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The Employment Myth

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The “official” U-3 unemployment rate (seasonally adjusted) for June, 2012, remained at 8.2%, unchanged from May, 2012. The U-6 unemployment rate (seasonally adjusted) of 14.9% is the third month of increase in a row. Is that a trend?

Those unemployment rate numbers now have no meaning. Why? Because fearless leader President Barack Hussein Obama, on July 6, 2012, to us to “not read too much” into the unemployment rate numbers. But, as they shout on TV, wait, there’s more! Let’s see… have we heard the phrase “not read too much” before? Why, YES, yes we have. We heard it from the Obama administration first in November, 2009, and literally every month since March, 2010.

The Bush recession “officially” ended in June, 2009. But guess what. The US has seen 41 straight months with the unemployment rate above 8%. So the question is, “With respect to the unemployment rate, when can we start to “read too much” into the numbers?” Inquiring minds want to know.

As this graph shows, the unemployment rate for ALL 39 months (the graph ends in February, 2012) of Obama’s presidency has been higher than in ANY month of the Bush administration. The unemployment rate fell to 8.1% in April, 2012 (everyone in the MSM said that decrease of three months was a trend), but rose back to 8.2% in May, 2012, and stayed there for June, 2012. So much for the MSM’s trend. Long-term unemployed (those jobless for 27 weeks and over), which comprise about 42% of all unemployed, remained at about 5.4 million.

But wait! The graph shows the unemployment rate “dropping,” but not by much before December, 2010. Obama was inaugurated in January, 2009. In February, 2009, he signed the stimulus into law, promising immediate results. Obama said, “I’m confident … our 21st century investments will create jobs immediately. We’ve got shovel-ready projects all across the country.” Then, in June, 2011, Obama laughingly said, “Shovel-ready was not as shovel-ready as we expected.”

Obama said on July 6, 2012, in a campaign rally in Ohio, “The problem is we’ve got a stalemate in Washington. This election is about how we break that stalemate.” Let’s see. Regarding the stimulus (which BTW passed) Democrats controlled the House and Senate and gave Obama exactly what he wanted. So how long is the stalemate going to go on? The stimulus, if Obama was to be believed, was supposed to immediately solve the unemployment problem. Is 41 months and over $800 billion spent long enough to break the stalemate? What happened to immediately breaking it?

The U-3 unemployment rate of 8.2% was achieved by having the total labor force participation rate shrink, as the graph below shows. The labor force participation rate has fallen by 8 million since Obama took office. The unemployment rate would be 10.9% had the labor force participation rate not shrunk. But that rate would never do for the lap dogs in the MSM. But the U-6 rate takes that shrinkage into account. So is the unemployment rate actually increasing? And all of this from the guy who said that his economic stimulus had to be passed in order to keep the unemployment rate under 8%.

House of Representatives Speaker John Boehner (R-OH) said the Labor Department report [for June, 2012] shows the private sector “clearly isn’t ‘doing fine’ and that President Obama’s policies have failed. Obama bet on a failed ‘stimulus’ spending binge that led to 41 months of unemployment above 8 percent.”

Here is a fact that many of y’all may find interesting: of the seventeen states that elected Republican governors in 2010, ALL saw a decline in unemployment rate. In fact, states that elected Republican governors in 2010 had unemployment rates fall faster than states that elected Democrat governors. And the states that elected Republican governors saw the unemployment rate fall faster than the national rate. Does that say anything about Democrat employment schemes? Your call.

I guess all this unemployment mess is, after 41 months, STILL George Bush’s fault.

But that’s just my opinion.

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  • Haven’t I seen this article before somewhere?

    Ah yes, that’s right. I read it the last time Warren wrote it.

    Oh, and the time before that.

    Not to mention the time before that

  • Igor

    Warren has fallen so low that he’s plagiarizing himself.

  • troll

    Warren – 4th time around must be the charm…it’s your best presentation of the material so far and I appreciate that you didn’t harp on Obama’s middle name

  • Except in paragraph 2.

  • troll

    …crap – missed that one


  • Keen-eyed Warren fans know that sometimes he does forget. Just not in this piece.

  • troll

    I thought that maybe we’d made some progress

  • Keep in mind that the population has been increasing at a rate of about 750T per year since 2000. In the year 2000, the population hit 300MM people. It is now 315MM and growing. How do we reduce unemployment when the population keeps increasing each year. That is, the population grows despite the death rate.

    When President Kennedy was in office, this country had a population of 180MM people.

  • troll

    I advocate a ten year hiatus in human breeding which ought to do the trick

    500000000 or bust

  • And when Kennedy left office, the population was 179,999,999.

    Perhaps he should be applauded for his selfless participation in the depopulation effort.

  • Let’s see…. not one commenter could address the points made in the article. All the commenters could do was attack the writer. Dr. Joseph S. Maresca almost addresses the employment myth. Tell me, if y’all can without divulging too many secrets, did y’all learn that technique from James “Trailer Park Trash” Carville, or is the response technique hereditary?

  • Arch Conservative

    “The private sector is doing fine.”

    And Romney is the one out of touch?

  • Warren:

    And your track record argues for us taking you seriously because…?

  • Igor

    12-Arch: well, the stock market is at record high and corporate profits are at record highs.

  • Re: comment # 13, Doc, I did not ask you (or anyone) to take ME seriously. I asked readers/commenters to specifically address the points I cited in the article – if they can.

  • We did that the last three times you wrote the article, Warren.

  • troll

    illiberal actor…while not required a shout-out or link to BC’s own RJ Elliot whose recent piece at examiner.com is the original source for the stats on the States with newly elected republican govs would have been……nice

  • troll

    (btw – note how RJ’s piece is original and not a rewrite of other people’s work)

  • Re: comment # 17 & 18, troll, for once I must agree with you. The reference I sighted would not take me to RJ Elliot’s piece, even though there was a link in it. But the fact that I did not directly cite RJ Elliot’s article in no way discredits any conclusions Elliot reaches. Yet you choose to hide behind my lack of direct citation rather than address any of his conclusions. Typical!!

  • I believe you mean “cited” not “sighted”…

  • Re: comment # 20, Yes, Christopher, you are correct. Can I plead “typo?”

  • troll

    illiberl actor – note that I said that this go-round is your best treatment of the material to date (primarily because you don’t go whole-hog into some conspiracy theory about the BLS under Obama)

    and note further that I don’t find much to contend against in RJ’s piece –

  • troll

    Here is a fact that many of y’all may find interesting: of the seventeen states that elected Republican governors in 2010, ALL saw a decline in unemployment rate. In fact, states that elected Republican governors in 2010 had unemployment rates fall faster than states that elected Democrat governors.

    another btw and in the name of picking nits – you might want to be more careful and precise in how you summarize the work of others…RJ’s piece compares states with newly elected repub govs to those with newly elected dems –

  • troll

    and one final nit – you say that U6 takes the labor force shrinkage into account but as I understand it this is only partially true…if one hasn’t sought employment in over a year he will no show up in U6 or any other unemployment number