It seems like every day we have the latest unemployment figures given to us; as of this blog it is sitting at 8.1%. I want to give you a few things to think about that might change your opinion on the
validity of these numbers.
Before I get in to where the numbers come from I’d like for you to consider this: President Obama says he has created over four million jobs since the beginning of his presidency. There are currently 12.5 million people collecting unemployment which is 8.1% of employable workers.
If President Obama has created over four million jobs then this would equate to one million jobs a year. If you divide the new jobs he says he created by the total number of those unemployed then he should be improving the unemployment rate by 8% a year. If you reduce the 8.1% unemployment rate by 8% a year then unemployment should be dropping at least half a point a year; instead unemployment has risen every year that he’s been in office. Does this sound
strange to you?
The government comes up with their unemployment rate by dividing the number of claims by the number of people employed which is captured by the IRS. This is a little too simple because it
doesn’t take into consideration a variety of other factors. For example there are a lot of people who are employed (especially in California because of migrant workers) who are paid cash. More people are working the IRS just doesn’t know about it.
Then there are the millions of people who were on unemployment but dropped out of the system; not because they have a job but because their benefits ran out. Here’s the sneaky part; when these people drop out of the system they’re no longer considered unemployed. When I took the
number of applicants who dropped out of the system due to their benefits running out and added it back to the number of people unemployed, it ends up being a 10.8% unemployment rate. Forbes ran an article that had it at 11% so my calculation should be fairly accurate.
Extending unemployment benefits negatively affects the job figures so you’d think that some political parties would stay away from it; but at the beginning of a term it’s not a bad move. First of all it sounds great on the campaign trail. Then when in office they always have the advantage of blaming the current unemployment on the past administration. They do have to deal with it on the back-end like President Obama is now, but they’re generally optimistic about improving the situation before their re-election run. It didn’t work out this way for Obama so they’re probably wishing they didn’t play the unemployment extension card when they did.
Now you’d think Republicans would bring this matter up but they’re very careful with it because if their candidate gets into office they want to be able to play the same game as President Obama. There are only so many economic measures shared with taxpayers so they spend a lot of focus on spinning these numbers. None more so than the unemployment rate because they know most taxpayers don’t understand a lot of the other economic news.
I wrote this blog so everyone would know the figures we’re constantly getting from news organizations aren’t accurate. For them to report that Obama has created four million jobs and at the same time talk about an 8.1% unemployment rate isn’t at all logical. I’m not sure if they think for themselves anymore; they just take information off of the AP wire and run with it without due diligence.
I also wrote a piece about President Obama’s claim of the millions of Green Jobs he’s created and I very easily debunked what he said; it’s actually quite blatantly shocking. Fortunately his claim is being reviewed by a Congressional Committee because the report seemed so unrealistic. I saw their hearing with the head of the Department of Labor and believe me it doesn’t look good for
Obama.
But how many Americans are going to know the findings of the committee? President Obama can say what he wants on the campaign trail knowing that voters will never end up hearing the truth. I can’t blame him it’s just politics as usual. Just more Americans being misled (in the private sector we refer to this as lying). Games like this would be considered fraud in the business world but politicians play by different rules than the rest of us.
validity of these numbers.
Before I get in to where the numbers come from I’d like for you to consider this: President Obama says he has created over four million jobs since the beginning of his presidency. There are currently 12.5 million people collecting unemployment which is 8.1% of employable workers.
If President Obama has created over four million jobs then this would equate to one million jobs a year. If you divide the new jobs he says he created by the total number of those unemployed then he should be improving the unemployment rate by 8% a year. If you reduce the 8.1% unemployment rate by 8% a year then unemployment should be dropping at least half a point a year; instead unemployment has risen every year that he’s been in office. Does this sound
strange to you?
The government comes up with their unemployment rate by dividing the number of claims by the number of people employed which is captured by the IRS. This is a little too simple because it
doesn’t take into consideration a variety of other factors. For example there are a lot of people who are employed (especially in California because of migrant workers) who are paid cash. More people are working the IRS just doesn’t know about it.
Then there are the millions of people who were on unemployment but dropped out of the system; not because they have a job but because their benefits ran out. Here’s the sneaky part; when these people drop out of the system they’re no longer considered unemployed. When I took the
number of applicants who dropped out of the system due to their benefits running out and added it back to the number of people unemployed, it ends up being a 10.8% unemployment rate. Forbes ran an article that had it at 11% so my calculation should be fairly accurate.
Extending unemployment benefits negatively affects the job figures so you’d think that some political parties would stay away from it; but at the beginning of a term it’s not a bad move. First of all it sounds great on the campaign trail. Then when in office they always have the advantage of blaming the current unemployment on the past administration. They do have to deal with it on the back-end like President Obama is now, but they’re generally optimistic about improving the situation before their re-election run. It didn’t work out this way for Obama so they’re probably wishing they didn’t play the unemployment extension card when they did.
Now you’d think Republicans would bring this matter up but they’re very careful with it because if their candidate gets into office they want to be able to play the same game as President Obama. There are only so many economic measures shared with taxpayers so they spend a lot of focus on spinning these numbers. None more so than the unemployment rate because they know most taxpayers don’t understand a lot of the other economic news.
I wrote this blog so everyone would know the figures we’re constantly getting from news organizations aren’t accurate. For them to report that Obama has created four million jobs and at the same time talk about an 8.1% unemployment rate isn’t at all logical. I’m not sure if they think for themselves anymore; they just take information off of the AP wire and run with it without due diligence.
I also wrote a piece about President Obama’s claim of the millions of Green Jobs he’s created and I very easily debunked what he said; it’s actually quite blatantly shocking. Fortunately his claim is being reviewed by a Congressional Committee because the report seemed so unrealistic. I saw their hearing with the head of the Department of Labor and believe me it doesn’t look good for
Obama.
But how many Americans are going to know the findings of the committee? President Obama can say what he wants on the campaign trail knowing that voters will never end up hearing the truth. I can’t blame him it’s just politics as usual. Just more Americans being misled (in the private sector we refer to this as lying). Games like this would be considered fraud in the business world but politicians play by different rules than the rest of us.
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