(Un)Employment In Perspective
In Friday's final employment statistics release before the presidential election, the Bureau of Labor Statistics (BLS) did manage to keep the "official" U-3 unemployment rate below 8 percent, but just barely.
The BLS reported the October 2012, U-3 unemployment rate at 7.9 percent. As Rick Moran says, "... the economy added a middling 171,000 jobs." (By the way, the U-3 unemployment rate among blacks is 14.3 percent, yet Obama's job approval rating among blacks is 91 percent.)
But the U-6 unemployment rate, which is 14.6 percent, includes people who are working part-time but are available for full-time work, as well as those who said they want to work but can't find a job (marginally attached), as well as the long-term unemployed (discouraged workers). The BLS publishes monthly U-1 through U-6 unemployment rates. So, with (at least) two unemployment rates from which to choose, and the fact that the unemployment rates don't begin to tell the complete economic story, some further perspective (information) is warranted.
Let's first examine long-term unemployment. The BLS categorizes anyone unemployed for more than six months (27 weeks) as long-term unemployed. The long-term unemployed presently comprise (seasonally adjusted) 40.6 percent of those unemployed, or 5,002,000 people. The percentage was 40.1 percent, or 4,844,000 people last month. The percentage has been above 40 since December 2009. Long-term unemployment has remained above 5 million people (except September 2012) since August 2009. These figures suggest that the U.S. economy is not creating enough jobs to hire the long-term unemployed, that weak jobs growth is only enough to keep up with population growth.
The long-term unemployed use the Social Security Disability Insurance (SSDI) disability program as a safety net when their unemployment insurance runs out. The number receiving SSDI benefits has risen by 24 percent, or 1.7 million people, since the recession began in 2007. Daniel Hamermesh, an economist at the University of Texas, said, "There are fewer of us experiencing unemployment, but those who are out are out a lot longer." And, the number of people unemployed for over 99 weeks, the point where unemployment benefits run out, has grown from 467,000 in January 2009, to the present number of 1.8 million, a 385 percent increase.
Another problem with long-term unemployment is that it can become structural unemployment, meaning that the long-term unemployed no longer meet employers' needs and/or are no longer considered employable.
It is interesting to note that, under Obama's economy, long-term unemployment has almost doubled, from 2.6 million in January 2009, to 5 million today. And his policies, such as ObamaCare, higher taxes, higher energy costs, and compulsory unionism, make that number very hard to reduce.
Note also that the long-term unemployed are not part of the U-3 unemployment rate.
Now let's examine Obama's jobs record versus what he has done with Supplemental Nutrition Assistance Program (SNAP, the new name for food stamps). According to Senator Jeff Sessions (R-AL), chairman of the Senate Budget Committee, the rate of food stamps growth has been 75 times that of job growth. Said Sessions:
"Simply put, the President's policies have not produced jobs. During his time in office, 14.7 million people were added to the food stamp rolls. Over that same time, only 194,000 jobs were created -- thus 76 people went on food stamps for every one that found a job. This is a product of low growth. Post-recession economic growth in 2010 was 2.4%, and dropped in 2011 to 1.8%. This year it has dropped again to 1.77%. Few, if any, net jobs will be created with growth of less than 2%."
According to this chart, a net of 194,000 jobs have been created, while at the same time 14.7 million people have been added to the food stamps rolls. Expressed as a percentage, food stamp rolls have increased by 46 percent, while job growth has increased by 0.15 percent. The chart is based upon the most recent figures available. There were, in January 2009, about 133.56 million Americans with jobs, and about 133.76 million Americans with jobs in October 2012. That represents a 200,000 jobs growth, or about 0.15 percent. In January 2009, 32 million people were on food stamps, while in July 2012, 46.7 million people were on food stamps. That's an increase of 14.7 million people, an increase of almost 46 percent. (Yes, some rounding is going on here!)
This chart illustrates, food stamp expenditure growth pre-dates Obama, but Obama certainly perfected its growth. In fact, Obama has spent more in four years ($290 billion, 2009-2012) than Bush did in eight years ($237 billion, 2001-2008).
Sessions' comments about food stamps and jobs give new perspective to the October 2012, employment and unemployment rates, don't they?
Just so you know, the federal government spent over $1 trillion in 2011 on welfare (of which SNAP is a part) -- that's over $59,500 per impoverished household. The median income for working Americans was about $50,000. Judicial Watch said:
"The Obama Administration has been promoting food stamps like there's no tomorrow, even offering states that sign up the most recipients cash bonuses. For example, Wisconsin got a $5 million performance bonus for its efficiency in adding food-stamp recipients to already bulging rolls."
It's no wonder that this election is so close. Obama (and the MSM) emphasize the U-3 unemployment rate, while ignoring the long-term unemployed problem, and buy votes by increasing government dependency as fast as he can.
But that's just my opinion.
Dr. Beatty earned a Ph.D. in quantitative management and statistics from Florida State University. He was a (very conservative) professor of quantitative management specializing in using statistics to assist/support decision-making. He has been a consultant to many small businesses and is now retired. Dr. Beatty is a veteran who served in the U.S. Army for 22 years. He blogs at rwno.limewebs.com