Wednesday, June 24, 2015

The "Real" Unemployment Rate

No doubt you have heard from Faux News and your redneck uncle that Obama's 5.5% unemployment rate isn't the "real" unemployment rate because Obama came up with a way to cook the books so he can give black people more welfare...Or something to that degree. They contend that the "real" unemployment rate, including those who have been unemployed for over a year and have stopped looking for work or are unemployable, is more like 10.8%.

There is a small amount of truth to that. However, Obama hasn't changed anything that would affect the way we calculate unemployment. Unemployment today is measured and reported exactly as it was through ALL of the Bush Presidency and most of Clinton's term. Of course, when President Howdy Doody, the President of all things White, was in office, they weren't at all concerned about the "real" unemployment rate and were happy using what was reported at the time and if unemployment was rising under Obama, they would be happy to report those numbers as well. But, since unemployment has been free falling for most of Obama's term, even dipping below what Rmoney said he would bring us as President, they have to find a way to poo poo the numbers any way they can, thus the need for  the "real" unemployment number...Which by the way, will never be discussed again if we get a Republican President as they won't want to talk about "real" unemployment at that time.

But here, as usual, is where their logic backfires. Yes, it's true that the longterm/unemployable is no longer counted in the reported unemployment numbers. But, it's also true that as unemployment goes down, more people from the long term unemployed start entering the work force. Not only that, in 2014 Obama set aside grants and programs to get the long term unemployed back into the work force; contrary to popular belief, his goal was not to just get as many people on welfare as possible to somehow secure the "welfare vote" for his next election...Wait, right, none of that makes sense...Welfare people are not likely to vote and Obama has no more elections to win so there is no reason he would do such a thing. But if we were to use the Republican's metric of including the long term unemployed with the reported unemployment rate, using then Obama has actually reduced unemployment MORE than he did using the current metric used by Bush and Clinton.

If the unemployment rate is now 5.6%  but the "real" unemployment rate including the long term unemployed is 10.8% then we have to go back to the "real", long term unemployment rate when Obama took office, which was 17% as opposed to Bush's reported unemployment rate of 7.8%. Either way, Obama has reduced unemployment under both metrics. Using the current metric, unemployment has decreased 29% under Obama, but using the Republicans "Real" unemployment metric including the long term unemployed, Obama has reduced that number by 36%!

So the next time a Republican says 5.6% isn't the "real" unemployment rate, ask them what the "real" rate is and then inform them that the "real" rate under Bush was 17% when he left office and that by using their metric, Obama has improved unemployment even more so than by using his own metric, which again, is the same exact metric used by Bush and Clinton.

No comments: