When Down Is Up

Trey Smith

It is getting more farcical each month as the previous month's labor statistics are made public. For example, in March, a mere 88,000 net jobs were created. This number is FAR BELOW the amount needed simply to keep pace with population growth. In other words, 88,000 is not enough to break even -- not even close.

It would follow logically that, if we aren't keeping pace with population growth, the unemployment rate would go up. But, of course, we are told the exact opposite. Instead of going up by a few tenths or an entire point, the "official" rate dropped by one-tenth. How can this be?

The answer is the same as it has been for several years now. The federal government is able to keep the "official" unemployment far lower than it actually is by simply not counting all the disillusioned workers who have given up on trying to find meaningful work! With good paying jobs still scarce in many areas of the country, we are talking about a significant segment of the working population.

As Robert Oak of The Economic Populist points out, "The labor participation rate just hit a record low, not seen since May 1979 when many segments of the population were still quite discriminated against in the workforce." As of last month, we had a labor participation rate of 63.3%. That means that 36.7% of working age adults are unemployed! More than one-third of the potential workforce!

If more than one-third of the potential workforce doesn't have a job, how then can the "official" unemployment rate keep going down? In a word, it can't...unless some good old Orwellian "logic" is applied liberally!