What is the "Real Unemployment Rate"

[Dugdale_Jukes]

All these statistics are based on self reportin surveys,not on any hard numbers from employers

How does one tally up the unemplymentffactor of the underemployed to arrive at a single TOTAL unemployment?

My "GUESS" of 25% is just that...a guess.

My 25% GUESS is meant to suggest that we have about 3/4s of all workers working to their DESIRED POTENTIAL.



This isn't chemistry kids this is SOCIAL SCIENCE.

Hard numbers do not come easily in this case.

Everything is a forking estimate.

"Estimate" does not mean "to pull out of your ass." You are claiming 25%. So define your terms. Your 25% is what as a percent of what? It's obviously not just unemployed, which is odd by itself since you were responding to a question about unemployment.

Yup it is a SWAG, I quite agree.,Pinqy

One mostly based on having lived through so many other recessions it is therefore it is MY SWAG by comparison to other recessions I've seen.


And you must realize that the numbers you are getting from the BLS are ALSO SWAGS<too, right?

No, based on the venom with you responded to my previous posts apparently you do not understand how SOFT those estimates really are.

In a sea change from the 1980s-2008 when it went without saying that "experts" had all the answers, today it is helpful to realize that the class of people manipulating data for government and finance as well as industry feel pressure to justify their existence. At least rats, roaches, sneak thieves and other parasites do their work in relative silence.

It'd be good to have a penny for every dollar lost to invalid data per se plus a penny for every dollar lost to ERP systems reliability in government and industry. My net worth would go up tens of millions.

Here is a little paradigm that is often instructive for pedants who can be helped:

Q. If one calls a cow's tail a leg, how many legs does a cow have?

A. Four. Calling a tail a leg doesn't make a tail a leg.
​

Definitions are essential.
More essential: they mean what they claim to mean.

 

[pinqy]

A structural problem is BLS numbers ignore individuals not active in state employment office systems, which brings validity into question. Not counting people doesn't make them go away; in real life they still exist and still don't have work. The structure of the reporting system makes Rube Goldberg constructs look like models of efficiency and integrity.

Absolutely untrue...the number do NOT and never have come from the unemployment offices. The unemployment rate comes from a household survey Conducted by the census.

Adjustments represent another problem. Adjustments at best diminish reliability; at worst, adjustments destroy reliability. "What adjustments?" get made are qualitative decisions, aka subjective decisions. Worse, numbers in adjustments are aggregations of history and can be wildly inaccurate in atypical situations, which in the course of human event

Which adjustments are you talking about and how do you support the idea that adjustments, which are meant to improve reliability never do?

 

[pinqy]

And you must realize that the numbers you are getting from the BLS are ALSO SWAGS<too, right?

No, based on the venom with you responded to my previous posts apparently you do not understand how SOFT those estimates really are.

Your guess, is just that...a guess, based on no supporting evidence. Out of your ass.

The BLS estimates are based on a little science I like to call "statistics." How "soft" are they?

Not seasonally adjusted numbers for April 2013 (95% confidence):
Labor Force: 154,739,000 +/- 536,182 (0.3%)
Employed: 143,724,000 +/- 607,117 (0.4%)
Unemployed: 11,014,000 +/- 351,190 (3.2%)
Not in the Labor Force: 90,436,000 +/- 602,976 (0.7%)
Marginally Attached to the Labor Force: 2,347,000 +/- 166,022 (7.1%)
Discouraged Workers: 835,000 +/- 99,427 (11.9%)
Unemployment Rate: 7.1 +/- 0.2

So, yes, I do know. Of course the numbers can be off...that's an inevitable result of statistics...but the trend is towards accuracy.

It's dishonest to compare a complete guess to a statistical survey and pretend one is no more accurate than the other.

(margins of error are not published for the household data, but can be calculated from the formulas given in Appendix: Household Data, in Employment and Earnings)

But the main point, which you keep dodging, is that you refuse to give your definitions at all, let alone defend why they are "real."

 

[itfitzme]

Again, the employment to population ratio is the most useless and misleading stat.*

Thanks for doublin down on your personal opinion. I am sure that the BLS will drop that stat because you have made it so clear that your opinion is that it is useless.

 

[itfitzme]

I used to teach labor economics and try to keep up with the literature. There is no single measure of employment that is best for all purposes. For most purposes (especially if you are using an employment variable in a regression equation), you get most of the explanatory power using a combination of U-6 and the employment-to-working age population ratio, both reported monthly by BLS. If you want to do better than this, you need to measure the "quality" of employment. The most common variables used are the length of the work week and median weekly earnings. More recently, adding a measure of part-time employment helps. This is all econometrics, what is statistically related to what.

If you are interested in other specific questions, other measures can be important. The dispersion index of employment changes is a good measure of how widespread throughout the economy changes are. Unemployment rates for youth may be better measures if your examining crime statistics. Ethnic breakdowns can help in explaining poverty and regional variations.

So it really boils down to why you want to measure employment. I suspect that some politically motivated "analysts" misuse statistics and are inconsistent, but the BLS and Census are pretty professional and all of the data is pretty transparent. Researchers can and do have access to the raw data and can develop statistics outside the reported series and create new measures for specific research projects. So I don't have much sympathy for critics who trash the agencies but have no alternative measures that can be subject to peer review.

No one wants your sympathy. It is not relevant.

How about a link to the raw data?

Current Population Survey(CPS)

Research series on labor force status flows from the Current Population Survey

If you spend some time working at it, you will find it.

 

[EdwardBaiamonte]

I used to teach labor economics and try to keep up with the literature.

how fortunate to have you here to straighten us out. Can you tell us who is right about tax and spend, Republicans who think government spending is soviet, Solyndra, bridge to no-where, make-work spending or Democrats who think tax and spend somehow stimulates the economy because bureaucrats spend money better than those who earned it. Thanks

 

[pinqy]

I used to teach labor economics and try to keep up with the literature.

how fortunate to have you here to straighten us out. Can you tell us who is right about tax and spend, Republicans who think government spending is soviet, Solyndra, bridge to no-where, make-work spending or Democrats who think tax and spend somehow stimulates the economy because bureaucrats spend money better than those who earned it. Thanks

Well, they're both right....depending on particular circumstances. Government spending is almost always less efficient than private spending, HOWEVER, there are cases where it's government spending or no spending at all, and cases where it's better to have something done inefficiently but universally rather than more efficient but more limited in scope.

No economic system or method is inherently and always right or wrong, but dependent on scale, scope, goal, and time frame. For example, without central planning, neither the Soviet Union nor most of Eastern Europe could have developed industrially as quickly as they did....in those circumstances, the free market would have been very slow. But once industrialization was acheived, central planning became a spectacularly bad idea and lead to the ruin of the Soviet Block.

Similarly, the US used central planning and government control during WWII, which lead to better militarization than free market would have, but then switching to a freer market post-war lead to an economic boom.

For some circumstances, the Keynesians are right, for others the Austrians are. No model is perfect and universal.

 

[edthecynic]

Again, the employment to population ratio is the most useless and misleading stat.*

Thanks for doublin down on your personal opinion. I am sure that the BLS will drop that stat because you have made it so clear that your opinion is that it is useless.

It is useless as a measure of unemployment. BLS is not forcing you to use it for something it does not do well, you chose that bit of stupidity on your own. The employment to population ratio can be effected by other factors than unemployment. Right now the population is growing by about 2.5 million per year and about 3 million per year are retiring. That fact will have a greater influence on the employment to population ratio than unemployment until the Boomers finish retiring.

 

[pinqy]

Again, the employment to population ratio is the most useless and misleading stat.*

Thanks for doublin down on your personal opinion. I am sure that the BLS will drop that stat because you have made it so clear that your opinion is that it is useless.

It is useless as a measure of unemployment.

Because it's not a measure of unemployment. You seem to be criticizing the emp-pop ratio as "useless" because it doesn't do something it doesn't do because it's not meant to do it. That's like complaining a thermometer is terrible at measuring blood pressure.

 

[edthecynic]

I used to teach labor economics and try to keep up with the literature. *There is no single measure of employment that is best for all purposes. *For most purposes (especially if you are using an employment variable in a regression equation), you get most of the explanatory power using a combination of U-6 and the employment-to-working age population ratio, both reported monthly by BLS. *If you want to do better than this, you need to measure the "quality" of employment. *The most common variables used are the length of the work week and median weekly earnings. *More recently, adding a measure of part-time employment helps. *This is all econometrics, what is statistically related to what. *

If you are interested in other specific questions, other measures can be important. *The dispersion index of employment changes is a good measure of how widespread throughout the economy changes are. *Unemployment rates for youth may be better measures if your examining crime statistics. *Ethnic breakdowns can help in explaining poverty and regional variations.

So it really boils down to why you want to measure employment. *I suspect that some politically motivated "analysts" misuse statistics and are inconsistent, but the BLS and Census are pretty professional and all of the data is pretty transparent. *Researchers can and do have access to the raw data and can develop statistics outside the reported series and create new measures for specific research projects. *So I don't have much sympathy for critics who trash the agencies but have no alternative measures that can be subject to peer review.

This is an excellent post. *Much of the raw data is available publicly. *I had it in MSAccess.

All by itself, any one stat doesnt mean anything.

It all comes down to the fact that there is no absolute frame of reference.*

The most basic reference is the comparison of a rate to itself, as the months progress. *Is it getting larger or smaller? *Relative to how it has trended before, how *is it trending now?

Other frames of reference are normative, that is comparing it to what it ought to be. *U-5 references the "every one that would take a job should have one." *U-6 references "Everyone that wants full time work should have that".

Using U-3, along with the employment ratio gives a better sense from just two stats. *U-3 is the basic reference to those actively looking. The limitation of U-3s dependency on a variabe labor force size is eliminated with the employment ratio. *The employment ratio references the total population. *And how they trend compared to each other means different things. If the employment ratio is rising, the economy is adding jobs ahead of pop growth. *We would expect U-3 to fall. If it rises instead, then people are joining the labor force.

For me, I find the employment to pop ratio the most informative as my "should be" reference point is that everyone should be working. *And, for whatever the "reason" given, they would be and could be, the rest is just social norms. *The more people working, the more gets built and accomplished giving a better standard of living.

Again, the employment to population ratio is the most useless and misleading stat. Right now more people are retiring than entering the workforce, so the economy IS adding jobs in addition to replacing the retirees as the ratio falls and will continue to fall until the Boomers finish retiring.

Thanks for doublin down on your personal opinion. I am sure that the BLS will drop that stat because you have made it so clear that your opinion is that it is useless.

It is useless as a measure of unemployment.

Because it's not a measure of unemployment. You seem to be criticizing the emp-pop ratio as "useless" because it doesn't do something it doesn't do because it's not meant to do it. That's like complaining a thermometer is terrible at measuring blood pressure.

It might help if you followed the conversation from the beginning.

 

[pinqy]

This is an excellent post. *Much of the raw data is available publicly. *I had it in MSAccess.

All by itself, any one stat doesnt mean anything.

It all comes down to the fact that there is no absolute frame of reference.*

The most basic reference is the comparison of a rate to itself, as the months progress. *Is it getting larger or smaller? *Relative to how it has trended before, how *is it trending now?

Other frames of reference are normative, that is comparing it to what it ought to be. *U-5 references the "every one that would take a job should have one." *U-6 references "Everyone that wants full time work should have that".

Using U-3, along with the employment ratio gives a better sense from just two stats. *U-3 is the basic reference to those actively looking. The limitation of U-3s dependency on a variabe labor force size is eliminated with the employment ratio. *The employment ratio references the total population. *And how they trend compared to each other means different things. If the employment ratio is rising, the economy is adding jobs ahead of pop growth. *We would expect U-3 to fall. If it rises instead, then people are joining the labor force.

For me, I find the employment to pop ratio the most informative as my "should be" reference point is that everyone should be working. *And, for whatever the "reason" given, they would be and could be, the rest is just social norms. *The more people working, the more gets built and accomplished giving a better standard of living.

Again, the employment to population ratio is the most useless and misleading stat. Right now more people are retiring than entering the workforce, so the economy IS adding jobs in addition to replacing the retirees as the ratio falls and will continue to fall until the Boomers finish retiring.

It is useless as a measure of unemployment.

Because it's not a measure of unemployment. You seem to be criticizing the emp-pop ratio as "useless" because it doesn't do something it doesn't do because it's not meant to do it. That's like complaining a thermometer is terrible at measuring blood pressure.

It might help if you followed the conversation from the beginning.

I did...and it was never proposed that the emp-pop ratio measured Unemployment. The claim was that it is most useful in determining the proper level of Employment. Going to an extreme, a 40% emp pop ratio would show a problem regardless of how many people were unemployed or wanted to work because that's a large burden on the few employed. Especially considering that the population in question does not include children, prisoners or people in institutions.

The emp-pop ratio going down is not necessarily bad, but it certainly can be a negative sign and is very useful to monitor.

 

[itfitzme]

Again, the employment to population ratio is the most useless and misleading stat. Right now more people are retiring than entering the workforce, so the economy IS adding jobs in addition to replacing the retirees as the ratio falls and will continue to fall until the Boomers finish retiring.

Because it's not a measure of unemployment. You seem to be criticizing the emp-pop ratio as "useless" because it doesn't do something it doesn't do because it's not meant to do it. That's like complaining a thermometer is terrible at measuring blood pressure.

It might help if you followed the conversation from the beginning.

I did...and it was never proposed that the emp-pop ratio measured Unemployment. The claim was that it is most useful in determining the proper level of Employment. Going to an extreme, a 40% emp pop ratio would show a problem regardless of how many people were unemployed or wanted to work because that's a large burden on the few employed. Especially considering that the population in question does not include children, prisoners or people in institutions.

The emp-pop ratio going down is not necessarily bad, but it certainly can be a negative sign and is very useful to monitor.

Some people see the world through a myriad of what is wrong with things. Others see it through the perspective of what value things have.

Alone, the unemployment ratio is limited by the changing labor pool, the group that are seeking work. The labor pool is affected by socio-economic factors and changes with time. Since ERA, the entry of women and minorities into the workforcenhas increased that labor pool considerably. This is not reflected in simple unemployment numbers. The emp-pop ratio has changed dratically since ERA. BY 2000, the emp-pop ratio hit a peak. Since then, it has declined. And this decline is indicative of a significant change in the economy.

 

[editec]

If a person is working full time and they are eligible for welfare?

They are basically UNEMPLOYED.

Don't like that definition?

Doesn't jobe with BLS standards?

Tough noogies.

Employment means working to support oneself.

If one cannot find the work that can do that, is one truly employed?

We need to stop bullshitting ourselves as a society.

 

[itfitzme]

Again, the employment to population ratio is the most useless and misleading stat.*

Thanks for doublin down on your personal opinion. *I am sure that the BLS will drop that stat because you have made it so clear that your opinion is that it is useless.

It is useless as a measure of unemployment. BLS is not forcing you to use it for something it does not do well, you chose that bit of stupidity on your own.

What the f**k are you even talking about?

 

[pinqy]

Employment means working to support oneself.

And who else besides you claims this as a definition? No dictionary and no economist ever.

You can't just assert a non-standard definition no one before has ever used and claim that's the proper one.

Well, ok, apparently you can.....but it's wrong.

 

[EdwardBaiamonte]

If a person is working full time and they are eligible for welfare?

They are basically UNEMPLOYED.

Don't like that definition?

Doesn't jobe with BLS standards?

Tough noogies.

Employment means working to support oneself.

If one cannot find the work that can do that, is one truly employed?

We need to stop bullshitting ourselves as a society.

what BS?? Under Obama u6 has leveled off at about 14% about double what it was before the recession. This is an epic liberal fail much like the Great Depression was an epic liberal fail!!

 

[edthecynic]

If a person is working full time and they are eligible for welfare?

They are basically UNEMPLOYED.

Don't like that definition?

Doesn't jobe with BLS standards?

Tough noogies.

Employment means working to support oneself.

If one cannot find the work that can do that, is one truly employed?

We need to stop bullshitting ourselves as a society.

what BS?? Under Obama u6 has leveled off at about 14% about double what it was before the recession. This is an epic liberal fail much like the Great Depression was an epic liberal fail!!

When Bush left office U-6 was 14.2% and skyrocketing to 17%. It is now 13.9%. At no time during the Bush regime was the U-6 ever half of 14%.

 

[EdwardBaiamonte]

When Bush left office U-6 was 14.2% and skyrocketing to 17%. It is now 13.9%. At no time during the Bush regime was the U-6 ever half of 14%.

dear, U6 today after 5 years under Obama is about double what it was before the recession. This is a huge huge epic fail for liberalism much like FDR's Great Depression was another huge huge epic fail for liberalism.

That liberals make FDR and Obama great heros is testimony to their pure and perfect stupidity. Now you can understand how millions and millions could have followed Hitler Stalin and Mao. People, liberals in particular, like to be part of the brainless herd.

 

[pinqy]

When Bush left office U-6 was 14.2% and skyrocketing to 17%. It is now 13.9%. At no time during the Bush regime was the U-6 ever half of 14%.

dear, U6 today after 5 years under Obama is about double what it was before the recession. This is a huge huge epic fail for liberalism much like FDR's Great Depression was another huge huge epic fail for liberalism.

The U-6 is currently 13.9. The lowest it was in 2007 was 8.0 which is way more than about half. The only time ever that the U-6 was in the 6.9, 7.o range was in 2000.

 

[EdwardBaiamonte]

When Bush left office U-6 was 14.2% and skyrocketing to 17%. It is now 13.9%. At no time during the Bush regime was the U-6 ever half of 14%.

dear, U6 today after 5 years under Obama is about double what it was before the recession. This is a huge huge epic fail for liberalism much like FDR's Great Depression was another huge huge epic fail for liberalism.

The U-6 is currently 13.9. The lowest it was in 2007 was 8.0 which is way more than about half. The only time ever that the U-6 was in the 6.9, 7.o range was in 2000.

dear U6 after 5 years of Obama's idiotic liberalism is unimaginably high by historic standards just as it was unimaginably high after ten years of FDR's idiotic liberalism.

Quibbling or distracting over the exact numbers shows a lack of character about facing the truth of Obama and liberalism