Unemployment figures are so misleading

I have issues with unemployment figures. These days we hear about unemployment almost every day, but we don’t hear much about how those figures are compiled. And that’s a real shame because those figures, currently so depressing, can be extremely misleading.

As I recall, the latest number being thrown around is something in the range of 10%. If that’s the overall national average, then “average” is the operative word and Americans must remember that. The unemployment rate in your state, in your city, may be much better or much worse than the national average.

CNN reported on the air several weeks ago that the unemployment rate was closer to 15% among the uneducated and 5% among the educated. I don’t recall if  they defined “educated” as being a high school graduate or a college graduate, but either way, the message was very clear. What’s sad is that those who most need to understand the message are usually too young and preoccupied to take it to heart.

Unemployment figures are based on the number of people who have filed for and are collecting unemployment. In my personal experience, I know that’s not going to produce accurate figures. Most people, when they lose a job, immediately start looking for another one. Because they’re busy job hunting, hoping the next job is right around the corner, they may not apply immediately for unemployment. Depending on their personal resources, they may go many months without applying. They are definitely unemployed, but unless and until they apply for benefits, they won’t get counted as such.

Then there are those who exhaust their unemployment benefits after months of unsuccessful job hunting. Once they stop receiving benefits, they stop being counted as unemployed, even though they still are. There’s simply no way to track them if they’re no longer on the unemployment rolls.

And there are those who accept a job far below the pay level and education requirements of their previous job. They’ll be taken off the unemployment rolls, if they were ever on them, but they are so seriously underemployed they are continuing to look for a better job and in reality are still in the job market.

There are “seasonal adjustments” to contend with, too. Farm workers may only have jobs during the growing season. Outdoor construction workers may not work during the winter. Sales clerks may be part of a temp force hired just for the Christmas shopping season. How and when do you count these people?

The government, and in lockstep, the media, should stop making such a big deal of national unemployment figures. More often than not, the numbers are inaccurate, misleading, and irrelevant. (But if you want it straight from the horse’s mouth, check with the Bureau of Labor Statistics.) If you have a decent job, you don’t really care. If you don’t have a job, you don’t need or want to hear it — unless you’re hoping to move to a place with more job opportunities.

The only purpose served is being able to compare this year’s inaccurate, misleading, irrelevant number to the same inaccurate, misleading, irrelevant number of a year ago, or five or ten years ago. Games statisticians play. Don’t inflict them on the rest of us.



Categories: Money

Tags:

2 replies

  1. Spot On! My guess is the real unemployment is closer to 17%, with two troubling stats, 1) it’s not going down.. it’s holding steady leading me to fear we’re going to have a jobless “recovery” although it’s hard to call it a recover when we’re all still looking for work or struggling to hang on to the jobs we have 2) Cutting expenses by offshoreing and outsourcing continues to make balance sheets look good and indicate we’re “doing better” which will cause us to not really do things we need to do to fix this mess we’re in.
    __________
    “Jobless recovery” is such a cruel oxymoron. For those without jobs, there’s no such thing as a recovery. And don’t get me started on offshoring, outsourcing, and the global economy. Shipping American jobs overseas while Americans remain unemployed is not doing America any good, and cavalierly telling the unemployed to “just retrain and take up another line of work” when they’re broke and unemployed is unworkable on many levels. It’s akin to saying “I’ve got mine; screw you.” Notice it’s always said by bosses, business owners, and theorists who are securely employed. I wonder how they expect unemployed Americans to buy all their foreign-manufactured products?

  2. Unemployment rates are comparative statistics. Their main purpose isn’t to provide exact numbers. They allow us to compare the current economic condition with those of the past. Since the calculations are done using the same formula, any comparison would still be valid even if the numbers are inaccurate.
    __________
    You and I understand that. But it sure doesn’t get reported that way. And when pundits start raving about unemployment numbers, I often think they don’t really understand either.

"It were not best that we should all think alike; it is difference of opinion that makes horse races." ~ Mark Twain

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out / Change )

Twitter picture

You are commenting using your Twitter account. Log Out / Change )

Facebook photo

You are commenting using your Facebook account. Log Out / Change )

Google+ photo

You are commenting using your Google+ account. Log Out / Change )

Connecting to %s

Follow

Get every new post delivered to your Inbox.

Join 4,235 other followers

%d bloggers like this: