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May 6, 2014

‘Unemployment Is Down,’ but Did They Mention How Many Gave Up?

It isn’t a good sign when 800,000 people leave the workforce.

The White House and its Leftmedia propaganda wing have been busy spreading the good news about the April jobs report. Unemployment, according to the official story, is down to 6.3%, following a months-long steady downward trend that is supposed to be proof positive that the economy is on the mend. The U.S. business survey, which is the linchpin of the unemployment report, claims that businesses added 288,000 jobs to their payrolls last month. Good news in and of itself, but as with so many things these days, it only masks a deeper, uglier truth.

The survey of households across the country demonstrates a decline of 73,000 jobs during the last month. In April, a staggering total of 800,000 people left the labor force altogether. And those are not all baby boomer retirements. (As if anyone can afford to retire these days.) A vast portion were people who have simply given up looking for work. This number blows a hole right through the government’s official unemployment rate, and it’s the number that people should really be watching.

Why the discrepancy? Because since the mid 1990s, the federal government has defined unemployment using rosy calculations that focus merely on the number of people in the labor force – those working or actively seeking employment. The long-term unemployed, many of whom have given up looking for work for one reason or another, are not counted as part of the labor force and therefore not part of the official unemployment numbers.

When you take a look at the total labor participation rate as of April 2014, you get a much darker, but honest assessment of the true unemployment numbers. The labor participation rate last month was 62.8%, a 0.4% drop from March, and the lowest since 1978. Fewer people are actually looking for work because they have given up trying. There are no jobs to be had, or at least no jobs with which people can support families. So, part of the reason for a drop in the official unemployment rate was the fact that there were actually fewer people in the labor force competing for jobs, making the shrinking unemployment rate merely an illusion. It’s not that more people are going back to work, it’s that more people have given up looking for work where there is none, and therefore are no longer being counted as part of the labor pool.

The statistical slight of hand is dangerous for America’s financial security. Obama and his leftist cronies would have us believe that their draconian policies – high corporate tax rates, ObamaCare, excessive regulations – are good for the economy. The fact is, these policies are destroying us. The real unemployment rate, which factors in the total labor force, is currently 12.3%. It’s been in the double-digits since Obama took office.

Last week, we reported that the economy only grew by 0.1% last quarter. Investors continue to sit on the sidelines, refusing to put money into businesses that are being discouraged from hiring due to ObamaCare. Major employers like Pfizer are considering relocating overseas where the corporate tax rates are amenable to growth. If the job numbers are so great, then why are all these things happening?

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