About Me

In writing the "About Me" portion of this blog I thought about the purpose of the blog - namely, preventing the growth of Socialism & stopping the Death Of Democracy in the American Republic & returning her to the "liberty to abundance" stage of our history. One word descriptions of people's philosophies or purposes are quite often inadequate. I feel that I am "liberal" meaning that I am broad minded, independent, generous, hospitable, & magnanimous. Under these terms "liberal" is a perfectly good word that has been corrupted over the years to mean the person is a left-winger or as Mark Levin more accurately wrote in his book "Liberty & Tyranny" a "statist" - someone looking for government or state control of society. I am certainly not that & have dedicated the blog to fighting this. I believe that I find what I am when I consider whether or not I am a "conservative" & specifically when I ask what is it that I am trying to conserve? It is the libertarian principles that America was founded upon & originally followed. That is the Return To Excellence that this blog is named for & is all about.

Sunday, January 11, 2015

December Unemployment Report Masks The Misery Of U.S. Job Market

"If you've got a part-time job & still can't find full-time work – or if you've just given up because you can't find a good job to replace the one you had – you are counted as part of the drop in unemployment."  MA Senator Elizabeth Warren speaking @ the AFL-CIO National Summit on Raising Wages this past Wednesday.
click on graph to enlarge
Until the past six years, coinciding within BO's presidency, the headline unemployment figure known as U-3 would suffice to give an accurate enough portrayal of the health of the U.S. job market.  When this number went up things were not good & when it went down good paying jobs were becoming more plentiful – but not any longer.
But the last several years you could not rely on this one number each month to verify that your own job seeking experience was in line with the general trend presented by the Department of Labor reports.  Instead, if you wanted answers as to why you or your friends, family, or neighbors were not participating in the seemingly improving unemployment picture, you had to analyze the Bureau of Labor Statistics (BLS) tables. 
For instance in these tables you would find that part-time workers were counted as employed if they worked as little as one hour a week thereby bringing the U-3 unemployment rate down.  This is inline with Elizabeth Warren's point above – i.e., a drop in U-3 can come about because people can't find a job & have dropped out of the labor market.
Now over the years enough posts have been written on RTE illustrating the above type points so that subscribers to RTE were not fooled last Friday when it was reported that U-3 fell from 5.8% in November to 5.6% in December. 
In December there were 252,000 jobs created (240 K in the private sector & 12 K in the public sector) but what were the quality of those jobs?  Hourly wages in the private sector actually dropped 5 cents in December from November & the labor force decreased by 273,000. 
Commentary taken directly from the BLS report for December - the number of long-term unemployed was unchanged @ 2.8 million – 31.9% of the unemployed; the civilian labor force participation rate edged down by 0.2 percentage point to 62.7 percent; the employment-population ratio was 59.2 percent for the third consecutive month; the number of persons employed part time for economic reasons (also referred to as involuntary part-time workers) was little changed in December at 6.8 million; 2.3 million persons were marginally attached to the labor force, little changed from a year earlier.
To understand the impact of the decline of the civilian labor force participation rate (LFPR) please look @ the graph below.  The LFPR in December, 2007 (when the recession began) was 66.0%.  If 66.0% of the civilian noninstitutional working age population were working or looking for work today, we'd have a labor force of 164.4 million workers, which is 8.3 million more than our actual labor force of 156.1 million.  Do your own arithmetic to determine how long it will take for the country to return to a pre-recession LFPR of 66.0% if job growth is 252,000 per month & the civilian noninstitutional working age population increases 183,000 per month like both did in December.
click on graph to enlarge
But of course there is more - nearly a third of people aged 22 to 26 with a Bachelor of Arts degree either don't have a job or are working @ one that doesn't require a university degree.  The numbers are similar for young people with vocational degrees – source WSJ January 8, 2015.
In 1992, 100 workers supported 92 nonworkers – mainly the young, the elderly, & those with disabilities.  By 2012, 100 workers were supporting 102 nonworkers, a number that is projected to rise to 107 by 2022.  Source William Galston of the Brookings Institute.
Accordingly more & more people continue to rely on rotten part-time jobs, going on a government program or two to receive benefits, moving in with friends or family to save money, & spending down whatever wealth they can lay their hands on.  The flow into the productive wealth creating labor force continues to decline – all per BO's destructive purposeful design.
It has been hard to find a truly accurate measure of the jobs condition in America since BO came into office – we just know it is terrible.  U-6 – still 11.2% in December - includes the total unemployed (U-3), plus all persons marginally attached to the labor force including discouraged workers who have stopped looking for work, plus the millions working part time who want full time employment.  I have recommended a U-7 category.  My proposed U-7 would include all of U-6 plus those employed full time who make a fraction of their former pay.  U-6 & U-7 give the most complete picture of those relying on their wealth spend down to live on, whether that of friends or family, which is an excellent measure of the unhealthiness & misery of today's job market.


  1. I have always found it amazing how the government lopes off the so called" too discouraged to work" from unemployment figures. A prime example of why stats can be very misleading.

    And how exactly does the government arrive at the assumption that someone is "too discouraged...."?

    1. Discouraged workers are persons not currently looking for work because they believe no jobs are available for them. These individuals were not in the labor force, wanted and were available for work, and had looked for a job sometime in the prior 12 months. They were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey.

      Footnote 2 from Table A – 16:

      Includes those who did not actively look for work in the prior 4 weeks for reasons such as thinks no work available, could not find work, lacks schooling or training, employer thinks too young or old, and other types of discrimination.

  2. Doug - as always, great analysis. The labor participation rate is a very significant stat. Another is the inflation adjusted median income per worker. Both have been trending down. However, this may be what the Elite left desires as both of these stats relate to a growing dependence on Government entitlements, hence greater control by the Elite Left over the citizenry.

    We need a policy shift. We need for policy makers to encourage private entrepreneurs to take risks to create new products and industries that will create higher incomes that sustain the job creation long term and create ancillary jobs. One can start with eliminating the numerous regulations and outdated tax system that discourage the above. Pass the Fair Tax and watch many of the poor improve their job skills when they learn they can keep more of their pay check. At the same time the zero federal corporate tax will embolden domestic and foreign entrepreneurs to invest in the US. This is a win-win for the job creators and the more motivated work force. Contact your representative and demand these policy shifts now!