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[Labor Dept: 873,000 people come "off" the unemployment line but only a little over 114,000 jobs were "created"? Luckily I found a transcript of a conversation between two eminent economists discussing this very question!]
COSTELLO: I want to talk about the unemployment rate in America.
ABBOTT: Good Subject. Terrible Times. It's 7.8%. ...
COSTELLO: That many people are out of work?
ABBOTT: No, that's 14.7%.
COSTELLO: You just said 7.8%.
ABBOTT: 7.8% Unemployed.
COSTELLO: Right 7.8% out of work.
ABBOTT: No, that's 14.7%.
COSTELLO: Okay, so it's 14.7% unemployed.
ABBOTT: No, that's 7.8%.
COSTELLO: WAIT A MINUTE. Is it 7.8% or 14.7%?
ABBOTT: 7.8% are unemployed. 14.7% are out of work.
COSTELLO: If you are out of work you are unemployed.
ABBOTT: No, Obama said you can't count the "Out of Work" as the unemployed. You have to look for work to be unemployed.
COSTELLO: BUT THEY ARE OUT OF WORK!!!
ABBOTT: No, you miss his point
COSTELLO: What point?
ABBOTT: Someone who doesn't look for work can't be counted with those who look for work. It wouldn't be fair.
COSTELLO: To whom?
ABBOTT: The unemployed.
COSTELLO: But ALL of them are out of work.
ABBOTT: No, the unemployed are actively looking for work. Those who are out of work gave up looking and if you give up, you are no longer in the ranks of the unemployed.
COSTELLO: So if you're off the unemployment roles that would count as less unemployment?
ABBOTT: Unemployment would go down. Absolutely!
COSTELLO: The unemployment just goes down because you don't look for work?
ABBOTT: Absolutely it goes down. That's how the current administration gets it to 7.8%. Otherwise it would be 14.7%. Our government doesn't want you to read about 14.7% unemployment.
COSTELLO: That would be tough on those running for reelection.
ABBOTT: Absolutely.
COSTELLO: Wait, I got a question for you. That means there are two ways to bring down the unemployment number?
ABBOTT: Two ways is correct.
COSTELLO: Unemployment can go down if someone gets a job?
ABBOTT: Correct.
COSTELLO: And unemployment can also go down if you stop looking for a job?
ABBOTT: Bingo.
COSTELLO: So there are two ways to bring unemployment down, and the easier of the two is to have administration supporters stop looking for work.
ABBOTT: Now you're thinking like the Economy Czar
COSTELLO: I don't even know what I just said!
ABBOTT: Now you're thinking like our President.
Comment: HT
Grif.net
Mortimer Zuckerman: The Great Recession Has Been Followed by the Grand Illusion - Don't be fooled by the latest jobs numbers. The unemployment situation in the U.S. is still dire.
ReplyDeleteFebruary's headline unemployment rate was portrayed as 7.7%, down from 7.9% in January. The dip was accompanied by huzzahs in the news media claiming the improvement to be "outstanding" and "amazing." But if you account for the people who are excluded from that number—such as "discouraged workers" no longer looking for a job, involuntary part-time workers and others who are "marginally attached" to the labor force—then the real unemployment rate is somewhere between 14% and 15%.
This is really informative. Now I understand the right way of getting the real rate of unemployed. Well if more and more jobless people have stop searching for job, it will make the rate of unemployment go down. It maybe a good news but that is not the right way to do so.
ReplyDeleteBeing able to address our problem with unemployment is the best thing to do to address other issues such as crime and malnourishment.
ReplyDelete