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The Bureau of Labor Statistics (BLS) Unemployment Rates: Hiding the Numbers and the Hurt?

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Written by Leonard   
Sunday, 26 July 2020 10:51

I recently read that the US unemployment rate is currently varying between 11-14 %.  The calculation of the unemployment rate seems to have nothing to do with the number of people who need work or qualify for “unemployment insurance.”  The general definition of the unemployment rate is “Unemployment Rate (UR) is the percentage of unemployed individuals in the economy among all the individuals currently in the labor force."  It is calculated as Number of Unemployed Individuals/Total Labor Force × 100% [1], where unemployed individuals are those who are currently not working but are actively seeking work.  It seems fairly simple but some confusion is caused by the computation of the “unemployed individuals.”  Two common BLS definitions are designated as U-3 and U-6 [2]:

o   U-3:  A person is counted as unemployed if he or she does not have a full-time, part-time, or temporary job, is actively looking for a job, and is currently available to be hired.

o   U-6:  Not only those who are unemployed by the U-3 definition but also those who want a full-time job but can find only an unsatisfactory part-time job (a much larger number).

o   The total labor force is calculated as the sum of all people age 16 and older who are classified as either employed or unemployed, but just the number of people who are either working or actively looking for work.[1]

o   The BLS reports that the size of the US labor force in 2020 is ~158,000,000 people.

The current BLS report of the U-3 Unemployment Rate (UR) is ~13%. Some argue that U-6 yields a more accurate estimate at about 18-20%. The BLS also reports that the number of people filing for unemployment in July 2020 increased to 52,000,000 people [3]. There seems to be a problem with both the U-3 and U-6 rates.  Given that the 52 million people are looking for employment and have at most part-time work with an inadequate income, it seems the real unemployment rate is 52M/158M X 100% or 32%.  In other words, about 1/3 of the total US labor force is out of work.  We might feel more comfortable saying the unemployment rate is only 11%. That allows the Trump administration to Trumpet & Tweet as though we are not in terrible shape, but the calculation also hides how many and how much American families are suffering. Nearly a third of the workforce, and in addition their dependents, may not have an income this month to cover their usual food and shelter expenses and now increasing healthcare costs due to loss of insurance and expenses due to the Covid-19 pandemic.

To make things worse, while Trump golfs again and McConnell vacations, there apparently may not be an extension of the unemployment insurance Covid-19 “$600 weekly extra payments,” which are ending within a week because of disagreements inside the Republican Party and the WH.  Many believe this will bring on evictions, mortgage payment failures, widespread hunger and serious untreated healthcare problems across the entire United States.   All this because Trump ignored the huge, expert USA medical and scientific assets at his disposal in January through March, 2020, he shut down a special pandemic WH task-force, ignored ongoing, successful global responses to the virus and chose instead to follow White House backroom “alternate facts”  and Fox News false conspiracy theories. His choices of actions are all based on his re-election strategy, and not the protection of the American people. This has also led to an enormous increase in the number of American’s coming down with the virus, long-term serious illnesses and many more unnecessary deaths.

How many more deaths should we tolerate before the State Governments must react, exercise their constitutional rights and find ways to protect their residents from the demonstrated incompetence and criminal behavior of the Trump administration and its corrupt leader. Their actions should allow the Governors to hold back tax payments to the Federal Government in order to cover the costs of protecting their own State's population.  In fact, Trump has already authorized the Governors to act on his behalf and they should assume with Federal Funds:  "And I will then be authorizing each individual governor of each individual state to implement a reopening, a very powerful reopening plan of their state at a time and in a manner as most appropriate." [4]


[1] https://www.britannica.com/topic/unemployment-rate

[2] https://www.britannica.com/story/how-is-the-us-unemployment-rate-calculated#:~:text=In%20general%2C%20the%20unemployment%20rate,multiplying%20that%20figure%20by%20100

[3] https://www.cnn.com/videos/business/2020/07/23/jobless-claims-unemployment-benefits-coronavirus.cnnbusiness/video/playlists/business-coronavirus/

[4] https://www.axios.com/trump-says-he-will-be-authorizing-governors-to-reopen-states-48763d92-537a-4cef-b241-6f5124be8ea3.html

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