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Passions in Poetry

The Unemployment Rate

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Huan Yi
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0 posted 02-06-2012 02:04 PM       View Profile for Huan Yi   Email Huan Yi   Edit/Delete Message      Find Poems  View IP for Huan Yi

.


“The unemployment rate, derived from a separate survey of households, was forecast to hold at 9 percent. The decrease in the jobless rate reflected a 278,000 gain in employment at the same time 315,000 Americans left the labor force.

“You’d like to see the unemployment rate coming down when people are coming into the job market, not disappearing,” James Glassman, senior economist at JP Morgan Chase & Co. in New York, said in a radio interview on “Bloomberg Surveillance” with Tom Keene.

President Barack Obama said the drop in the jobless rate is a sign the recovery is getting stronger, and extending a cut in the payroll tax will provide more fuel for the economy. “

http://www.bloomberg.com/news/2011-12-02/u-s-jobless-rate-unexpectedly-declines-to-8-6-payrolls-rise-by-120-000.html


A continuing trend . . .
How is people getting out or giving up a sign the recovery is getting stronger?


.

Balladeer
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1 posted 02-07-2012 08:42 AM       View Profile for Balladeer   Email Balladeer   Edit/Delete Message      Find Poems   Click to visit Balladeer's Home Page   View IP for Balladeer

Obama will make the figures say whatever he wants them to say, John. You know that. He thinks the American people are too stupid to know the difference....and maybe they are.

Right now, he's just trying to wiggle out of his "If the economy is not better after three years, I don't deserve a second term" comment.
Grinch
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2 posted 02-12-2012 08:38 AM       View Profile for Grinch   Email Grinch   Edit/Delete Message      Find Poems  View IP for Grinch


quote:
Obama will make the figures say whatever he wants them to say, John.


That's true, up to a point, the unemployment figures, like most statistics, are generally presented in the most favourable light to prove whatever point the presenter is trying to make. This administration is no different from any of the previous administrations in that regard, they all present the best view they can manage and to do that they all use the same tricks.

Ironically, that evens out the playing field - none of the figures are a real reflection of the situation but they're all equally wrong. That means that as a baseline measure even the inaccurate figures are a good indicator of the underlying trends.

.
Balladeer
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3 posted 02-12-2012 10:11 AM       View Profile for Balladeer   Email Balladeer   Edit/Delete Message      Find Poems   Click to visit Balladeer's Home Page   View IP for Balladeer

Two wrongs make an ok? I'll pass on that logic..
Balladeer
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4 posted 02-12-2012 10:16 AM       View Profile for Balladeer   Email Balladeer   Edit/Delete Message      Find Poems   Click to visit Balladeer's Home Page   View IP for Balladeer


COSTELLO: I want to talk about the unemployment rate in America.

ABBOTT: Good Subject. Terrible Times. It's 9%.

COSTELLO: That many people are out of work?

ABBOTT: No, that's about 20%.

COSTELLO: You just said 9%.

ABBOTT: 9% Unemployed.

COSTELLO: Right 9% out of work.

ABBOTT: No, that's about 20%.

COSTELLO: Okay, so it's 20% unemployed.

ABBOTT: No, that's 9%...

COSTELLO: WAIT A MINUTE. Is it 9% or 20%?

ABBOTT: 9% are unemployed. 20% are out of work.

COSTELLO: IF you are out of work you are unemployed.

ABBOTT: No, you can't count the "Out of Work" as the unemployed. You have to look for work to be unemployed.

COSTELLO: BUT THEY ARE OUT OF WORK!!!

ABBOTT: No, you miss my point.

COSTELLO: What point?

ABBOTT: Someone who doesn't look for work, can't be counted with those who look for work. It wouldn't be fair.

COSTELLO: To who?

ABBOTT: The unemployed.

COSTELLO: But they are ALL out of work.

ABBOTT: No, the unemployed are actively looking for work... Those who are out of work stopped looking. They gave up. And, if you give up, you are no longer in the ranks of the unemployed.

COSTELLO: So if you're off the unemployment roles, that would count as less unemployment?

ABBOTT: Unemployment would go down. Absolutely!

COSTELLO: The unemployment just goes down because you don't look for work?

ABBOTT: Absolutely it goes down. That's how you get to 9%. Otherwise, it would be 20%. You don't want to read about 20% unemployment do ya?

COSTELLO: That would be frightening.

ABBOTT: Absolutely.

COSTELLO: Wait, I got a question for you. That means they're two ways to bring down the unemployment number?

ABBOTT: Two ways is correct.

COSTELLO: Unemployment can go down if someone gets a job?

ABBOTT: Correct.

COSTELLO: And unemployment can also go down if you stop looking for a job?

ABBOTT: Bingo.

COSTELLO: So there are two ways to bring unemployment down, and the easier of the two is to just stop looking for work.

ABBOTT: Now you're thinking like an economist.

COSTELLO: I don't even know what the hell I just said!
And now you know why Obama's unemployment figures are improving!
Grinch
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5 posted 02-12-2012 02:55 PM       View Profile for Grinch   Email Grinch   Edit/Delete Message      Find Poems  View IP for Grinch


HEY ABBOTT!



The logic you and Bud are struggling to understand Mike is that both figures are relative and comparable. The real unemployment figures from last month, last year or from the last administration are all calculated in exactly the same way.  As long as you compare apples with apples, there isn't much of a problem.

The problem arises when you start to introduce oranges into the equation - in this case when you refer to the real or underlying unemployment figures instead of the adjusted unemployment figures.

By the way the reason this particular downward trend is interesting is that the underlying or real unemployment figure has gone down too. That would need to be repeated to be significant but it's a start.

.
Balladeer
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6 posted 02-12-2012 11:49 PM       View Profile for Balladeer   Email Balladeer   Edit/Delete Message      Find Poems   Click to visit Balladeer's Home Page   View IP for Balladeer

True enough, Grinch, as long as apples are being compared to apples. I have a lack of trust and doubts that they are.

Even assuming that they are, what were the figures of those not looking for work when Obama took over? If you take those people out of the equation and simply go by the unemployed looking for work, you can get one figure. However, if the number of people not looking for work changes, then that makes a difference. For example....

President A leaves office with the unemployment of those looking for work at 9%. The number of people out of work and not looking is 10%.

President B, near the end of his term, announces unemployment in the same way at 8% but the amount of people not looking is 15%.

In actuality, B can say he lowered the rate from 9 to 8 when, in reality, the combination of the two shows a 4% increase of people out of work.

Where are the apples?
Grinch
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7 posted 02-13-2012 03:14 PM       View Profile for Grinch   Email Grinch   Edit/Delete Message      Find Poems  View IP for Grinch


Hmm.

Just to clarify Mike. What do you think the adjusted unemployment figure is designed to measure?

.
Balladeer
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8 posted 02-13-2012 07:57 PM       View Profile for Balladeer   Email Balladeer   Edit/Delete Message      Find Poems   Click to visit Balladeer's Home Page   View IP for Balladeer

You'll have to enlighten me, grinch.


What I believe is the there is a good probability that Obama is using the figures of people looking for work dropping and ignoring the percentage of people unemployed and not looking. I think any valid figure would have to include the two. If 10% of the people are out of work and looking and 15% are out of work and not looking, that equals 25% of people out of work.

Also, this is a little interesting...
http://www.bloomberg.com/news/2012-02-13/okun-s-law-broken-as-u-s-jobless-rate-unexpectedly-declines-tom-keene.html
Grinch
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9 posted 02-14-2012 02:02 PM       View Profile for Grinch   Email Grinch   Edit/Delete Message      Find Poems  View IP for Grinch

quote:
You'll have to enlighten me, grinch.

I'm not sure Mike, that's why I asked. I'm guessing from what you've written so far that you believe it's a measure of how many people aren't working - am I close?

quote:
What I believe is the there is a good probability that Obama is using the figures of people looking for work dropping and ignoring the percentage of people unemployed and not looking.


That's exactly what he's doing. That's how the adjusted unemployment rate is calculated, it's how it's always been calculated because adding the people not looking for work would make the adjusted unemployment figure useless.

quote:
I think any valid figure would have to include the two. If 10% of the people are out of work and looking and 15% are out of work and not looking, that equals 25% of people out of work.


I agree entirely, if you're trying to calculate the total number of people who aren't working that's one way to do it but that's not what the adjusted unemployment figure is designed to measure.

.
Huan Yi
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10 posted 02-14-2012 04:31 PM       View Profile for Huan Yi   Email Huan Yi   Edit/Delete Message      Find Poems  View IP for Huan Yi

.


Why is there no WPA or CCC?

http://en.wikipedia.org/wiki/Works_Progress_Administration

http://en.wikipedia.org/wiki/Civilian_Conservation_Corps

.

.
Balladeer
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11 posted 02-15-2012 12:02 AM       View Profile for Balladeer   Email Balladeer   Edit/Delete Message      Find Poems   Click to visit Balladeer's Home Page   View IP for Balladeer



If the adjusted unemployment rate is nothing more than the figure of people looking for work, as you state, then what does the "adjusted" stand for?

I agree entirely, if you're trying to calculate the total number of people who aren't working that's one way to do it but that's not what the adjusted unemployment figure is designed to measure.

Then I feel that using such a barometer is ridiculous.  The unemployed not looking are ignored? What kind of sense does that make? So if 5% of those who had given up looking for work decided to start looking for work again, the unemployment rate would go up 5%? How ridiculous is that? There must be something more to it to make it not so illogical.

If 100 people entered into a marathon and 40 dropped out, would you be able to say that everyone finished the race? Of course not. You can't simply ignore those who dropped out. In unemployment you can't simply ignore the people out of work who have given up looking. If that's the way they do it, their figures are useless.
Grinch
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12 posted 02-15-2012 03:33 PM       View Profile for Grinch   Email Grinch   Edit/Delete Message      Find Poems  View IP for Grinch

quote:
what does the "adjusted" stand for?

That's just a popular term to differentiate it from the total unemployment figure which is a subset of the real unemployment figure.

Confused?

I'm not suprised.



Fortunately when you look at each of the figures and how they're calculated it's easier to understand what they're used for and how they relate to each other.

The real unemployment figure is the simplest; it's the number of folk in the total population not working displayed as a percentage. The real unemployment figure tells you what percentage of the population is not working but it's not really useful because it includes people you wouldn't expect to be working - old folk, kids, the infirm etc.

The total unemployment figure is designed to make the numbers a little more useful, instead of measuring the unemployed against the total population it measure the number not working against the available workforce - the workforce being the number of people who would reasonably be expected to be available for work. Basically the population minus all the old, young and infirm etc.

While that figure is useful it still doesn't give you a good representation of unemployment that can be used to calculate the jobs deficit which is what governments and economists really need. That's because the available workforce contains a whole bunch of people who would reasonably be expected to be available to work but, for various reasons, aren't looking for a job. That's where the adjustment comes in, if you take off all the people not looking for work it's easier to calculate the required number of jobs to get to full employment - everyone who wants a job has a job.

Err.. well that's not actually true, just to confuse things even further full employment is actually defined as 4% unemployment - but that's another story.



quote:
So if 5% of those who had given up looking for work decided to start looking for work again, the unemployment rate would go up 5%? How ridiculous is that?


Not very. It's why economists recognise that the adjusted unemployment rate is a trailing indicator of growth, after a recession or depression the unemployment rate never follows in line with the economic recovery. As the available jobs increase and wages rise more people rejoin the workforce.

So why put up with an unemployment rate calculation that is flawed when it comes to measuring the unemployed?

That's because what the figure tells you about the jobs deficit is far more important, and a lot easier to measure, than how many people may or may not rejoin the workforce. If there were more jobs than could be filled by the workforce the economy would suffer hyper-inflation as wages, and consequently prices, rose. Knowing how many jobs is too many, or not enough, is very useful in that regard.

A bit convoluted but that's why people who aren't looking for work aren't included in the unemployment figures.

.
Balladeer
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13 posted 02-15-2012 09:27 PM       View Profile for Balladeer   Email Balladeer   Edit/Delete Message      Find Poems   Click to visit Balladeer's Home Page   View IP for Balladeer

Thanks for taking the time to explain, grinch. Personally I think they have made sure to make something complicated out of something a lot simpler.

I'm reminded of the two men who had horses tied up next to each other and they were trying to remember whose was whose. They measured the legs, the length of the tails, the number of teeth, and based on all of the measurements they made, they determined that the black horse was Bill's and the gray was Sam's.

I think they have over-complicated it so much that their figures make no sense at all. There are x amount of employable people. There are y amount of people not working...do the percentages.
Grinch
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14 posted 02-16-2012 01:18 PM       View Profile for Grinch   Email Grinch   Edit/Delete Message      Find Poems  View IP for Grinch


quote:
There are x amount of employable people. There are y amount of people not working...do the percentages.


That's the total unemployment rate Mike and it doesn't give you a true picture when you're trying to work out the supply and demand when it comes to jobs. There are after all an indeterminate number of people who are employable but don't want a job for very good reasons -  for instance I know if I had enough money I definitely wouldn't be working or looking for a job and I'm probably not on my own.



I know what you mean though Mike - calling it the 'Unemployment figure' is a bit of a misnomer, which in part causes the confusion. The employment gap would be closer to the meaning.

.
Sunshine
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15 posted 02-16-2012 10:34 PM       View Profile for Sunshine   Email Sunshine   Edit/Delete Message      Find Poems   Click to visit Sunshine's Home Page   View IP for Sunshine

Just as the generation gap never did anything to resolve the differences between the two [older and younger generations]

neither does the discussion of who is employed, who is without work, who can't find a job but it working at it, and who has quit looking because no one will hire them, as there are no jobs to be found, with creativity aside, which might solve the equation.

When they quit counting the folks who are off unemployment, the guvmint lowers the figures. Still, there are those folk who continue trying to find work but are in a world that won't make anything other than doo. It gets stickier by the second.

Grinch, god love ya, I don't know where you reside, but I find it hard to think that you might not be within the US. That's all right...you sound like you're doing good, and I don't begrudge you for your sanctity.

I just know a lot of folk who are so very tired of being tired of fighting the loss of hope, yet keeping up the idea that the US will once again be a force, not just to be reckoned with, but one that will not only slow the unemployment rate, but start hiring from the outside. Look around us...some nations do it all the time. And I know a lot of Americans who aren't going to say no to a job.

In the meantime, it could very well be called discrimination in so many ways....

Denise
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How does the government know 'who has given up looking for work'? I don't think they could possibly know that. I think they just go by the number of people who have exhausted their unemployment benefits. Once the benefits run out they are dropped from the category of the 'unemployed'.
Grinch
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17 posted 02-18-2012 07:02 AM       View Profile for Grinch   Email Grinch   Edit/Delete Message      Find Poems  View IP for Grinch

quote:
How does the government know 'who has given up looking for work'? I don't think they could possibly know that. I think they just go by the number of people who have exhausted their unemployment benefits. Once the benefits run out they are dropped from the category of the 'unemployed'.


That's how States calculate their unemployment rate Denise, which is one of the main reasons why extensions to unemployment benefits are opposed so vigorously by politicians.

The Federal government figures are calculated differently, they use a representative sample system. Every month they question 60,000 households that are representative of the overall population, every member of the household is categorised into one of three types:

Employed

Unemployed but looking for work

Unemployed but not looking for work

The adjusted unemployment rate is the number of unemployed divided by total workforce (the total number of respondents minus those not looking for work) displayed as a percentage.

If there are 150,000 respondents, 106,000 reporting that they're employed, 14,000 unemployed but looking for work and 30,000 unemployed but not looking for work the calculation is as follows:

(14000 / (106000+14000)) X 100 = 11.66%

In this calculation it doesn't matter whether those looking for work are receiving benefit or not as long as they're looking for work.

.
Balladeer
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18 posted 02-18-2012 07:25 AM       View Profile for Balladeer   Email Balladeer   Edit/Delete Message      Find Poems   Click to visit Balladeer's Home Page   View IP for Balladeer

So, actually, that gives control to the federal government to cook the figures. You say "representative of the general public" but who can prove that? Depending on where they gets the results from, the percentages can differ greatly. SOunds like a poll like so many others....the results are in the manipulations.
Grinch
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19 posted 02-18-2012 08:22 AM       View Profile for Grinch   Email Grinch   Edit/Delete Message      Find Poems  View IP for Grinch


quote:
So, actually, that gives control to the federal government to cook the figures.


It's not really likely. While the figures are collected by a government department (The Bureau of Labor Statistics) they are independently audited and scrutinised by Congress committees.

I suppose it is possible. You'd have to get all the staff who collect and collate the figures to play along, as well as the auditors and, I suppose, the Republicans on the various committees would need to turn a blind eye to any anomalies. If Obama could conscript all those folk into his conspiracy then yes, it's technically possible - but it's highly unlikely.

There are a couple of things that make it even more unlikely.

The first is that you can't manipulate the figures by much because available data from other sources would make any manipulation stand out like a sore thumb.

The second is that it's far easier to manipulate the figures in a more legitimate way.

.
 
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