Will the Real Unemployment Rate Please Stand Up?
Only in the government’s fantasy land does its math add up.
On Friday, the Labor Department reported that the economy added 165,000 new jobs in April. It also revised February and March data up by a combined 114,000 jobs.
More jobs are obviously a good thing.
However, the misrepresentation comes in when the Labor Department brags that the gains helped push the unemployment rate down 0.1 percentage points from March – and 0.4 percentage points from January – to 7.5%.
That’s not the real unemployment rate. It actually went up in April. And in honor of Myth-Busting Monday, I’m going to prove it…
Never Trust the Government
Not surprisingly, governments like to paint an overly rosy picture whenever possible. And when it comes to reporting the “official” unemployment rate (known as U-3 unemployment), that’s exactly what they do.
Making matters worse, the mainstream press totally goes along with the charade. I’ve read countless headlines touting how the unemployment rate is now down to a four-year low.
Even though, as I mentioned above, the real unemployment rate actually increased in April.
How can that possibly be?
Simple. The government skews the calculation by conveniently excluding three groups of people:
- Discouraged: People who have stopped looking for work because they believe that there’s no work available for them.
- Marginally attached: People who’d like to work and are physically able, but haven’t looked for work in the last four weeks.
- Involuntary part-timers: People who want to work full-time, but can’t find a full-time position.
Sorry. But if people can’t find work – or haven’t looked for work in a few weeks – that doesn’t make them any less unemployed. Just saying.
Now, you might be thinking that the government ignores these people because there aren’t enough in each category to sway the calculations, so the time and resources spent tracking them couldn’t be justified.
The numbers are actually staggering…
At the end of April, the tally for discouraged workers stood at 835,000… The total for marginally attached workers reached almost 1.5 million… And the number of involuntary part-timers stood at 7.9 million.
Lo and behold, if we add them back into the calculation, the total number of unemployed Americans almost doubles from 11.7 million to 21.9 million.
Floyd Brown, our Chief Political Analyst over at Capitol Hill Daily, agrees. As he said on Wednesday, “The sinister truth is that we’re being lied to… The actual rate of unemployment is two to three times the Bureau of Labor’s bullsh… I mean statistics.”
And the real unemployment rate currently checks in at 13.9%, not the widely reported 7.5%.
Big difference, huh?
The crazy thing is, the Bureau of Labor Statistics provides the calculation for the real unemployment rate on a monthly basis. It’s referred to as U-6 unemployment.
So it’s not like the journalists and politicians who are peddling the 7.5% figure can use the excuse that they don’t know how to calculate the real number. It’s already done for them.
Bottom line: It’s time for the real unemployment rate to stand up. Any other calculation misrepresents the truth and distorts what’s actually going on in the economy. And now that you know the truth, there’s no more reason for you to be duped by the government, or the media.
Ahead of the tape,