As In America’s Official Unemployment Rate.
This past Friday, the US announced its official Unemployment Rate to be 8.1%, down .02% from 8.3%. On its face, the rate is not all that bad since Canada’s is only slightly better at 7.3% and we are seen as having the best economy amongst all of the G-8 Nations.
But I have to tell you, both numbers are wrong since they grossly understate the true number of unemployed. If you do not believe that, I have the proverbial Florida Swamp to sell you; but I must warn you, swamp land there is quickly being bought up by those who still take comfort in the Official Consumer Price Indices. But that is a story for another time.
But today, I would like to focus on the US number since it is engaged in a critical Election with the main issue being its perceived high unemployment rate – or at least, this should be their Main Election Issue.
America has 240 million Persons of Working Age and of that number some 100 million are not working. Indeed, many of whom have no interest whatsoever in the concept of work.
So in reality, their Unemployment Rate stands at some 41.7% (100 divided by 240 x 100). The 8.1 number is correct only as it pertains to those few who are actively looking for work (i.e. want work).
“Okay Galagher, we get your drift but what about those millions of disabled who are in the workers’ age category but for reasons of mental and physical disability, cannot work. It is not fair to cast them as being employable. And what about Homemakers – they perform a most valuable role, they should be excluded from those deemed unemployed”.
You are absolutely correct, so I looked up the number of disabled Americans and it totals 10% of those of working age or 24 million persons. Moreover, Stats show that 90 million Americans, of working age, can be classified as ‘homemakers’. Of that number 71% are working, leaving 29% in the “homemaker” category – or some 26.1 million people.
So let’s add the two groups up: 24 million disabled + 26.1 million homemakers = 50.1 million whom, although of working age, are not part of the outside workforce for hopefully legitimate reasons. (I must confess to you that I harbour some suspicion in regard to this high number but for the purposes of this Blog, let’s say it is accurate).
That still leaves nearly half – some 49.9 million people of working age but not working. So by deleting the 50.1 million homemakers and disabled from the 240 million of working age, the available workforce is reduced down to 189.9 million.
So let’s do the math one more time.
49.9 million non working Americans represents an Unemployment Rate of 26.30%. Or a better way of saying it, the USA has an Employment Rate of 73.70% (i.e. 140.1 Americans are currently working out of an available working age population of 189.9 million). There a term for this – the participation rate.
I personally would like to see the employment / participation rate used rather than the unemployment rate if for no other reason than it is fully understandable – everyone knows what is included in the number – that is to say – that at the point of time the survey was conducted x% of working age folks were in fact working. With the unemployment rate one is never sure if it includes those actively looking for work, those who have given up looking because there are no jobs or those who look at ‘work’ as an activity beneath them.
There is another important benefit I believe would come out of employment rate, it would force governments to examine more closely why some 49.9 million folks are not participating and would cause them to explore more closely why not. They would be prodded to do so by those 73.70% who are working and would naturally wonder ‘why should I be working to support such a high number of able bodied slackers’.
So to sum up; currently, the USA has nearly 1 out of every 4 its workers not working and with that, I will leave you with one more very interesting statistic – some 100 million Americans are in receipt of food stamps. That means 1 in 3 Americans are on the dole or in receipt of welfare. How can a society retain its economic health in the face of these numbers with so many of its able bodied workers – not working; many intentionally.
It can’t; if you get my drift.
As I see it…
‘K.D. Galagher’
