The Official U-3 Unemployment Rate Should be 11% Right Now
Posted by Michael A. Kamperman on September 1, 2009
The official U-6 unemployment rate is 16.2%. The official U-3 unemployment rate is 9.4%. After the last unemployment report I pointed out that the Bureau of Labor Statistics made an adjustment and removed approximately 1 million people from the labor force. Had this not occurred the official U-3 unemployment rate would be 10%, and not 9.4%. It turns out the statisticians have been systematically tossing Americans out of the official labor force for the last year. The civilian non-institutional population (not-in-prison) population has risen from 233,864,000 in July of 2008 to 235,870,000 in July of 2009. Yet the BLS statisticians claim those seeking employment has fallen from 156,300,000 to 154,504,000. Basically, the population of those over the age of 16 and not in prison has risen by 2 million people and magically those seeking employment has fallen by almost 2 million. The participation rate in the labor force is now calculated to be only 59.4%, down from 62.9% at the start of 2008. Are we to believe that the significant losses in the stock and bond markets over the last 18 months have caused 2 million extra people to retire due to increases in wealth? Anecdotally we know that many people that retired in the last few years have re-entered the workforce due to wealth destruction. Without this sleight of hand the official U-3 unemployment rate would be 11%, not 9.4%. Are the American people aware of this? Are members of Congress aware of this? Is President Obama aware of this? Shouldn’t this be the lead story on the ABC, CBS, CNN, FOX, and NBC nightly news shows?
If American people realized the official unemployment rate should be quoted as a minimum of 11%, then they would be demanding action. The kind of action we are not getting out of Washington. The unemployment crisis is particularly acute amongst people in their 20’s, many with college educations. This is why over 1 in 8 mortgages in America are 30 days or more past due. This is why the stress test designed to keep the ZOMBIE BANKS alive is a joke. This is why tax revenues at the federal, state, and local levels are collapsing.
Washington needs a wake-up call. Hello Washington, is anyone up their listening? It seems Washingtonians are more interested in esoteric theories like fiscal discipline, balancing the federal budget, moral hazard, no more bail-outs, healthcare reform, global warming, and positioning for the 2010 elections than they are about sitting down and solving the greatest economic crisis since the Great Depression. Where are our statesmen? Where are our leaders that care more about our people than they do about their own party and their own chances for re-election? We need massive quantitative easing. We need a “bad bank” to absorb the toxic assets and end the ZOMBIE status of most of our largest lenders. We need to open up credit for homes and autos to people with credit scores lower than arbitrary lines like 700. We need to give significant federal aid to our states. And we need a serious stimulus program for our people, such as lowering the age of eligibility for Social Security and Medicare. We need economic shock and awe Washington….WAKE-UP!
