If you believe the unemployment rate is actually approaching the eight percent claimed in recent Bureau of Labor Statistics reports then you’ve bought into one of the greatest works of American fiction. The government’s numbers game is akin to saying that if two out of five people had a job and the other three just gave up unemployment would be zero.
Each month the Labor Department reports the national unemployment rate, now approximately 8.1 percent, but only counts those actively seeking work. The reported declines are equal parts Americans going back to work and people simply giving up.
If you want to compare apples to apples, look at the workforce when Obama took office. If not for the hundreds of thousands that have given up looking for work the current unemployment rate would be 11.1 percent or a full three percentage points higher than reported by the Labor Department. The actual numbers show that hopelessness rather than hope is what President Obama has brought to the nation.
The Labor Department calculates unemployment by dividing the number of unemployed into the number of working-age Americans who either have a job or are looking for one. Let’s adjust our original example into government-speak:
One hundred people are looking for work; during the next month 90 find jobs resulting in an unemployment rate of 10 percent. The next month not a single person finds a job but two of the unemployed give up looking. Clear thinking people would say that nothing changed and the unemployment rate is still 10 percent; however in the wisdom of our government they simply ignore those that have given up and divide 98 (two now gone from the job market) by the 90 that found work a month earlier and they report the new unemployment rate as 7.22 percent. Has the unemployment situation improved? No.
The Labor Department calls this unique view the "labor force participation rate." As people give up the unemployment rate reported improves even though the only thing that has risen is frustration and hopelessness.
The labor force participation rate has been on a decline for the past decade; it was 67.3 percent when George W. Bush took office in 2001 and had slid to 65.7 percent when President Obama took office in 2009. The two percent drop over the Bush Administration is due largely the aging of our society; however the rate has drop by more than two percent during Obama’s term and can only be attributed to a shrinking job market not just a shrinking job force.
The government touted the creation of a mere 115,000 jobs between March and April of this year and an unemployment rate drop from 8.2 to 8.1 percent. The economy has to create 245,000 net jobs a month just for the unemployment to remain constant due to people entering the workforce; so how did the unemployment rate drop? Simple government math: 342,000 job seekers stopped looking for work; government slight-of-hand paints a false picture of an improving economy rather than revealing the real facts.
Want to get really depressed? If you wind the clock all the way back to when George W. Bush took office and assume the projected growth of the labor market in 2001, the current unemployment rate is 13.1 percent. Is it any wonder that people look longingly back to the Reagan Administration when more than 11 million net jobs were created?
Aparna Mathur of the American Enterprise Institute said, "We need to look beyond the official number. That is only part of the picture. It’s not purely a trending down of the people in the higher age groups. Both extremes of the workforce — older workers and college graduates — tend to exit the market during tough economic times. Those close to retirement give up after months, even years of no success. And college graduates, without the responsibility of supporting a family, can make choices like graduate school.”
GOP presidential candidate Mitt Romney said, “The reason you’re seeing the unemployment rate go down is because you have more people dropping out of the workforce than you have getting jobs.”
Surely all of this can’t be dumped onto the lap of Barack Obama; but as long he campaigns on three million plus jobs created during his administration he should live up to his pledge of transparency and admit that nearly five million people were added to the unemployment rolls during his presidency. Many of those that have left the workforce have exhausted unemployment benefits and have become so disenchanted by the president’s policies that they’ve given up hopes of finding a job while he remains in office. Net jobs lost – jobs created versus jobs lost – during the Obama Administration still exceeds two million; not a record to be proud of.