As previously noted in a prior thread, Unemployment has gone down to 9.7%. The Administration is likely to hail this as a good thing and the msm is going to praise the administration and the stimulus. They will, saddly, ignore the most horrible peril this particular drop in unemployment foreshadows.
Before I get relegated to the Tin Foil Hate Brigade, let me explain.
A report came out stating the unemployment dropped to 9.7% which is finally below the 10% we were at (though still higher than the 8% we were warned it may reach if we didn’t do the stimulus), but there was also a report referenced in this same article stating that we also lost 20,000 jobs.
How then, one may ask, can you lose 20,000 jobs and lower the unemployment rate? (And why is this horrible news?) The unemployment rate listed is not the number of people unemployed, despite the name, but is the number of people in the united states getting unemployment benefits. People not receiving unemployment benefits are not a part of this number. That is the difference between the Unemployment Rate and Real Unemployment.
In most states, you qualify for 25 to 52 weeks of Unemployment Benefits. Some states provide more, some less. Once you run out of those benefits, you are no longer considered to be “looking for work” and are therefore no longer part of the Unemployment Rate. Two things happen at that point. First, you no longer receive the income from the Unemployment Benefits. Second, you drop off the Unemployment Rate number just as though you got a job.
However, you didn’t get a job. You no longer have any income.
Now, we lost 20,000 jobs. Our current number of unemployed is 14.8 Million (receiving Unemployment Benefits) per the Bureau of Labor Statistics findings. Since those 14.8 million people are 9.7%, it means that there are about 152,577,319 jobs, of which 20,000 jobs is about 0.01%. This means that unemployment raised about .01%.
Here is where the danger comes into it. Instead of rising by .01%, unemployment dropped about .3%. Doing the basic math, about 473,000 people are no longer on Unemployment. I would wager good money that many, if not most, did not find employment and, instead, are part of the soon-to-be-growing group of people who lost their job in 2009 and are no longer about to collect Unemployment.
This is just starting. Things are already tight and the economy is not being expanded by private spending. As the number of people no longer able to collect unemployment grows, the “Unemployment Rate” will drop, and there will be even less income in many American households. This loss of income will lead to even less private sector spending. Manufacturing and services will find more and more red and there will be more layoffs.
Yes, America, the Unemployment Rate dropped .3% in a month, and it is one of the more horrible things that could have happened.
Tags: Unemployment
