Pioneer Press runs skewed unemployment number
Updated: April 2, 2012 8:15AM
The news announced by the Bureau of Labor Statistics on Feb. 3, that unemployment in the United States has fallen to 8.3 percent -- the lowest level since February of 2009 -- seemed to signal that a labor market recovery may be truly underway, which would be a definite plus for the American people and most of all for the re-election of President Obama.
Pioneer Press ran with the skewed unemployment report as part of the Sun-Times Media Group.
Although the process used by the Bureau of Labor Statistics in determining unemployment data is not easily understood, research did reveal the truth behind the January jobs report. Incidentally, the fudged report did result in boosting President Obama’s approval rating.
Herein lies the dichotomy: The worse the economy gets the better it looks for the Obama administration because of the way unemployment numbers are gathered and counted.
How is this so? The Bureau of Labor came up with the 8.3 percent unemployment rate because of figures they had obtained from Americans who were either employed or who, although unemployed, were still looking for work. Not counted were the 2.8 million individuals who wanted and were available for work, who had looked for a job sometime in 2011, but who had not searched for work in the four weeks preceding the Bureau of Labor survey. Instead, these individuals were relegated to governmental statistical oblivion and dropped some where along the wayside, yet in February most of them still remain jobless.
In other words, because the denominator (participants in the job market) shrank markedly in January, a reduction resulted in the measured unemployment rate.
The Labor Department’s birth/death model must also be examined as part of the equation employed to determine job creation. A flawed model at best, the birth/death model is suppose to compensate for the inability of the government to get good information on the number of new businesses created every month, which presumably adds jobs. 580,000 jobs were added in 2011 employing the birth/death model, or 48,000 new jobs every month, but there is no way of tracing whether any of the 243,000 January jobs were the result of the birth/death model projections.
Applying the birth/death expectation-adjusted basis to the Pioneer Press, imagine rumors that 100 employees were going to be laid off. Instead Pioneer Press management decides to fire only 50 employees, but, adjusting for expectation, 50 employees didn’t get fired. Can it then be said that 50 jobs were created at Pioneer Press by not firing the rumored 100?
Illinois racked up yet another disastrous unemployment record in 2011. Not only did Illinois place more unemployed Illinoisans on its unemployment rolls than did any other state, but Illinois’s dip was larger than those experienced by North Carolina, Hawaii, and Mississippi, leaving Illinois scraping the battle of the barrel in job creation.
The government has gotten very good at focusing attention on only one part of the story that tells of the supposedly 243,000 jobs created in January which resulted in the announced lowered unemployment rate of 8.3 percent. In actuality, the unemployment rate hovers between 10 and 15 percent.
Sooner or later the American people will wake up, as many already have, to the realization that the Obama administration’s positive words regarding the State of the Nation are mostly words.
Instead there is anemic growth at best, with a future that looks bleak if our nation continues to accrue insurmountable debt through massive and uncontrollable spending that can only result in a failed nation, unlike what is happening to Greece and other European nations, who tried to please all by giving all more than government had at its disposal to give.
Nancy J. Thorner,