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The Real Unemployment Numbers

BEGIN TRANSCRIPT

RUSH: This is Sam in San Diego.  Glad you waited, sir.  Your turn on the EIB Network.  Hello.

CALLER:  Dittos, Rush, and thank you from the West Coast.  So I hate to think that I threw away the good education that my parents paid for, but I don't understand how downgrading the number of jobs available increases or also decreases the unemployment number.  It would be like McDonald's saying they sold one and a half billion fewer hamburgers than they previously said and so have ended hunger.  I don't see the correlation.

RUSH:  Okay.  I just want to make sure I understand the question.  You don't understand my point when I say they reduce the overall number of jobs available in the universe, the relationship of that to the unemployment number?

CALLER:  Correct.  Why should both go down?  If fewer people had jobs available to them, the same number of people exist, they still don't have jobs. It didn't make them less unemployed.

RUSH:  Well, let me try it with something that doesn't have to do with jobs.  Well, let me stick with jobs.  Let's say that four years ago there were ten million jobs and a certain number of people didn't have jobs that wanted them, and the unemployment rate was, let's just say, 8%.

CALLER:  Okay.

RUSH:  Now you reduce the ten million jobs to eight million.  The number of people haven't changed. People haven't died.  You still have the same number of people pursuing fewer jobs.  It means that the percentage of people unemployed is gonna be expressed as being much less than it actually is.  You get the same number of people chasing fewer jobs, the percentage of those out of work has got to come down because there are fewer jobs to have.
CALLER:  Okay.  Did they just become terminally unemployed because of the math?

RUSH:  Well, there's three levels here.  There are people that are looking, there are people that are still looking but have gone beyond their 99 weeks of unemployment, and the third group of people have given up.  Those people are not counted in the unemployment number that's reported.  The unemployment number that's reported by the government's called U3, and that's the number that you see on the news.  Right now it's like 8.2 or 8.3%.

CALLER:  Okay.

RUSH:  The U6 number counts everybody.  And that number is about 17%.  People that have quit looking for jobs, people that are still looking for jobs, that their unemployment extension's run out, and people who are still on unemployment.  Just adds 'em all up.  But you've got that universe of people chasing fewer jobs.  What you're not understanding is the scam here.  I'm not trying to say this is legit.  The scam is to simply say there are fewer jobs.  They just erased 1.2 million possible jobs in December alone.  They just said those jobs are gone.  They're not fillable.  So the total number of potential jobs to get has been reduced in one month by 1.2 million.  Well, if you've got a smaller universe of total available jobs pursued by the same number of people, the percentage of people out of work is going to be lower. 

James Pethokoukis at the American Enterprise Institute has run the numbers.  He said if the number of jobs available today were identical to what they were when Obama was immaculated, there were 2.2 million more jobs available to have in this country in '09 than there are today.  If the same number of jobs existed, the real unemployment rate that's reported would be almost 9.8%.  So you're just not understanding the scam.  You're examining this as a legitimate math problem.  They're just lowering the universe against which the number of people looking for work is compared.  And it has to come down.  The percentage has to come down because the unemployment rate is based on jobs available.  Labor force participation rate, there's a whole bunch of factors involved in it. 

Believe me, the Labor Department, it was in the numbers that came out in January.  They just said that they discovered in December that 1.2 million jobs basically went poof.  Now, you can visualize that as boarded up small businesses, shut down factories, however you want to visualize that.  But jobs that used to exist, they could be firefighter jobs, they could be information technology jobs, whatever, the regime just said they're gone, for the express purpose of having a smaller number of available jobs against which to compare the number of people looking for a job.

BREAK TRANSCRIPT

RUSH:  I want to try this unemployment business with numbers, but I must acknowledge that following numbers on the radio is admittedly tough to do.  You can't see them.  But I'm gonna give you two examples.  Twenty jobs and five people fill them, so 15 of the 20 jobs unfilled.  That's an unemployment rate of 80%.  You got a universe here of 20 possible jobs, five of them are filled.  That means 20% are working, 80% are not.  Now let's reduce the 20 to 15.  There are 15 jobs, that's what the regime has done, they've simply erased, in my example, five jobs.  The same number of people, five people working, but now 15 jobs available.  That is an unemployment rate of 66%.  It has come down from 80%. 

When five people fill 20 jobs, there are 15 jobs unfilled that people are looking for.  Unemployment rate, 80%.  Now that 20 becomes 15 jobs.  Same number of people work at this place, but now there are only ten positions to fill instead of 15, that means the unemployment rate is 66%.  So with the same number of people working and the same number of people looking, with five fewer jobs available, if you want to express those working versus the jobs available, the percentage is 66% verse 80 percent, the unemployment rate.  You could look at it the other way around, 20% are working.  Five people occupy 15 jobs, 33% are working.  You simply make smaller the universe of possibility and keep the number of people chasing that number the same.  And by simple math, the rate of unemployment, unfilled jobs will go down. 

Not because new jobs have been created, by the way.  This is the point of it.  The unemployment rate in this country is coming down, but there aren't any new jobs being created.  This is the scam.  They're still unemployed.  They're still applying for unemployment compensation.  They're still running out of their 99 weeks.  They're still giving up looking.  Everything's the same.  So how can the unemployment rate be coming down?  Well, it isn't.  What's happening is, the regime is simply reducing the overall number of jobs that are possible to be filled.  Look, I am lousy at math, and this makes perfect sense to me.  This is undeniable.  And this is the scam.  Unemployment rate is coming down, but the employment rate's not going up.  So what explains it?  Well, I just did.

BREAK TRANSCRIPT

RUSH:  Folks, look, for those of you who are apparently believing that the number of available jobs doesn't matter to the unemployment rate, you have to answer something for me.  If the number of jobs doesn't matter, then why in the name of Sam Hill is everybody from Obama on down worried about creating jobs?  If the number of jobs don't matter in terms of measuring unemployment, then what does it matter whether we create any new ones?  We have to create new ones because there aren't any jobs to fill, I thought.  Isn't that what they're trying to tell us?  That's why the economy's slow?  Wake up.

BREAK TRANSCRIPT

RUSH: "The rate of unemployment in the United States has exceeded 8 percent since February 2009, making the past three years the longest stretch of high unemployment in this country since the Great Depression. Moreover, the Congressional Budget Office (CBO) projects that the unemployment rate will remain above 8 percent until 2014."  Anybody want to take a bet that that unemployment rate gets below 8% this year?  Now, here comes the unchallengeable CBO.  The CBO is the gospel.  They are nonpartisan.  They don't have any bias whatsoever at the CBO.  They can only deal with whatever data they are given.  Therefore they can't possibly be biased.  That's how they could report that Obamacare was going to cost less than a trillion dollars, because, according to what the Democrats gave them to calculate, that's what it turned out to be.  So the CBO says no way unemployment will get below 8% until 2014. 

"The official unemployment rate excludes those individuals who would like to work but have not searched for a job in the past four weeks as well as those who are working part-time but would prefer full-time work."  They also say, by the way, the CBO, that the real unemployment rate will hit 15%.  That's the U6 number.  That counts everybody.  That's another thing when we talk about unemployment, the U3 is what's reported every month.  And that leaves people out who have stopped looking.  Why would they leave that group of people out when calculating unemployment?  It's not just this regime.  This has been going on for decades.  Why would they do it?  

You've got people who were looking for work, over three or four years, they didn't find any, so they've given up. They're still not working, but all because they say they're not looking anymore. "Well, they're not unemployed, they're not even looking for work."  They certainly are unemployed.  They're not working.  Why leave the number out in what's reported?  Why hide it in some other category?  The answer is obvious.  To provide less pressure on whoever happens to be running the government at the time, whichever political party is in charge of things.  

END TRANSCRIPT

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