Last Updated November 12, 2011
6 Million Graduates Not Counted in Unemployment Rate
Will the Bureau of Labor Statistics Ever Tell the Truth?
UPDATED - October 11, 2011 - Since the mass layoffs in late 2008 and early 2009 -- beginning 3 years ago -- the unemployment rate has consistently average around 9%. Going back to a little less than 2 years ago (99 weeks ago), MSNBC had reported that 11 million Americans had already exhausted all their eligible unemployment benefits without ever finding work. At that time there about 10 million still receiving benefits. And about half of those who lost their jobs during the Great Recession didn't even qualify for any type of unemployment benefits to begin with. See my post: Unemployment Rate is 20% in October 2011 and then see my post: 20 Million Americans - No Job & No Benefits...About 40 Woodstocks.Updated September 16, 2011
Currently the "reported" unemployment rate (U-3) is 9.1% and 9,209,574 people are currently receiving some form of unemployment insurance compensation (either State or Federal). These numbers have been fairly consistent since early 2010, up until the present. Week after week, as the first people who had been laid off in 2008 and 2009 were exhausting all their unemployment benefits, other people were just being laid off in 2010 and 2011. Think of it as a conveyor belt - as some people fell off, others were just hopping on. Those on the conveyor belt were receiving some form of UI benefits and were counted as unemployed. Those who fell off (the 99ers and "exhaustees") were swept under the carpet and either moved in with friends or family, is living in a homeless shelter or on the streets, or they took their own lives. This is also why the poverty rate went so high over the last 3 years, and why the number of people receiving food stamps has skyrocketed.
Yesterday I saw Bernie Sanders on MSNBC and he said that the real unemployment rate is 16%, and that 21 million people are now without a job. He didn't say UNDER-employed (as is the U-6 rate), but people with no job at all (as reported for the U-3 rate). Sander's number would also tally close to my estimate of 7 million 99ers and exhaustees (with job or income) + 14 million the government reports as unemployed = 21 million total.
Now add to these 7 million "exhaustees", another 4.1 million people currently receiving federal benefits (if the FUNDING isn't renewed in Obama's American Jobs Act). Now add to that those who will exhaust all their federal benefits between today and January 2012. Now that number would be well over 11.2 million people with no job and no income at all after the end of this year (4 months from now).
If we now have 21 million people unemployed, and over 9.2 million are CURRENTLY receiving unemployment benefits (NOT COUNTING 99ERS AND EXHAUSTEES), why does the media (like MSNBC just did this morning), keep saying we lost 8.7 million jobs during the recession? Are they also saying that another 12.3 million jobs were lost AFTER the recession ended?
-------------------------- As of January 20, 2011 - The number of long-term unemployed (those jobless for 27 weeks or more) has remained at 6.4 million and accounted for 44.3 percent of the unemployed...so says the Bureau of Labor Statistics.
They report: "About 2.6 million persons were marginally attached to the labor force in December, little different than a year earlier. These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey."
How do they keep track of people's job applications? They don't. The government supposedly gets their data from a very flawed and inaccurate household survey (CPS). Do any of the 15 million unemployed know anyone who has ever participated in this survey?
The BLS claims they don't get information from State unemployment offices, but soon they will be tracking 99ers and exhaustees. But how can they do this without getting the data from the local unemployment offices? It would be very east to do.
The "marginally attached" are broken down into two groups: One is "Discouraged workers" who they say DON'T look for work at all and aren't counted, and the others who haven't looked for a job in the previous 4 weeks.
They report: "Among the marginally attached, there were 1.3 million discouraged workers. Discouraged workers are persons not currently looking for work because they believe no jobs are available for them.
How can the government know if 1.3 million people aren't looking for work? And the fact is, there are not jobs available to them. What part of "outsource" don't they understand? What part of "age discrimination" don't they understand? So regardless if one looks for a job, there still aren't enough jobs for everyone - and these people are still unemployed. So why not count them?
The BLS concludes: "The remaining 1.3 million persons marginally attached to the labor force had not searched for work in the 4 weeks preceding the survey for reasons such as school attendance or family responsibilities." (Does the BLS have a magic ball? How can a monthly 50,000 household survey that repeatedly re-interviews the same the people accurately gauge the situation of 30 million unemployed and under-employed people in this country?)
Nine days ago on January 11, 2010 the Bureau of Labor Statistics reported in their December stats that: "The number of unemployed was 14.5 million, and the unemployment rate has dropped to 9.4 percent. Over the year, these measures were down from 15.2 million and 9.9 percent, respectively.
That equates to 15.2 million minus 14.5 million = 700,000 net jobs that lowered the U-3 unemployment rate by .5% with a smaller labor force. Yet Obama has recently been touting that 1.1 million new jobs were created in 2010.
But the BLS reports conflicting numbers. Here they say: "Since December 2009, total payroll employment has increased by 1.1 million, or an average of 94,000 per month." (This is the number Obama now uses.)
But either way, it's too little, too late for most of the current 14.5 unemployed and now an untold number of "under-employed" (About 15 million).
And let's not forget those who are MIA (the "exhaustees" and "99ers") - estimated to be close to 6 million and growing by about 30,000 people a week...until funding for federal benefits will eventually expire again in a little less than 13 months.
The stock market has been recovering nicely - and record profits are being made by corporations who outsourced jobs to China and India. Bailed-out banks, those who repossessed cars, raise interest rates on credit cards, and foreclosed on homes, made record profits as well. But most of those who lost their jobs one, two, and three years ago are still out of work, and eventually are no longer even counted in the government's unemployment statistics. They say these people just mysteriously "dropped out of the labor force" (as opposed to being "forced out"). The BLS now reports a smaller U.S. labor force.
When jobs ARE added, these mysterious people magically "re-enter the labor force". I'm supposing that if a person applies for a job and is then hired, he/she is then "re-entering the labor force" if they had been previously unemployed, and not just changing jobs. So for the government to make these assumptions is just plain absurd.
Meanwhile the government's reported (and sugar-coated) jobless numbers have remained stagnant (click chart below to enlarge), hovering between 9 and 10 per cent, averaging 9.5% for almost two straight years. (See: http://www.shadowstats.com/)
Who do we believe when it comes to the jobs numbers, the BLS or Obama - and does that insignificant number really matter when an estimated 8.4 million jobs were lost jobs since The Great Recession began in December 2007? As of a full year ago, simply to keep up with population growth, the labor market should have added around 2.6 million jobs (Now add another 150,000 a jobs a month for every month in 2010 to have a better idea of where we should be today.)
Today the Bureau of Labor Statistics reports that *continuing claims stand at 3,861,000 with an unemployment rate of 9.4% (* Continuing claims refers to those receiving State UI benefits, and does not include those receiving federal extended UI benefits.)
My Charles Schwab morning market report that I have e-mailed Monday through Friday.
Last May in 2010 (8 months ago) continuing claims numbered 4.5 million when the U-3 unemployment rate was reported as 9.7% - and at this time nearly 5.4 million Americans were also receiving federal extended benefits for a total of about 10 million people who were either receiving State UI or federal UI benefits.
Before this, according to Labor Department data, between April and December of 2009 5.38 million unemployed workers started receiving long-term federal jobless benefits.
In August 2010 the NY Times reported the tally of laid-off workers that were continuing to claim unemployment benefits was 4.54 million, and an additional 3.90 million people receiving extended unemployment benefits (total: only 8.44 million).
Last month 4.67 million people were receiving federal extended unemployment benefits and 4.06 million people that are currently counted as receiving traditional continued unemployment benefits for a total of 8.73 million people on state and federal unemployment rolls when the unemployment rate was reported at 9.8%.
So if today we only have 3.86 million collecting State UI ("continuing claims"), how many are still hanging on by collecting federal UI benefits now that the funding has be extended for another 13 months?
On January 20, 2011 the Department of Labor reports: "The advance unadjusted number for persons claiming UI benefits in state programs totaled 4,609,826."
Remember, the Bureau of Labor Statistics just said today that "continuing claims stand at 3,861,000."
So we have an "advance unadjusted number" (an exact number) and "continuing" claims" (a rounded off number) for State benefits reporting a difference of 748,826 people collecting regular State UI benefits today.
"The total number of people claiming benefits in all programs for the week ending Jan. 1  was 9,607,423.
Remember: Last May in 2010 we had almost 10 million too, but now we also have almost 6 million "exhaustees" who get no benefits at all. So if they WERE counted as the BLS claims they are, then why aren't there 20.5 million people reported as unemployed in the U-3 rate?
5.0 million (who initially never qualified or never filed as the BLS wrote to me a year ago.)
+ 9.6 million (the BLS says gets in either State or federal benefits today)
+ 6.0 million (estimated exhaustees, including approx. 1.75 million "99ers")
= 20.6 million TOTAL - making the U-3 rate much higher than reported as 9.4% today. Maybe it's as high as 13% with a U-6 rate of 26%!
And what will this number look like in 13 months when ALL federal benefits expire and still not enough jobs are created?
*** The BLS claims they don't get any data from the States unemployment offices (where UI claims are filed). Why don't they just start using that data? With the technology that our federal government has, it would be EASY to do! They could have a minute-by-minute accounting of every unemployed person to the exact person, at any given time. And the information could be EASILY assimilated to break down all the demographics as well (age, duration, location, industry, etc). But they don't do this because it takes away the government's ability to hide and manipulate the real numbers...it's not politically good to have us, and the world, to have access to these stark numbers...to be privy to our government's ineptness.
As an aside: According to the Census Bureau's poverty measures almost 16 million Americans lived within the poverty rate in 2008 and 2009 (and 2010 must have been the same, if not worse). An estimated 1.3 million people were kept above the poverty line JUST BECAUSE of federal extended unemployment benefits.
NOTE: If there are 5 people for every job, and "only the employed need apply", then that must mean that the 1.1 million jobs that Obama says were "created" last year (or 700,000 net jobs) were mostly people already working who had advanced (or changed jobs) as older people retired (or were forced to retire early) while younger people (fresh out of school) first moved into the labor force and filled those openings.
And this is the most amazing thing of all: Brazil created a record 2.52 million new jobs in 2010 alone, for a total of 15.04 million new jobs that were generated in the last 7 years - and Brazil is likely to create close to another three million more new jobs in 2011.
Two years ago I should have moved to Brazil!