Wednesday, November 13, 2013

More lies, damned lies and statistics

How can the administration continue to claim that the US unemployment situation is slowly but surely improving?  Simple - by defining the categories, the meaning of those categories, and the statistics measuring them, in their own terms.  Statistics painting too gloomy a picture?  Easy-peasy - just change the definition, or amend the methods by which those statistics are calculated, and everything looks rosy again.

The latest example comes from the Bureau of Labor Statistics, which has announced that the unemployment rate was almost unchanged last month.  Buried in the news release was this gem:

The labor force participation rate fell by 0.4 percentage point to 62.8 percent over the month.

Sounds innocuous, doesn't it?  Doesn't have any negative connotations at all, does it?  Not so fast.  As CNS News points out:

The percentage of American civilians 16 or older who have a job or are actively seeking one dropped to a 35-year low in October, according to the Bureau of Labor Statistics.

. . .

The labor force, according to BLS, is that part of the civilian noninstitutional population that either has a job or has actively sought one in the last four weeks. The civilian noninstitutional population consists of people 16 or older, who are not on active-duty in the military or in an institution.

At no time during the presidencies of Ronald Reagan, George H.W. Bush, Bill Clinton or George W. Bush, did such a small percentage of the civilian non-institutional population either hold a job or at least actively seek one.

. . .

When someone drops out of the labor force and ceases to actively seek a job, they are no longer counted as “unemployed.” The BLS counts as “unemployed” only those who have actively sought a job in the last four weeks. The unemployment rate is the percentage of people in the labor force who did not have a job in the last four weeks but were actively seeking one.

People in the civilian noninstitutional population who did not have a job and did not actively seek one in the last four weeks are considered “not in the labor force.” The number of Americans not in the labor force has climbed by 11,034,000 since Obama took office, rising from 80,507,000 in January 2009 to 91,541,000 in October.

There's more at the link.

Suddenly it's blindingly obvious why the unemployment rate is at 'only' 7.3%, and remaining 'stable'.  The BLS has simply removed from the unemployment calculations the more than 11,000,000 Americans who've been added to those 'not in the labor force' over the past five years.  It's removed them according to its own definition of 'unemployed' and related terms - which are not those that most of the rest of us would use.

If those millions were considered to be 'unemployed', together with those already in that category, the unemployment rate would effectively double.  Needless to say, the administration can't possibly have that - it would tarnish its image, and (perish the thought) give the impression that its policies were less than successful.  Uh-huh.  Word.

By the way, this isn't a dig at the Obama administration in particular.  All administrations, whether Democrat or Republican, seek to hoodwink the American people by doing exactly the same thing.  It's nothing new.  When any administration bandies numbers around, ask yourself:

  • Who's compiling them?
  • Who's determining the method of calculation?
  • Who's defining the terms that they measure?

The answers to those questions will usually give you a pretty good idea of when the statistics are objective and trustworthy, and when they're not worth the paper they're printed on or the pixels on your screen used to display them.

No prizes for guessing the category into which the BLS's latest numbers fall . . .



Anonymous said...

The government cooking the books to make its self look better?

I'm shocked!


wordlet said...

Shouldn't the labor participation rate statistic be for 16-65, or 16+ excluding retired people? Sounds like the person who wrote that article used some convenient interpretation of statistics of his own. People are living longer and the retired population has been increasing for years. It should be no surprise that the labor participation rate is declining.

Though that does not mean that 100% of the decline is retired people, I think many are still leaving because they're discouraged about job prospects. Still, it's misleading to ignore the increasing elderly population.

The Lost Goat said...

And, of course, it ignores the under the table labor market entirely. As the government makes it more and more expensive to be an employer, there is more and more incentive to have "unofficial" employees.

Not that that changes your underlying point about the state of the labor market. France, for instance, is famous for paying people under the table; perfectly respectable middle class people think nothing of it.

Stuart Garfath, Sydney. said...

Seems as if ALL Governments cook their statistical books, as here in Australia.
If you don't have a job, and are not registered as seeking work, you are not counted as unemployed.
Further, if you have worked for at least one hour (or more) in the past week, then you are deemed in full employment.
As someone said years ago, 'There are lies, damn lies, and statistics'.

Tailwind said...

Actually, the real rate is triple the reported rate according to economist John Williams at ShadowStats.

He calculates the numbers using the government's own formula BEFORE it was mangled by the Treasury and OMB boys and it reflects what is being hidden in plain site: the US is experiencing Depression level unemployment and has been for at least the past 3 years.

But don't tell the morons in the WH!

Anonymous said...

35 years ago? Wasn't some grinning idiot from Georgia in the Oval Office at the time?

FYI, it was Benjamin Disraeli, one of the great British Prime Ministers who first stated 'lies, damned lies and statistics'