Fudging the Job Numbers

Member Group : Jerry Shenk

President Barack Obama has launched his Fifth Annual Summer of Recovery.
A recent administration jobs report trumpeted that the United States economy has reached a level of "payroll employment" equal to "pre-recession levels."
Celebrate, America!

But, then, relax, reflect and understand that the administration’s thrilling jobs "news" means only that, after five-plus years of Obamanomics, the number of jobs at which Americans are working is about equal to the number of jobs which existed in January, 2008, that more of the jobs are lower-paying and that the American population and the size of the available work force have grown since then.

Each month, the Labor Department releases six different unemployment numbers — "U-1" through "U-6," ranging from the narrowest definition of unemployment to the broadest.

Labor uses the U-3 figure as the "official" number appearing in media reports.
The official definition of U-3 is "total unemployed, as a percent of the civilian labor force" — unemployed people still actively looking for work. The May U-3 remained "stable" at 6.3 percent.

Using broader methodologies, U-4 and U-5 count people who are out of work but have given up looking. Those numbers stand at 6.7 and 7.6 percent.

U-6 includes the under-employed — people able to find only part-time work or lesser jobs outside their fields. In May, the Labor Department pegged the U-6 at 12.2 percent — the most accurate reflection of the job market and economy.
Official adoption of the U-3 isn’t surprising. Fudging the denominator is an old political trick.

A more important measure of employment is the total number of jobs available relative to America’s working-age population.

Sen. Bernie Sanders (I-VT) favors using the U-6 — 12.2 percent. Rep. Duncan Hunter (R-CA) has submitted "The Real Unemployment Calculation Act," to designate U-5 as the official metric.

According to the Bureau of Labor Statistics, the average workweek in the U.S., a key statistic for understanding the labor market, remains low, about 34.5 hours. That number, coupled with mediocre job creation, contributes to the jobs malaise. A 1/10th of an hour decline in the average workweek is like losing 340,000 jobs.

In the slowest economic recovery since WWII, it has taken Obama’s total job numbers two and a half years longer to recover to pre-recession levels than it did to recover from the slump caused by the1999-2000 dot.com bubble collapse — and nearly five years longer than the jobs recovery from President Jimmy Carter’s recession.

Job and overall recovery is being suppressed by potential employers’ uncertainties related to the economy, to Obamacare, the pro-union bias of the National Labor Relations Board and by more generous means-tested policies introduced or expanded during the recession, including extended unemployment benefits, SNAP and reducing the mortgage debt of lower income families, among other factors. Government policies reduced employment by increasing incentives to remain unemployed or to exit the labor force.

In three years we will have a new president, and one hopes, new, more job-friendly economic policies that create both jobs and incentives to work rather than to stay out of the labor market.

http://www.ldnews.com/opinion/ci_26023041/fudging-numbers-u-s-job-market