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Unemployment Rate Goes Down, Deadbeat Rate Goes Up; Rush Limbaugh Proven Correct.

Unemployment Rate Goes Down, Deadbeat Rate Goes Up; Rush Limbaugh Proven Correct.

Radio personality Rush Limbaugh and others have questioned the Bureau of Labor Statistics unemployment rate as a valid measure of economic improvement. Naturally there are political reasons why the Obama administration would want to show 2010 numbers as weak as possible (blamed on President Bush, of course), and make 2015 numbers look as rosy as possible.  Republicans have the opposite motivation.

Some simple calculations reveal a serious discrepancy, in our opinion, between two government organizations with reputations for precision.

If one assumes the Census Bureau and the Bureau of Labor Statistics know what they are doing (and I do, in the absence of concrete conspiracy data), the numbers become pretty interesting.  I’m an engineer by training so numbers are my game.  The data below are from these two government organizations.

(click to enlarge)

 

If you subtract people older than 65 and younger than 18 to determine a working age adult population, then in 2010, 78.8% of working age adults were part of the BLS estimated work force.  In 2015, only 77.7% of working age adults are included.

This puts 21.2% of adults in 2010 in the “deadbeat” class who are not counted as part of the work force. (Yes, I realize this is an entirely unfair classification, since this would include stay-at-home moms who work VERY hard, the handicapped, etc.).  In 2015 the “deadbeats” are 22.3% of working age adults.

By my calculations, this means we should have an additional 2.4 million people in our work force.  Why does the BLS estimation fall short? 

The stay-at-home mom and handicapped populations have been relatively stable over this period. So where did this group of 2.4 million extra workers go? Could they be a part of the new welfare population under the Obama administration?  Are these indeed brand new ‘deadbeats.’ Maybe they are potentially hardworking people who have just given up on finding work?

By 2010 standards the unemployment rate should be about 6.7%. Obviously not quite the political feather in cap the current BLS estimated 5.1%. 

We conclude Mr. Limbaugh is correct, something is indeed wrong with these statistics, or at least how they are interpreted for the American public.  The unemployment picture is not as the Obama Administration has painted it.

 

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