a lot of discouraged workers."

Shortened work hours are, in fact, one of the ways this recession is different from the ones in the early 1980s and early 1990s, Burtless said. Another difference is the huge number of people who have been permanently laid off.


"Some people have lost their income altogether, and others have seen a drop in hours even if they remain employed," Burtless said. "It was a double whammy for labor income."

The two trends are especially apparent in California, where the official unemployment rate is 12.6%. Severe layoffs in early 2009 wiped out 100,000 jobs a month, according to Michael S. Bernick, a research fellow at the Milken Institute and a former head of California's labor department. And the number of people working less than 35 hours a week has exploded. The recession has left 1.5 million Californians involuntarily working part time, though they are classified as employed.

Factor in these involuntarily underemployed workers plus the burgeoning number of discouraged job seekers, and California's real unemployment rate is 20%.........."

Regardless of the actual % or how the statistics are calculated, the situation is still pretty bad and doesn't seem to be improving very much in regards to people finding full-time, decently paying work.

 

[Icarus27k]

The way I understood it (and my knowledge on this subject is limited) ~ Is that how it works is that when someone loses their job, for whatever reason, the stats for the % of unemployed in the nation are based on how many people are currently on some sort of assistance such as unemployment insurance. If their unemployment coverage runs out, they're no longer registered as being unemployed. They might be working and then again, they might still be unemployed, but those statistics don't generally account for those not receiving any assistance, thus, the actual statistics are higher then what's told to the public.

Like I said, I don't know, I'm just going off of something I came across a few years back, ie: memory.

The unemployment rates are completely configured by a monthly household survey. For each monthly update, BLS has a survey period which lasts 4-5 weeks where BLS employees telephone U.S. households. The number of households called each month is a big number, like tens of thousands. It's basically the same method as a public opinion poll, but on a much larger scale.

From the data they get after the survey period ends, they calculate the unemployment rate. Seriously, it has nothing to do with UI benefits.

Not according to the poll that says that Romney could beat 0bama.

Look it up.

An ABC News/Washington Post national poll showing showing Romney with 49% and Obama with 46%, a statistical tie. It's the only poll that shows it. Just today, I saw news of a national Fox News poll (no friend of Obama's) saying Obama 48%, Romney 41%.

 

[taxslave]

Not sure if your aware of this or not, but when a person finishes their unemployment, whether they have a job or not they come off the government unemployment list. (just disappear) Those people have no jobs. So far more jobs are still being lost in the U.S. than are being created, and those that are being created usually require a higher education than high school.

That is the same as Canada. So yes the real unemployment is higher than the official rate.

 

[ironsides]

When you say "their unemployment" I assume you are referring to unemployment insurance (UI) benefits. I don't know where this idea became popular, but UI has absolutely nothing to do with determining any unemployment rate, not the official U-3 rate, not the more expansive U-6 rate, or any rate in between. Filings for UI or the total number of people on UI are completely different statistics than the unemployment rate.

I looked it up and you were right unemployment has nothing or very little to do with it. I still say it is and always was flawed, it is just a sample survey of approx. 110,000 individuals.

"Because unemployment insurance records relate only to persons who have applied for such benefits, and since it is impractical to actually count every unemployed person each month, the Government conducts a monthly sample survey called the Current Population Survey (CPS) to measure the extent of unemployment in the country. The CPS has been conducted in the United States every month since 1940, when it began as a Work Projects Administration project. It has been expanded and modified several times since then. For instance, beginning in 1994, the CPS estimates reflect the results of a major redesign of the survey. (For more information on the CPS redesign, see Chapter 1, "Labor Force Data Derived from the Current Population Survey," in the BLS Handbook of Methods.)
There are about 60,000 households in the sample for this survey. This translates into approximately 110,000 individuals, a large sample compared to public opinion surveys which usually cover fewer than 2,000 people. The CPS sample is selected so as to be representative of the entire population of the United States. In order to select the sample, all of the counties and county-equivalent cities in the country first are grouped into 2,025 geographic areas (sampling units). The Census Bureau then designs and selects a sample consisting of 824 of these geographic areas to represent each State and the District of Columbia. The sample is a State-based design and reflects urban and rural areas, different types of industrial and farming areas, and the major geographic divisions of each State. (For a detailed explanation of CPS sampling methodology, see Chapter 1, of the BLS Handbook of Methods.)"
http://www.bls.gov/cps/cps_htgm.htm#where