Researchers: Unemployment Rate Higher than Reported

The media just can't seem to understand why Americans won't join them in celebrating the Obama economy. There are two reasons for this disconnect. The first is that Washington DC is a booming Emerald City. Thanks to government largesse using money stolen from taxpayers, the skies are filled with construction cranes and the money flows like wine. The second reason is that unemployment numbers are pure BS; we all know it and so too does science:

This problem dates back to a 1994 redesign of the survey when it went from paper-based to computer-based, although neither the researchers nor anyone else has been able to offer a reason for why the redesign has affected the numbers.

What the researchers found was that, for whatever reason, unemployed workers, who are surveyed multiple times are most likely to respond to the survey when they are first given it and ignore the survey later on.

The report notes, "It is possible that unemployed respondents who have already been interviewed are more likely to change their responses to the labor force question, for example, if they want to minimize the length of the interview (now that they know the interview questions) or because they don't want to admit that they are still unemployed."

This ends up inaccurately weighting the later responses and skewing the unemployment rate downward. It also seems to have increased the number of people who once would have been designated as officially unemployed but today are labeled as out of the labor force, which means they are neither working nor looking for work.

The thing to keep in mind, though, is that since 1994, the Great Recession of 2008 was the first serious downturn in the economy since the survey was changed. By '94, the recession President Clinton ran against was over even before he took office. The recession President George W. Bush inherited from Clinton in 2001 was shallow and short. Therefore, this change in how the study is done is really being felt now for the first time.

While the media celebrates a low unemployment number and job creation that barely keeps up with the increase in population, the labor participation rate remains at decade lows.

 

 

Follow  John Nolte on Twitter @NolteNC               


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