Submitted by: Donald Hank
DAVID
STOCKMAN SAYS UNEMPLOYMENT IS REALLY 42.9
The
government reports today that unemployment is officially at 5.3 percent in May,
down from 6.1 percent in May of last year, according to the Bureau of Labor Statistics, an agency of the U.S.
Department of Labor. Former Reagan administration Budget Director, David
Stockman, says the real unemployment rate in the United States is now about 42.9 percent. Could
our real unemployment rate really be that high?
First
we need to look at how unemployment is measured and reported. The Bureau of
Labor Statistics reports a few different measures of unemployment, including
the “U3” unemployment rate that is typically reported by most media outlets as
the “official” measure of the rate of unemployment. This measure essentially
counts those who are employed and those officially registered as unemployed and
actively seeking work to determine the unemployment rate. The U3 rate was
reported today at 5.3 percent.
What
is called the “U6” unemployment rate, that includes many of those who have
stopped looking for work, which leads to a high calculated unemployment rate,
is reported today by the Bureau of Labor Statistics to be at 10.4 percent.
The
long-term unemployment rate, the Wall Street Journal reported last month, remains at
2.4 million, that is, there are 2.4 million citizens who have been unemployed
for 27 weeks or more. These numbers were also based on a report from the Bureau of Labor Statistics.
“The
U-3 unemployment rate as a proxy for full employment does not even make it as
primitive grade school economics,” David Stockman writes
about the official unemployment rate.
Stockman
cites the number of 210 million adult Americans, who if they worked 2,000 hours
per year, or about 40 hours per week, would deliver 420 million labor hours per
year. When compared to the 240 million labor hours per year reported by the
Bureau of Labor Statistics, the total workforce of the country is delivering
57.1 percent of those 420 million labor hours, and otherwise stated, 42.9
percent of those hours are not being delivered. Therefore, the calculation of
unemployment by this measure is 42.9 percent.
When
the number of Americans currently not working, which is reported at 93 million,
is compared to that same workforce calculation of 210 million, that calculation
of 93 million as a percentage of the 210 million suggests the unemployment rate
is 44.29 percent. That calculation is very close to David Stockman’s estimate
of the unemployment rate.
Republican
presidential candidate Donald Trump also claims unemployment is much higher
than the officially reported government numbers, the Inquisitr reports. Trump says
unemployment right now is close to 18 percent. Trump has said on many occasions
in the past that the Bureau of Labor statistics on unemployment are not
accurate, and that the real unemployment rate is substantially higher.
The
web site Politi Fact takes a look at Trump’s claim that
unemployment is about 18 percent and concludes the claim is false, simply by
comparing Trump’s claim with the officially reported (U3 and U6) numbers
reported by the Bureau of Labor Statistics. Based on that comparison alone,
without looking at any of the reasons for Trump’s claim, Politi Fact concludes that Trump’s claim is false.
David
Stockman’s analysis not only cast doubts on the claim that Donald Trump’s
unemployment numbers are false, it might also suggest that Trump’s claim of 18
percent might be quite conservative an estimate of the current rate of
unemployment in the United States. Either way, 93 million unemployment in a
country of about 210 million adults who
are able to work, is an extremely high number, using the numbers reported by
the Bureau of Labor Statistics.
[Photo
of David Stockman from Getty Images.]
Read more at http://www.inquisitr.com/
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