Making Sense of the U3 Unemployment Rate
I’ve heard quite a few attempts to ‘splain this and thought, what the heck, I’ll give it a shot (WARNING — MATH AHEAD):
Let just say there are a total of 1000 registered voters in the United States and 350 of them are going to vote for Barack Obama. If that were the case, Mr. Obama would have only 35% of the Citizens’ votes and certainly not enough to win re-election.
Well, that will certainly never do — he’s got more golf to play and Michelle has vacations to take yet — so let’s say, then, that Attorney General Eric Holder and the Secretary of Homeland Security Janet Napolitano round up 500 of the heretical unbelievers in “Hope and Change” and throw them in special “re-education” camps so that the total number of registered voters in the United States becomes only 500.
Ta Da! Barack Obama now has 70% of the vote and his re-election was reassured — even though he still only has the support of 350 voters.
So, too, with unemployment.
If there are a total of 150 million jobs available in the entire United States economy and 135 million Citizens have jobs, then the unemployment rate is 10% (I warned you that there was math coming up):
150 – 135 = 15
15 / 150 = .10 or 10%
But this will never do in an election year — which might explain Mr. Obama’s 35% approval rating in the polls — so Secretary of Labor Hilda Solis unilaterally declares that there is now a grand total of 147 million jobs available in the United States with still just those same 135 million Citizens actually having jobs and . . . .
Ta Da! The unemployment rate is now 8.2% (147 -135 / 147 = 0.0816326530612245 or 8.2%)
And certainly by November, Hilda will discover that — SHAZAM! – there’s only 145 million jobs in the United States, but still just only 135 million Citizens having jobs and . . . .
Ta Da! The unemployment rate is 6.9% (145 – 135 / 145 = .0689655).
You see? The economy is getting better and better all the time . . . . even though the total labor force of 135 million has not grown one iota and there are actually 5,000,000 fewer jobs in America than when Mr. Obama took office.
But wait! What if there are really 165 million Citizens who are willing, able and earnestly want to work, but cannot find a job?
Uh-Oh!
165- 135 = 30 million people unemployed who want jobs.
30 / 165 = .18181818 or 18.2% real unemployment (U6).
Nearly Two Years Ago: April 2, 2010
We’ve “turned the corner” so many times now that I’m starting to get dizzy.
Please make it stop.
