The Real August Unemployment Rate

The August unemployment rate has been announced as being up from the July rate of 9.4% to 9.7%. As I noted in a post on 31 August 2009, this is far from the real unemployment rate. When the unemployment rate gets high and has been high for some time, people start falling out of the pool of the unemployed that gets counted, since they are not going to the unemployment bureaus to qualify for unemployment checks after their unemployment benefit runs out. So, in August the nonfarm payroll employment decreased by 216,000 and the number of unemployed increased by 466,000 to 14.9 million. This means that 250,000 new jobs would have had to be created for the unemployment rate to remain unchanged.

There are also 2.3 million who are said to be marginally attached to the work force and appear likely to want jobs, but there is no record that they are looking for jobs. This number is reported as being the same as it was in July, but 630,000 higher than a year ago. Adding these unemployed to the 14.9 million unemployed, gives us a real unemployment figure of 11.2%! This compares to the real unemployment rate in July of 10.9%.

There are also 9.1 million who are working part time, but want full-time employment. Adding them in gives us a 17.1% underemployment number in August.

Obama and the Democrat Congress claimed the unemployment rate would stay below 8% if they were allowed to pass the Stimulus Bill. We find repeated claims that the Stimulus Bill is working, as in today's Washington Post on the front page. Very little of the stimulus money has been spent, most of the money spent has been spent in unproductive ways, and the debt it has created and is going to create has scared the wits out of employers and consumers, who are saving more money for the rainy days ahead. And ... the real rate of unemployment is 11.2% and the rate of combined unemployment and underemployment is 17.1%. These are numbers similar to those of much of the Great Depression, though the worst numbers in the Great Depression were higher. But, it appears that the numbers in the current economic downturn are going to increase more in the near future.

Obama and the Democrat Congress are always boasting about their ability to create jobs. They have shown that they are only effective in destroying jobs. But, given their lack of economic and business understanding, this is no surprise to anyone who does know anything at all about economics and business. Why do we elect such wrongheaded fools to the Congress and the presidency? I suppose it is because the People are educated in the public schools and never learned economics and business basics either. Our schools are biased against the knowledge needed to live in the real world, which is the private sector. Instead, they are advocates of the public sector, as totally immoral and impractical as it is!

But Obama wants to talk to our schoolchildren and exhort them to more public service. This is service in the cause of governmentally exercised force, whose purpose is to make people do what they will not volunteer to do. What we need them to do is to choose to become business owners and employers. As such, they will produce the goods and services that people actually volunteer to pay for and they will create the jobs that Americans need.