Funny Unemployment Numbers

Posted: April 7th, 2010 by Militant Libertarian

by Steven Saw

Jack and Jill share a bucket filled with 10 apples. If Jill takes 3 apples from the bucket, how many must Jack put back in to refill the bucket? Such were the wretched word problems of third grade math. Though many were not much more difficult, we’ve learned lately that the mathematical elite learned differently than the rest of us. In the same way that the word “processes” has become “processies”, and a “business'” affairs have become the “business’s”, somewhere along the way, 2 + 2 results in something other than 4, and 10 x 10 must be anything but 100! So, forgive me my mathematical handicap, I’m simply seeking help.

Last week, we learned the improving economy added 162,000 jobs (48,000 of which were temporary government jobs for the 2010 census), yet the unemployment rate remained at 9.7%.1 According to the Bureau of Labor and Statistics, 15 million people remain out of work.2 My third grade math tells me, then, that the U.S. workforce is roughly 154,639,175 (15,000,000 ÷ 9.7%). So, if we gained 162,000 jobs last month, then the month before, we should have had 15,162,000 unemployed (15,000,000 + 162,000), right? And that divided into the workforce should resolve to 9.8% unemployment (15,162,000 ÷ 154,639,175). So, again, like a third grade word problem, the only way this could have happened is if there were another 162,000 jobs lost to balance the figures.

In the same way that the word “processes” has become “processies”, and a “business'” affairs have become the “business’s”, somewhere along the way, 2 + 2 results in something other than 4, and 10 x 10 must be anything but 100!

One cannot forgive the numbers based upon rounding. If we take 9.65% (the first number we can round up to 9.7%) of 154,639,175, we have 14,922,680. If we now add 162,000, we get 15,084,680. That divided by 154,639,175 yields 9.75%, a number we should likewise round up to 9.8%. In short, 162,000 is enough to keep rounding from rendering the exact same unemployment rate based upon the numbers we are given.

Some might claim I’m searching for fault. However, the real problem is deeply exacerbated by the fact that in the month of March, 1,702,879 people filed initial claims for unemployment.3 This means that, in order for the unemployment rate to remain at 9.7%, 1,540,879 people got jobs (1,702,879 – 162,000). Now, how is this possible when only 162,000 (only 9.5% of the jobs required) were created?

But wait, there’s more! In the same weekly unemployment report from the Department of Labor, there were 5,894,337 emergency unemployment compensation claims, an increase of 267,012 from the prior week (note that is WEEK and not MONTH). Yet, the Bureau of Labor and Statistics reports that the number is 414,000 for the month, increasing the number to 6,500,000. That’s a difference of 605,663, roughly a 10% margin of error either way you look at it! Given them the benefit of the doubt, even though there were 162,000 jobs created, another 576,000 (414,000 + 162,000) people continued to be unable to find work. Understand that if unemployment claims increased when 162,000 got jobs, the gross number must be the sum of the two. Add that 414,000 unemployed for more than 27 weeks to the 1,702,879 newly unemployed, you have 2,116,879 people. Are they saying then, that 2,278,879 (2,116,879 + 162,000) gross jobs were created and filled?

So, how do they fill the gap? In order for the unemployment rate to remain steady, the sum of the jobs created must roughly equal the number of jobs lost, plus those they are no longer tracking (those who either can no longer claim benefits or those who have simply given up). Certainly there are a percentage of those having lost their jobs who have found another one, even if part time (the Bureau of Labor and Statistics reports this number as 9.1 million people), and there are 2.3 million they don’t count!

So, let’s add it up. 15 million certified unemployed, plus 9.1 million under-employed, plus 2.3 million uncounted adds up to 26.4 million, or a 17% effective unemployment rate. Add in the 10% margin of error, and you have an adjusted unemployment rate of 18.7%. Does this sound more realistic to anyone?

Maybe the funny-money people who once worked in institutions wreaking of accounting fraud are now working for the Department of Labor and Bureau of Labor and Statistics, just making up numbers as they see fit, or maybe more accurately, as they are told!

  1. USA Today – Employers add most jobs in 3 years in March
  2. Bureau of Labor Statistics – Employment Situation News Release – April 2, 2010
  3. US Department of Labor – UNEMPLOYMENT INSURANCE WEEKLY CLAIMS REPORT – April 01, 2010

Hat Tip: National Expositor


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