Sunday, December 15, 2013

3.8 million Unemployed keep another 9.7 million Jobless

According to the Republican's theory of economics, 3.8 million unemployed Americans are keeping another 9.7 million unemployed --- because unemployment benefits CAUSES unemployment and keeps people out of work longer.

Not counting the millions who are unemployed and no longer counted any longer (because the Department of Labor no longer considers them part of the labor force --- such as an estimated 7 million 99ers and many other "discouraged workers"), when using the Bureau of Labor Statistics' U-6 rate, the U.S. currently has 12.7 million people out of work or involuntarily working part-time.

But for the past 5 years, every month, "discouraged workers" have been incrementally swept under the carpet in the government's reported statistics.

But out of 12.7 million counted in the U-6 rate, only a total of 3.8 million receive unemployment insurance compensation. And of those, 1.2 million are long-term unemployed who receive federal extended benefits, which the Democrats want to extend, but the Republicans oppose.

That means that only 9.4% of the total in the U-6 rate receive federal extended unemployment insurance benefits. But even by using the lower U-3 rate (with 10.9 million unemployed), how can 1.2 million people on federal extended benefits (with a "disincentive" to not look for work) prevent the other 9.7 million from not finding jobs?

And yet, people like Rep. Greg Walden, Oregon's sole Republican member of Congress, have been saying that extending unemployment benefits "could have the adverse effect of keeping people out of work for longer."

Question: How would extending unemployment benefits have the adverse effect of keeping people out of work when only a little more than 1/3 of the unemployed (10.9 million using the U-3 rate) receive both State and Federal jobless benefits? What, pray tell, could possibly be preventing the other 2/3 from finding work?

And if you counted another 7 million people who are also unemployed, but no longer "officially" counted (the 99ers, those who have already exhausted all their jobless benefits and are no longer included in the unemployment rate), what has prevented all those people from finding work for the first two years that they were out of work? And then what has kept them from finding jobs ever since then --- long after all their jobless benefits had already been exhausted? What was their "disincentive" to not look for work?

And if you also included another 7.7 million "involuntary part-time workers" in the U-6 rate, what is preventing them from finding full-time jobs? What is their "disincentive" for not looking for (and finding) a 40-hour-a-week job?

Using the U-3 rate, there is about one job opening for every 3 people out of work --- but by using the U-6 rate, there is only one job for every 6 Americans out work. So even if the logistics were perfect, and everyone had the necessary job skills*, and all those jobs were right there in their own backyards**, there still wouldn't be near enough jobs for everyone.

* A recent study by Rand Ghayad shows that the stigma of long-term unemployment is much more important than any skills mismatch. Wharton’s Peter Cappelli has also written a number of compelling articles and books dispelling the myth of the mismatch. (See: The American Way of Hiring Is Making Long-Term Unemployment Worse)

** Janet Yellen, Fed chairwoman: "When you're unemployed for six months or a year, it is hard to qualify for a lease, so even the option of relocating to find a job is often off the table. The toll is simply terrible on the mental and physical health of workers, on their marriages, and on their children."

So if mathematically there aren't enough jobs for jobless people, how can jobless benefits be a reason for them for being jobless and for not finding jobs? (Regardless of whether or not they actually "looked" for one of those imaginary jobs.)

When including all the "discouraged workers", going back over the past 5 years that the government no longer counts, by several estimates, we could have as many as 20 million to 35 million Americans who have no job at all (but would like one) --- but yet, only 3.7 million currently receive either regular State or Federal extended unemployment benefits.

In a survey two months ago for Investor's Business Daily, they asked: "How many members of your household are currently unemployed and are looking for employment?"

The results from their IBD/TIPP Poll indicated that 47.9 million Americans were looking for work. (No, that's not a TYPO) Out of a workforce of 154 million, that yields a gross unemployment rate of 31% among working-aged adults that would normally be in the labor force (hence, the low 63% participation rate). According to the poll, among all households, 26% had at least one member looking for work (and very few received unemployment benefits).

Millions of  "missing workers" continue to make the monthly jobs reports look better than they are. The Economic Policy Institute estimated that there are 5.66 million "missing workers" --- and if those workers were added to the Labor Department's count of unemployed workers, the unemployment rate would be 10.3 percent.

So how can 3.7 million "lazy" Americans, who are currently collecting unemployment benefits, keep another 10, 20, 30, 40 or 50 million jobless Americans (who get no benefits at all) from finding a job? Naturally, the vast majority of these people are also very-very long-term unemployed.

But people such as Rep. Greg Walden believes (or says) that it's unemployment benefits that is "keeping people out of work for longer."

Isn't it really because there aren't enough jobs? And if so, why not just say so, rather than blaming the unemployed for being unemployed?

And it's also been cited in several studies (and here, here and here) debunking the false "cause and correlation" claims about unemployment benefits being a CAUSE of higher unemployment; or that extending federal jobless benefits also extends the duration of joblessness. There is this report from the San Francisco Federal Reserve that concludes:

"Our analyses suggest that extended UI benefits account for about 0.4 percentage point of the nearly 6 percentage point increase in the national unemployment rate over the past few years. It is not surprising that the disincentive effects of UI would loom small in the midst of the most severe labor market downturn since the Great Depression."

So it's a lack of jobs that CAUSES high unemployment, not lazy Americans on the government dole.

The Republicans always use the same old talking points. Why don't any of them ever have a single, original and intelligent thought of their own? All they can do is repeat what others are saying in their right-wing echo chamber. That's the GOP's "jobs plan" --- just to cut jobless benefits.

When you hear all these people consistently repeating the same thing, over and over again ("unemployment benefits keep people out of work for longer"), it just reinforces the notion that it's all part of the GOP's grand strategy to "starve the beast" --- because to them, the unemployed are nothing but animals.

The poor and unemployed are animals!

We could point out a few of these facts to the cruel and mindless Republicans, but they don't want facts, statistics or numbers. These are people that can't be reasoned with, and that's why we are where we are today.



    Employment Stats Misleading - "The unemployment rate can decline simply because the definition of the work force excludes discouraged workers. Thus, an increase in the number of discouraged workers can lower the measured rate of unemployment."

    More misleading official US employment statistics

    Shrinking labor force a sign of discouraged workers

    More Misleading Official Employment Statistics

  2. -- From Virgil Bierschwale at --

    > In 2012 there were 315,085,365 people in the U.S.

    > 200,394,292 were employed

    > 114,691,073 were not working (as in retired, stay at home, children, etc.)

    > Take 84,016,352 people from 114,691,073 and you will have EXACTLY 30,674,721 that were unemployed last year.

  3. So if paying unemployment benefits drives up the unemployment rate even just 0.4 percentage points out of 6, your argument is to keep it going? Are you saying the good the ones receiving the benefits get outweighs the national unemployment crisis? So basically, the unemployment benefits aren't the problem. So what changed since 2008 that has driven the number of missing workers in the job market from approximately zero to 6 million ( It sure wasn't the GOP taking control of national policies with their "talking points and right-wing echo chamber." Not an original idea. I'm of the persuasion that if something isn't broke, don't fix it. But quit trying to fix what does work so it's broken too!

    1. The best case scenario would be to stop offshoring jobs to Asia so that there are enough jobs for everybody. Some working people are against extending unemployment benefits until THEY lose their job and then can't find another one. Then they change their mind, and then the system doesn't seem so broken after all.