Hiding A Depression: How The US Government Does It

[Bones]

This guy states that actual unemployment is somewhere around 25 to even 30 percent.

Hiding A Depression: How The US Government Does It | FINANCIAL SENSE

 

[william the wie]

This is not a big secret. There are several threads on the subject. Neubarth on the one hand is quite willing to defend and has defended a 35% UE rate. Pinqy will and has defended 9.8% as about as good a measure as can be made within budgetary resources, a rather significant caveat given the increase in evictions and foreclosure and the size of the budget available. I tend to believe the false negatives and false positives created in the two surveys that lead to the U3 are grossly underestimated in favor of significantly lower unemployment than is found in reality. You might want to concentrate on the areas of exclusion from the laborforce and statistical error.

 

[editec]

It is only hidden on TV.

Most Americans who are working class know perfectly well their economy is hosed.

 

[pinqy]

The article is written by someone who has no clue how unemployment is calculated. This is clear right from his first two sentances:

The real US unemployment rate is not 9.8% but between 25% and 30%. That is a depression level of job losses...

Even if he is correct, that there is some "real" measure of unemployment and it's between 25 and 30%, the rates for the Depression were calculated using roughly the same definitions as currently used, NOT whatever definitions this guy is using for his 25%. So it's dishonest to say that if we change the definition for current UE and that matches the number (but not the methodology) used for the Depression that that means we're in a Depression. He's comparing apples and kumquats.

Next, we look at his graphics where in "box 1" he purports to show the official rate of 9.8% and then Employment as 90.2%. Well, ok, if we can assume he's talking about percentage of the Labor Force and not percentage of the population. But then in "Box 2" he uses the same scale and claims to be using the U6 measure of unemployment...but much of the U6 are people not in the labor force...so they wouldn't be part of the "100%" he's showing at first. He doesn't seem to acknowledge that there are 4 categories for people in the US:

1. Not in the Population (people who can't legally work or change jobs without legal barriers).
2. Not in the Labor Force (people not working or looking for work.
3. Employed (working).
4. Unemployed (not working but actively looking for work.

 

[editec]

The Banksters aren't in depression ergo the economy isn't in a depression.

This game of governance by semantics grows boring after a while.

Most American are hurting.

You can spin the numbers till the cows come home but that fact remains.

 

[zzzz]

The article is written by someone who has no clue how unemployment is calculated. This is clear right from his first two sentances:

The real US unemployment rate is not 9.8% but between 25% and 30%. That is a depression level of job losses...

Even if he is correct, that there is some "real" measure of unemployment and it's between 25 and 30%, the rates for the Depression were calculated using roughly the same definitions as currently used, NOT whatever definitions this guy is using for his 25%. So it's dishonest to say that if we change the definition for current UE and that matches the number (but not the methodology) used for the Depression that that means we're in a Depression. He's comparing apples and kumquats.

Next, we look at his graphics where in "box 1" he purports to show the official rate of 9.8% and then Employment as 90.2%. Well, ok, if we can assume he's talking about percentage of the Labor Force and not percentage of the population. But then in "Box 2" he uses the same scale and claims to be using the U6 measure of unemployment...but much of the U6 are people not in the labor force...so they wouldn't be part of the "100%" he's showing at first. He doesn't seem to acknowledge that there are 4 categories for people in the US:

1. Not in the Population (people who can't legally work or change jobs without legal barriers).
2. Not in the Labor Force (people not working or looking for work.
3. Employed (working).
4. Unemployed (not working but actively looking for work.

• Temporary Employees (People who work and laid off weekly or daily and called back when needed and do not get unemployment)
• Unemployed workers who quit looking because they could not find a job but will begin to look again when/if the economy starts back up. Meanwhile they draw food stamps, housing assistance ect.

The stats are just estimates and not everyone is counted. You have to catagorize people and this leaves the marginal people out in the cold. Plus the government does not want it to seem like 20% unemployment, even if this was the case. They would change the criteria or cook the data (might be doing this anyway) to keep it as low as they could.

One question. Did you believe the Government when they said there were WMD's in Iraq? The why do you beleive the unemployemnt number? Selective belief, believe what you want and not the rest. That is living in fantasyland. We live in the real world where Americans are homeless and hungry. Many want jobs and can't get them and rely on handouts. I forsee this increasing this year due to comodity increases and fuel prices in the $4 range.

 

[pinqy]

Temporary Employees (People who work and laid off weekly or daily and called back when needed and do not get unemployment)

These are counted as employed if they worked during the reference week, unemployed if they didn't work but looked for work in the 4 weeks up to the reference week, and not in the labor force if they didn't work or look for work. How would you categorize them?

Unemployed workers who quit looking because they could not find a job but will begin to look again when/if the economy starts back up. Meanwhile they draw food stamps, housing assistance ect.

How do you know they will look again and how long will that take? In the meantime, they're not looking for work and are no more participating in the labor market than full time students, stay at home spouses, retirees, or other people not trying to work. The official unemployment rate is meant to measure the relative difficulty of actually finding work, not people's perception of how hard it is. People not trying to work don't help with that. But it is important to keep track of them, which is why alternative measures exist. The U-4 (currently 10.6%) is the number of unemployed plus those who aren't looking because they don't believe they'll find work but have looked in the last year, want a job and could take one if offered (discouraged workers) divided by the Labor Force plus discouraged workers. The U-5 adds in all those who looked for work in the last year but aren't currently looking who are willing and able to take a job, and that's currently at 11.3%.

The stats are just estimates and not everyone is counted.

Well, besides not being able to count everyone individually, the people not counted in the population are those under 16, those in prison, mental institutions, or the military. That's because none of them can legally work without barriers to entry or changing jobs. They would distort the numbers (as can be shown by looking at the difference between total and civilian unemployment as calculated from 1984-94 when military was included). The homeless aren't counted either because there's just no practical way to do it.

You have to catagorize people and this leaves the marginal people out in the cold.

How? It makes no practical difference to anyone how they're calculated in the labor force statistics.

Plus the government does not want it to seem like 20% unemployment, even if this was the case. They would change the criteria or cook the data (might be doing this anyway) to keep it as low as they could.

What makes you say they would, when they haven't? There have been only minor definitional changes since the 40's (when the survey started) and there is clear methodological backing for the changes. As for cooking the books...how? The people who have access to the data have no motive, and the people who have motive have no access.

One question. Did you believe the Government when they said there were WMD's in Iraq? The why do you beleive the unemployemnt number? Selective belief, believe what you want and not the rest. That is living in fantasyland. We live in the real world where Americans are homeless and hungry. Many want jobs and can't get them and rely on handouts. I forsee this increasing this year due to comodity increases and fuel prices in the $4 range.

Do I need to respond? You seem all set to decide what my argument will be, so there's no actual need for me to make one.