Myth About The Unemployment Rate

[ChiTownVenture]

Every time the government reports that the unemployment rate declined during the previous month, swarms of Internet users say in forums, comment sections and emails that the only reason the jobs situation seemed to improve is because thousands of people had their unemployment insurance benefits cut off.

This is partly a paranoid conspiracy theory: The idea is that the government is trying to put a positive spin on the economy while it's actually making life harder for people who were laid off through no fault of their own.

Gary Steinberg, spokesman for the Department of Labor's Bureau of Labor Statistics, which reports the national unemployment rate on the first Friday of every month, told HuffPost that this is "the most persistent inaccuracy about the monthly unemployment rate."

In fact, the jobless rate is calculated based on survey data, not the unemployment insurance rolls. Roughly one-third of the nearly 15 million unemployed are not receiving benefits in the first place.

"Each month the Census Bureau conducts a survey of 60,000 households," Steinberg said in an email. "Each household provides labor force information on each member of the household. Everyone unemployed is counted as unemployed, no matter how long they have been unemployed. The survey does not ask about unemployment insurance benefits."

The survey does not simply ask respondents to say if the are "employed" or "unemployed," either.

"Respondents are never asked specifically if they are unemployed, nor are they given an opportunity to decide their own labor force status," according to the BLS website. "Similarly, interviewers do not decide the respondents' labor force classification. They simply ask the questions in the prescribed way and record the answers. Based on information collected in the survey and definitions programmed into the computer, individuals are then classified as employed, unemployed, or not in the labor force."

"Last week," an interviewer might ask, "did you have a job, either full or part time? Include any job from which you were temporarily absent."

Another typical question: "Have you been doing anything to find work during the last 4 weeks?"

And the interviewers aren't just phoning it in, Steinberg said. "In the first month of inclusion in the survey, respondents are typically visited in person," he said. "If their phone is disconnected, they are visited again in person."

While the connection between the unemployment rate and the number of insurance recipients may be the most persistent myth, Judy Conti, a lobbyist for the National Employment Law Project, says the idea that unemployment benefits stop people from looking for work is the most pernicious. The latter belief has been repeatedly espoused by members of Congress, even though available research doesn't really support it. Making matters worse, several members of Congress appear not to understand the basics of legislation providing additional weeks of benefits.

"I think the one thing these last couple of years have shown us is just how much people don't understand about unemployment and about unemployment insurance," Conti said. "The ignorance runs rampant."

www.huffingtonpost.com/2011/01/11/unemployment-rate-most-persistent-myth_n_806692.html

Interesting article, will this myth die now?

[Opti]

I'm not sure I believe it. I've been laid off muliple times but never been surveyed. I did get a census survey I ignored which supposedly was more about college grads.

Sampling 4/1000's of a percent and extrapolating to 15 million doesn't seem all that accurate to me.

[ChiTownVenture]

I've been laid off muliple times but never been surveyed.

What does laid off have to do with being surveyed? Have you been surveyed while employed? That is the statement that they are making, it doesn't matter if you are working or not.

Also the statement is from the people that make the report

Gary Steinberg, spokesman for the Department of Labor's Bureau of Labor Statisticss, which reports the national unemployment rate on the first Friday of every month

[ChiTownVenture]

Jan 18, 2011 11:49:47 GMT -5 Opti said:

Sampling 4/1000's of a percent and extrapolating to 15 million doesn't seem all that accurate to me.

60,000 households (every person in the household) per month, and not just by phone. How much more should they do each month to be enough?

[Savoir Faire-Demogague in NJ]

It is my understanding that vast segments of the unemployed are not counted, such as those who have given up looking for work.

[ChiTownVenture]

such as those who have given up looking for work.

If they have given up looking for work they are no longer in the work force why would they be counted?

[Deleted]

Even IF the reports resemble reality, I would love to see the welfare roll stats, and the numbers Savoir referred to that have just given up. I have put in about 30 applications in the last 2 months, and not even gotten one callback. I'm not on unemployment because I have been self-employed for 10 years and do not qualify. Who counts people like me?

[Savoir Faire-Demogague in NJ]

If they have given up looking for work they are no longer in the work force why would they be counted?

Because they are unemployed.
I don't know, I do not make the rules on how this stuff is done.
It is like the CPI. Many items the middle class routinely buy are not included(food, energy), yet those items are not included in the index.

[fairlycrazy23]

"there are lies damned lies and statistics"

[ChiTownVenture]

Because they are unemployed.

So are children and the retired, should they be counted? People who have trust funds that don't need to work, count them also?

I think the idea is how many people that want to work are out of work. That is the true number of people who can't find a job.

Who counts people like me?

The government;

The basic concepts involved in identifying the employed and unemployed are quite simple:

* People with jobs are employed.
* People who are jobless, looking for jobs, and available for work are unemployed.
* People who are neither employed nor unemployed are not in the labor force.

To summarize,

Unemployed persons are:

* All persons who did not have a job at all during the survey reference week, made at least one specific active effort to find a job during the prior 4 weeks, and were available for work (unless temporarily ill).
* All persons who were not working and were waiting to be called back to a job from which they had been laid off (they need not be looking for work to be classified as unemployed).

www.bls.gov/cps/cps_htgm.htm#unemployed

[Deleted]

Chi-- how can the gov't count me when I am not on unemployment, never got paychecks running my taxi, and am not on welfare? No one knows about me in gov't. They will know I guess next year when I do not file a tax return if I don't manage to find a job this year, but at this time I am invisible. I'm sure there are millions of people just like me, not employed, looking for work, not on unemployment or welfare, and stuck relying on the mercy of family to get by. No one knows who or where we are. my son is district manager of the newspaper distrubition center here in town. He just had to get rid of some delivery people due to decrease in circulation. Same as cab drivers-- not employees-- no one knows they are not working now.

[ChiTownVenture]

how can the gov't count me

They survey 60,000 households every month and gather data from every member in the household. UI, Welfare etc are not indicators for unemployment, they are actually asking people.

If your situation isn't utterly unique they will be able to gather that information in their sampling.

[Savoir Faire-Demogague in NJ]

So are children and the retired, should they be counted? People who have trust funds that don't need to work, count them also?

Now isn't the above reply a tad ridiculous?

[Angel!]

It is my understanding that vast segments of the unemployed are not counted, such as those who have given up looking for work.

They do count these people, they just aren't included in the official unemployment number announced in the news. The BLS produces 50+ tables of data on employment & unemployment & has even more data that you can search through. Here is one table that includes all unemployed over 16 yrs old & whether or not they want work or are looking for work:

www.bls.gov/cps/cpsaat35.pdf

Chi-- how can the gov't count me when I am not on unemployment, never got paychecks running my taxi, and am not on welfare? No one knows about me in gov't.

The govt. doesn't count each person individually. They do surveys & use statistics to come to conclusions regarding the overall workforce.

[verrip1]

Sadly, no one on this thread seems to know what U3 and U6 measure. Not surprising for the HuffPo huffers.

[deziloooooo]

Jan 18, 2011 12:06:22 GMT -5 Savoir Faire-Demogague in NJ said:

It is my understanding that vast segments of the unemployed are not counted, such as those who have given up looking for work.

That is true, their benefits have run out, I think the maximum is 99 weeks if the Federal is involved, and the states have to pay back the principal and interest if they have borrowed from the federal to cover those which I think they all have.

That's another problem for the states which was mentioned on another thread here the past week or so.

Then there are those who have basically stopped looking for work, not sure if they are talking about unemployed collecting or the other group looking but no benefits anymore.

Real unemployment today, coud be 7% or even a bit higher they suggst.{experts on the subject who say it}

I believe during height of the depression, no unemployment then, that came in later under Roosevelt I believe, unemployment was at 25%.
Lots less people, think about 100 million vs over 300 million today. Only relief was soap kitchens, charities and the such..don't know how they survived except possible more working the land, grow their own food , but if property mortgaged then faced with foreclosures...must have been hell, like today for those affected.

I am thinking that the norm of unemployment that we think as the norm, 5-6% or so will never be the norm again, possible 7/8 % might be it and another problem down the road is wages , when jobs do come back, to many at a level that will be lower then what is considered middle class, thus the continuing decrease in the middle class. $30,000 per for a family of whatever just won't cut it.

Sounds weird from some one like me when my generation , when out of college, was hoping to get to 10/15 thousand a year for a middle class level{seriously, we used to talk about that }

Ok so none of us thought we would be millioners, forget billioneers , don't think the Rockefellers were there or of so,just before the Gates and those folks.

I remember one of my Fraternity brothers, so bright, graduated as a math scholar, got a job, one of the insurence companires , hi teens as a actuary right out of school..that was just unthinkable, all of us were so p we hadn't studied at his level, LOL, he was a excellent student, hardest classes in advance mathmatics, spent hours in the library, all 4 o's in grades.

The desparity between the have's and have nots has never been greater except at the height of the depression in the "20's", this also causing the unhappiness today and frustrations.
IMHO

[ChiTownVenture]

Now isn't the above reply a tad ridiculous?

This goes along with people who have given up looking. If they are not looking or available to work should they be included? Should you include everyone?

Sadly, no one on this thread seems to know what U3 and U6 measure. Not surprising for the HuffPo huffers.

Its no secret

* U1: Percentage of labour force unemployed 15 weeks or longer.
* U2: Percentage of labour force who lost jobs or completed temporary work.
* U3: Official unemployment rate per the ILO definition occurs when people are without jobs and they have actively looked for work within the past four weeks.[2]
* U4: U3 + "discouraged workers", or those who have stopped looking for work because current economic conditions make them believe that no work is available for them.
* U5: U4 + other "marginally attached workers", or "loosely attached workers", or those who "would like" and are able to work, but have not looked for work recently.
* U6: U5 + Part time workers who want to work full time, but cannot due to economic reasons (underemployment).

What is your point?

[Angel!]

Here is an extensive explaination as to how the govt collects their data:

www.bls.gov/cps/cps_htgm.htm

The official unemployment number counts exactly what it says it counts. It counts people who are unemployed & currently seeking work, which is the official govt. definition of unemployed. You can't get upset & call conspiracy that this number doesn't include people that the govt. clearly says it doesn't include. If you want additional information then you need to look it up it the tables.

You want to know the number of people that are unemployed, but not looking for work, then look it up in the tables. www.bls.gov/web/empsit/cpseea38.pdf (This is the monthly version of the table I gave earlier.) You want to know how long the unemployed have been out of work, then look it up in the tables. www.bls.gov/web/empsit/cpseed10.pdf.

The data is all there if you aren't happy just knowing the official unemployment number that is announced each month.

[Deleted]

U-3 definition changed not that long ago. Not looked for work for four weeks added. Much gleeful reporting by the big 3 networks ABC, NBC, and CBS of "dropping" un-employment numbers. After a while there is the quiet announcement as an aside, of the change in U-3 reporting adding the four week not counted change. This irritated many people as a deception. This type of thing is one more reason that the "Evening news" will be heading the same direction as most print media is now, into bankruptcy due to lack of commercial sales.

[fairlycrazy23]

This is not a right/left issue or even just a government issue. Statistics are used all the time to prove a particular position, and the most insidious thing is when the statistics are correct but presented in a misleading way. Sometimes it is not even the original authors intent but some editor decided on a better title to an article. The reader needs to do do diligence to see "what the numbers mean", but sadly most people don't take the effort.