Are we being lied to or mislead by the "5% unemployment" statistic

Posted by: xhammy

Less than 50% of American adults are working, the statistic doesn't account for persons with multiple jobs properly (example if one person has two jobs and one has none they are both "employed"), and does not reflect welfare recipients in any way, shape, or form.

  • Lies or part truth-lies

  • Its totally legit

79% 15 votes
21% 4 votes
  • It's five percent if you don't count people with part time jobs and a whole bunch of other things.

  • What Texas14 said.

  • The mainstream media don't tell the truth about the actual numbers of people unemployed and it should include the ones that has given up work or has lost their unemployment benefits.

  • the 5% unemployment measure is and always has been the measure most commonly used as a casual litmus test for how the economy is performing. Those people who suddenly prefer to use different measurements usually do so because they do not like whoever it is that is president right now, and enjoy jumping on any statistic that makes the president look bad.

  • See comment below.

Leave a comment...
(Maximum 900 words)
xhammy says2015-07-09T11:41:26.5570906-05:00
For those stating bias I only seek to learn opinions of those around me. The information above is purely factual except maybe the "properly" but in my opinion you have to be a special kind of stupid to think that if one person has two jobs and one has none they are both "employed" is proper.
TBR says2015-07-09T11:46:15.3380157-05:00
Real unemployment is ~10%
ResponsiblyIrresponsible says2015-07-09T18:56:21.4535103-05:00
@Everyone who voted "yes," including TBR who threw out the false 10 percent number: No, it isn't misleading, nor is actual unemployment 10 percent. I made a post on this the other day. While there is something research suggesting that the U3 rate understates the amount of labor slack (for instance, it fell 20 basis points last month, but the LFPR fell 30 basis points), such as Blanchflower and Posen (2014) [http://www.Iie.Com/publications/wp/wp14-6.Pdf] and Blanchflower and Levin (2015) [http://www.Dartmouth.Edu/~blnchflr/papers/Blanchflower-Levin%20labor%20slack%2024mar2015.Pdf]. It's true that the U3 doesn't account for marginally attached and involuntarily part-time employed workers, but there are caveats. First, some of the decline in the LFPR -- i.E., people who have left the labor force -- is a result of either aging of the population, increasing returns to education, hysteresis, earlier retirement, etc. Estimates of the extent to which that fall is cyclical range from 1/4 (Aaronson et al (2014): http://www.federalreserve.gov/pubs/feds/2014/201464/201464pap.pdf] to 1/2 (Aaronson and Hu (2014): https://www.chicagofed.org/publications/chicago-fed-letter/2012/march-296] to 1/3 [Cooper and Luengo-Prado (2014): https://www.bostonfed.org/economic/current-policy-perspectives/2014/cpp1402.pdf]. Not to mention, there's even research suggesting that involuntary part-time employment is here to stay (Valletta and van der list (2015)). But Bench is also wrong: this isn't remotely political in nature. When the labor force falls, the U3 also falls. Why? Because the numerator (total unemployed) and the denominator (labor force) both by the same unit, but because the labor force is larger than the total number of unemployed, the percentage change to the numerator trumps the percentage change in the denominator, meaning the fraction itself falls. That accelerated in 2008, but note that (a) it had already been falling since the early 2000s and (b) baby boomers turned 62 in 2008. There are a number of structural factors at play, so we can't whitewash marginally attached/involuntarily part-time workers. That's ejecting politics into economics to support a political agenda, and it's fundamentally dishonest and stupid. One more point: we don't know what the natural rate of the U6 is. U3 reductions have moderated a bit. It was falling at about 0.8 percentage points a year for a while, but has only fallen about 0.1 percentage points every two months recently. The U3, however, is still falling rapidly, and is down to about 10.5 percent. However, it was 10 percent in the 1990s, so it's clearly nearing "normal" levels, and the LFPR has leveled out, anyway, with BLS estimates suggesting a longer-run trend of 61.6 percent [http://www.Bls.Gov/opub/mlr/2013/article/labor-force-projections-to-2022-the-labor-force-participation-rate-continues-to-fall.Htm]. So, please, cut the nonsense. These issues are much too complex to whitewash.
ResponsiblyIrresponsible says2015-07-09T18:57:48.3275808-05:00
And...... I guess the comment section won't accommodate paragraph breaks.
All_bs says2015-07-11T20:36:19.1150018-05:00
If anyone thinks the government tells it's citizens the truth. Well I have some land in florida for 1 dollar a lot but it's over swamp land.
sicsempertyranis says2015-07-13T13:53:15.5693803-05:00
First and foremost, I'll never understand why people blame/give credit to the president for the unemployment rate. It has very little to do with him. Secondly, there are several other very important statistics, and factors that can't be accurately measured. The first one I'll mention is Labor Participation Rate. The next 20 years will see some difficult labor participation years with the baby boomers seeing retirement. Also when young people drop out of the workforce to go back to school because there are no jobs in their current skill set, they are no longer counted in the unemployment numbers. They do however fall off of the LPR. A stat that's difficult to calculate is the under-employment factor. When a person with a Masters degree is delivering pizzas to make ends meet, they are underemployed. He or she will be not counted in the unemployment figures. So in other words, yes we are being mislead by the 5% unemployment stat, but only if you let the politicians manipulate you.

Freebase Icon   Portions of this page are reproduced from or are modifications based on work created and shared by Google and used according to terms described in the Creative Commons 3.0 Attribution License.

By using this site, you agree to our Privacy Policy and our Terms of Use.