I understand that most peoples’ eyes glaze over when economic numbers or calculations are put in front of them but this is a case where you really should take a look. Once a month you are being sold “snake oil” statistics by your government. The unemployment rate you see on the nightly news has little or no connection to reality. There is no recovery. Things are better by the about the thickness of a razor blade. To use a medical analogy, the country has been in a coma with a fever of 104.8. We are now in a coma with a fever of 102.9.

Let’s break down how you’re being misled with a small-scale example. Suppose on Jan. 1 you have 1000 jobs available and all are filled. The unemployment rate, as calculated by government, is zero. Nobody is out of work.

On January 2, ninety people lose their jobs so the unemployment rate is 9%. So far, pretty simple.

Number of people actually out of work: 90. Looking for work: 90.  Workforce: 1000.  Unemployment rate: 9%

Here’s where the snake-oil deception begins. Let’s say on Jan. 30th, 10 people lose their jobs but 20 of the original 90 people give up and stop looking for a job. The twenty who have “given up” are no longer counted by government as “unemployed.” So here’s how those government numbers would break down:

Adding the original 90 unemployed to the 10 who just lost their jobs, they then subtract from the workforce the 20 who have given up. We now have 80 people listed as “unemployed” and the government unemployment rate goes down to 8.1% while the total of people actually out of work goes up to 100.

Number of people actually out of work: 100. Looking for work: 80.  Workforce: 980.  Unemployment rate: 8.1%

Let us further suppose that by the next year the oil industry is crushed, new company formation is stonewalled by taxes and healthcare legislation, and that government debt sucks all the money out of the economy (that should be easy). This creates a huge downturn in the economy and we now have only 800 jobs available overall and they are all filled.

Let us assume that over that one year period 130 people have “given up” and are no longer considered part of the labor force. We now have 200 fewer jobs available and the calculation goes like this:   Out of a total labor force 870 we have 800 working, 70 looking for work, and 130 “out of the work force.” The government unemployment rate again goes down to 8.0% but the total of people actually out of work goes up to 200.

Number of people actually out of work: 200. Looking for work: 70.  Workforce: 870.  Unemployment rate: 8.0%


To translate this to the “snake oil” you are being sold by your government here are a few facts:

1. The number of people “out of the work force” and not being counted is now over 5 million.

2. The percentage of those working out of those who are able to work is now at 64%; the lowest in thirty years.

3. Part-time workers are at an all time high as are those who hold multiple jobs.

4. There are roughly 2 million fewer jobs available than there were on Jan. 20, 2009.

5. The true unemployment rate is in the neighborhood of 16%.

6. Unemployment among young black males is routinely over 30% and in some cities near 50%!

7. It takes roughly 150,000 new jobs per month to just keep pace with population growth, new grads in the workforce, etc.

8. Only one in five males in the U.S. actually work.

9. As unemployment benefits run out for more and more folks, there has been a huge spike in the number of “mental disability” claims. Disability benefits never run out. 

10. Even according to the ABC government news outlet, a survey showed that only 19.7% of college grads from 2009 who applied for a job were able to find one.

There is so much more but one has to end a post somewhere. Suffice it to say that it is shameful to pretend that, with the use of your snake oil, the patient has recovered when he lies there in a coma with a 102.9.


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