Population Up, People Working Down

The back and forth that you hear about the unemployment rate can be very confusing.  The federal government announced last week that the unemployment rate was down to 7.8% in September.  This is the lowest it has been in nearly four years.

You will undoubtedly hear President Obama and the Democrats using this statistic to claim that their policies are working.  However, let's look at the actual raw numbers and not focus on the reported  unemployment rate. You can make your own judgment on the success of President Obama's policies over the last four years.

All of this data comes directly from the U.S. government's Bureau of Labor Statistics website.  I used data from December, 2008 as the base period as it represents the last full month before President Obama took office on January 20, 2009.  The most recent BLS report of last week for September, 2012   shows where we are today.

One picture tells the real story.

The total population of those age 16 and over has increased by 8.7 million (from 235 million to 243.7 million).

The total number of those age 16 and over who are not in the workforce (either in school, stay-at-home parents, disabled, discouraged or retired) has increased by 8.3 million (from 80.4 million to 88.7 million).

The total number of unemployed has increased by 789,000 (11.3 million to 12.1 million)

The total number of people actually working has decreased by 354,000 (143.3 million to 143.0 million)

The bottom line is that although the working age population has increased by almost 9 million people, the total number of people actually working is lower today than when Barack Obama took office.

The BLS actually tracks the number of persons who are "not in the labor force" but "want a job now".  You would think that these people would be considered unemployed and be considered in the calculation of the unemployment rate.  They are not because someone is considered as unemployed only if they have actively looked for a job in the last four weeks.  If these people were considered as "unemployed" rather than as "not in the workforce" the unemployment rate would be 11.6%

Here is a chart showing those who want a job now but are not considered in the unemployment rate over the last four years.  This amounts to 6.7 million people which is about 1.3 million higher than it was when President Obama took office.

I have written before that I am more concerned about the percentage of those employed than the percentage that are unemployed.  After all, there are bills to be paid in this country.  People need shelter, food, energy, medical care and other necessities.  The lower the percentage of those working, the greater the burden those working carry for everyone else.  It is a simple comparison of how many are in the wagon versus how many are pulling the wagon.

We need as many people pulling the wagon as we can right now.  If we can't get more people out of the wagon and to start pulling the wagon, we will continue to struggle. We will also inevitably reach the day that those in the wagon who have no other choices or options will be hurt most of all. There simply will not be enough people left pulling the wagon and paying the taxes to carry them.  They will have no choice but to get out of the wagon.  The wagon will be stuck in the mud and broken from the weight it is bearing.

Forget about the unemployment rate.  You can see from the numbers above that it distorts reality.  Focus on how many are pulling the wagon compared to how many are in the wagon.  That is the only ratio that counts.