Is “Official Unemployment Rate” Distorting True Numbers
The unemployment rate announced monthly is used as one of the key barometers of the economy. The unemployment rate receives vast coverage by the media. Trump and his election campaign highlight its decrease as an indication that the pandemic-wracked economy is recovering, despite ongoing layoff announcements in the retail industry, and recently the 28,000 person layoff announced by Disneyland. Over 6 months, more than 60 million Americans have filed for unemployment insurance according to the Business Insider.
A closer look strongly suggests that the methodology used to calculate this rate distorts the truth, and can be manipulated. The real unemployment rate is likely much higher. Further, in May 2020, the BLS miscalculated the rate, and had to recalculate it up after the wrong numbers were released. Democrat Senator Kamala Harris said that the Trump administration “has used the revised numbers to paint a rosier picture of the economy than what is true.”
An Unemployment Rate — but State Unemployment Numbers Not Used!
Early each month, the Bureau of Labor Statistics (BLS), a part of the U.S. Department of Labor, releases the “official” unemployment rate — which purports to tell us the percentage of the labor force that is unemployed in a series of tables.The BLS also announces the total number of employed and unemployed people in the United States for the previous month, along with many details about them. But this information is not based on available state unemployment information, such as unemployment being paid or new unemployment claims — but on a ?BLS? survey!
Each month, highly trained and experienced Census Bureau employees contact the 60,000 eligible sample households and ask a series of about the labor force activities. The information is collected using a computerized questionnaire.They ask if they are job holding, job seeking, or a non-labor force status of the members of these households during the survey reference week (usually the week that includes the 12th of the month). These are live interviews conducted either in person or over the phone. During the first interview of a household, the Census Bureau interviewer prepares a roster of the household members, including key personal characteristics.
Since these interviews are the essential source of data for total unemployment, information must be correct and consistent. The survey never asks respondents specifically if they are unemployed, nor are they allowed to decide their labor force status. Their status is determined based on how they respond to a specific set of questions about their recent activities. Similarly, interviewers do not decide the respondents’ labor force classification.
BLS Commissioner William W. Beach and Trump Likely Influence
William W. Beach became the BLS commissioner in 2019 when appointed by Trump. He was nominated for the job by the Trump administration back in October 2017 and was a highly desired choice because of his experience and strong Republican connections. Before his position as BLS commissioner, he served on The Senate Budget Committee for the Republican Staff. He spent most of his career as an economist. When he worked at the Heritage Foundation, a right-wing organization, under George W. Bush, Beach urged cutting unemployment benefits, claiming that an extension of services “changes the behavior of the unemployed people. They don’t look for work as much as they otherwise would.” Even if Trump is not directly calling him, Beach knows what is at stake with the unemployment rate and the upcoming election. Beach could be directing changes that reduce the “official rate,” by adjusting survey results or critical questions.
BLS Errors in May 2020 Reporting
According to The Washington Post, “The government agency that compiles the official U.S. unemployment rate — the Bureau of Labor Statistics — said it is still working to fix an unprecedented data-collection error that has badly skewed the rate. The May jobs report included an unusual note saying that the unemployment rate would have been 16.3 percent, not the official rate of 13.3 percent, if not for errors made during the data collection. This problem also plagued monthly reports in March and April. Both the “official” and corrected May unemployment rates showed improvement compared with April figures. The errors have sowed doubt about the integrity of the statistics, as the economy has cratered during the pandemic.”
“Economists say the BLS was trying to be as transparent as possible about how hard it is to collect real-time data during a pandemic. The BLS admitted that they ‘misclassified’ some people who should have been classified as ‘temporarily unemployed” during the shutdown.. were instead misclassified as employed but ‘absent’ from work for ‘other reasons.’” The ‘other reason’ category is generally used for people on vacation, serving jury duty, or taking leave to care for a child or relative. These are typically situations where the worker decides to take a break. Yet, in this unusual pandemic circumstance, some people applied the ‘other reason’ category for staying at home and waiting to be called back.”
Beach said, “There’s no evidence for that allegation. I can tell you, no one from any political source has contacted me since I’ve been commissioner, on any of this stuff except to get information. It’s just bad business to try to undermine your infrastructure. BLS is essential to our economic infrastructure.” He claimed that the Trump administration did not tamper with data.
Economists said they could not think of another statistical issue of comparable magnitude in the country’s modern era. The errors come when missteps at public agencies have combined with an administration that has spread falsehoods and misinformation, “ Economists commented, for example, that “Only 67 percent of households responded to the survey in May, down from over 80 percent before the pandemic. Fewer and fewer people take the survey; it can become less representative of the adult U.S. population.” NBC News reported that
Continued Distortion of the True Rate
If you look at the BLS Table A-15 chart below taken from here:
We will see that the official August 2020 unemployment rate (U-3, not seasonally adjusted) was 7.3%. Yet, the truer (U-6) unemployment rate was 14.3%, 7% more than one (pre-pandemic) year ago! NBC commented on how the White House has no right to brag. They said that even though “The White House bragged about the jobless rate falling from a peak of 14.7 percent in April to 8.4 percent in August, that decrease obscures the sobering deficit that remains of more than 11 million jobs, compared to the pre-pandemic labor market.”
Pinocchio at it again!
Trump is Pinocchio, lying for his own selfish needs. He failed to act despite knowing in January 2020 of the severity of the impending COVID-19 crisis, as his recent Woodward tapes reveal. Now over 200,000 of our fellow Americans are dead. We can reverse his 2016 electoral college victory with the help of new 18 to 21-year-old voters in the five crucial electoral college swing states — Florida, Michigan, Pennsylvania, North Carolina, or Wisconsin. See our informational electoral college video here:
https://www.youtube.com/embed/KadLbZT3xnM?autoplay=1
We need your involvement against Trump in the swing states to beat him. Let’s flip 38 electoral votes!
Yours Truly,
Jackie T.
Visual Disobedience Campaign consultant
The facts from this post are primarily from this article in The Washington Post, this section on the BLS website, this section from Allgov.com, and this article from NBC.
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