Tonawanda News

Bob Confer

August 17, 2010

CONFER: The real unemployment rate

— — The July jobs report recently issued by the labor department noted that total employment was down by 131,000 jobs for the month. Despite the significant drop in employment, the unemployment rate stayed at 9.5 percent.

That illogical statistical anomaly is attributed to the labor department’s current means of recordkeeping, which discounts so-called discouraged workers. A discouraged worker is someone who has given up looking for work, at least for the time being, because of a lack of prospects. Despite those workers being willing and able to work, government economists do not account for them in the general unemployment statistic, making the dangerous assumption that they have dropped out of the workforce entirely. If they were taken into consideration they would add 1.2 million to the ranks of the unemployed.

The generally accepted unemployment rate also excludes another group of what the labor department considers marginally attached to the workforce. Currently, there are another 1.4 million able-bodied and un-retired Americans who had worked at one time yet have not looked for work for a variety of reasons that, according to the department, supposedly include scholastic and family responsibilities. Basically, the government considers them disinterested in the workforce.

Accounting for both sets of marginally attached workers there are 2.6 million people who are left out of economic concern. Were their numbers to be added to the general population of job seekers, as they should, total unemployment would rise to 17.2 million, pushing the rate to 11.1 percent.

The undercalculation does not end there. A good many non-government economists and those who take an active role in the analysis of private sector trends (financiers, entrepreneurs, business managers and the like) believe that those who are underemployed should be accounted for. An underemployed individual is someone who, due to economic conditions, is working part-time at was once a full-time job or, in some cases, is working at a job that’s a considerable step down in terms of income and/or responsibilities than what was once had as a means to hold him or her until a better job can be found.

There were 8.8 million Americans who fit this bill in July.

Add the underemployed to the unemployed and the total workforce available or active that is not meeting its full potential is 26 million. The resultant underemployment/unemployment rate is a frightening 17 percent.

That number, although still likely underreported due to the labor department’s suspect methods of data collection, is closer to what businesses and families are feeling as they try to make ends meet. It’s painful enough having what the government says is “only” 9.5 percent of the workforce unable to actively participate in the marketplace through the production and delivery of goods and services, the exchange of wages and the application of those wages to the economy. But, it has seemed throughout the entire recession that the job losses and lack of job growth were even worse off than what was advertised.

It has been, based upon the extended analysis of what should constitute labor statistics. Having 26 million Americans (and their families) either possessing very little discretionary income or none at all is a real downer on the further development of the private sector and, as some would argue, the public sector as well (through lower tax revenues).

The federal government knows that the job market’s health is more hazardous than it lets on. Yet, it openly manipulates the data in its message to the masses to paint a prettier picture. This deliberate act isn’t something new and is entirely political in nature, a means of saving face for: one, the unconstitutionally oversized and unaccountable executive branch and its myriad agencies and departments that infringe on the free markets, and; two, the elected officials who choose to inappropriately meddle in economic affairs through the creation and application of legislation that inhibits capitalism. They know full well that everything they do constricts employment growth more than any private-sector issue ever could. They don’t want it known that this century’s gimmicks in federal and global governance (like altruistic real estate financing, Medicare expansion, two unconstitutional wars, bailouts, financial reform, the green movement and Obamacare, to name a few) have created — and will maintain — a double-digit unemployment rate.

Bob Confer is a Gasport resident and vice president of Confer Plastics Inc. in North Tonawanda. E-mail him at bobconfer@juno.com.

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Bob Confer
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