Tea Party Patriots Bringing the Conscience of America to Washington DC
The employment situation is worse than what is being reported, and this should have the people disgusted, including supporters of the Democratic Party. There has been a large effort by pundits in the media to tout the current performance of the economy, particularly in regards to the employment situation. When in the course of the debates that the people of this country have, it has become increasingly easy to determine who is biased, and who isn’t. CNN, MSNBC, the New York Times, the LA Times, the Washington Post, the Chicago Tribune, and the major networks are the outlets that are guilty. This is not to state that Fox News isn’t biased, but they are in no way as blatantly out of control as the previous examples given.
As a writer, I do not find it enjoyable to have to be a voice that the media refuses to be. The unemployment rate is not the only item in the Bureau of Labor Statistics report that needs to be considered in order to conduction a thorough economic analysis. I tend to believe that the people of this country have the common sense to conclude more truthfully: at least when there are a few minutes set aside to think about the issues at hand.
The most recent employment situation report includes data that is damming evidence that the economy is not performing as well as it did between 2001 and the beginning of the recession in late 2007. The beginning of it has been acknowledged, but that alone does not lead to the conclusions that many in the media are making. It is politics, and I realize that, but there is something about the word honorable that is lacking in the establishment type politicians.
By December of 2008, there were approximately 7.5 million jobs that were added over the 8 year period according to the household data available from the Bureau of Labor Statistics. The establishment is in contrast with this, and that is acknowledged. The household data is what is used to calculate the official unemployment rate. It was 7.2% at the end of 2008, which was lower than at the end of 2000. That is not an indicator that leads to an automatic conclusion that there were fewer jobs. In the same period of time the labor force grew from 141,489,000 to 154,447,000, an increase of 12,598,000 persons or 9.16%. Since the beginning of the recession the labor force has shrunk back to 153,886,000 people. That is a modest drop, but over a 3 year period, that is an indicator that there is something wrong. To give that a perspective, at a labor force of 154,447,000, it would take 154,447 new jobs to decrease the unemployment rate of 1/10th of 1% if the labor force does not grow at all. It has decreased by 561,000. That isn’t a large number is good enough for almost a .4% difference in the actual unemployment rate. What is worse though is that the population has grown by a whole lot over the same period.
At the beginning of the recession, the non-institutional population was 233,156,000. The non-institutional population includes everyone 16 years of age or older who are not disabled, incarcerated, in mental hospitals, or otherwise not deemed fit to conduct labor. That has grown to 242,269,000. The rate of growth in the labor force and jobs is highly disproportionate to the increase in the eligible working population, also known as the non-institutionalized population. It should not be assumed that all of these new persons would join the work force, but there is validity to using his figure, because the employment to population ratio and participation rates are calculated as a percentage of the non-institutionalized population. When the recession began, the participation rate was 66.3%. That has declined to 63.7%. The non-institutional population grew by 9,113,000. 66.3% would be the participation to shoot for since that was what is was when the recession began, would it not? That would be 6,049,919 people. That would push the unemployment rate up by almost 6% from where it is now, or to more than 14%. That does not include those marginally attached to the work force 2,809,000. That would push the unemployment rate to more than 16%. Then, if the 7,724,000 people working part time due either slow business conditions or the unavailability of full time work so they took part time work instead. Figuring 30 hours per week, which would decrease the figure by 66.7%, would push the total unemployment rate to more than 18%. The total economy would then be short of jobs, to reach 5% unemployment, by 10,861,906 jobs. To just catch up with that, it would require 181,032 jobs per month for five years just to catch up to that, while the population continues to grow.
The employment to population ratio is another figure altogether. It determines the ability of entitlement spending to be lowered because when more people are working, less people need Food Stamps, Medicare, and other government services. This presents a dilemma. Entitlement spending has to be cut, but as long as people remain unemployed, it is nearly impossible to cut entitlement spending back politically, particularly with a highly biased and unethical media. The employment to population ratio has declined to 58.5% in January 2012 employment situation report from 62.7% in December 2007, the month that the recession began. In order to have a 66.3% participation rate and a 62.7% employment to population ration, and a 5% unemployment rate, there would need to be a total of 7,595,133 jobs and all of the part time jobs that people had to take due to slow business conditions or the lack of full time work would have to become full time, which take the number to approximately 10.2 million more jobs than we have currently. That is barely statistically different from the 10,861,906 jobs mentioned earlier of less than one half of one percent difference.
Not to be pessimistic, but when that is applied to the current average hourly wage at the current average of 34.5 hours per week worked, it totals a shortage of $23.25 per hour, it represents a shortage of annual income to people of $237,150,000,000. When multiplied by the current velocity of money of about 5.1, that reduces the current GDP by a little more than 1.2 trillion dollars over 12 months. That is roughly a 6% decrease from what it otherwise would be. This is demonstrative of the fact that a 1.7% growth in the GDP in 2011 is not even 1/3rd of what is needed in order to get people back to work in the United States.
This information is all provided by the Bureau of Labor Statistics, but there still is a task that is demanded by those hoping for a more responsible media. Regardless of who gets the nomination of the Republican Party to challenge Barack Obama in November, what follows needs to be taken seriously by everyone in the United States.
The Obama campaign will most likely try to use the numbers in the establishment data to manipulate the opinions of the general public, and it this artifice that needs to be taken on directly by the people. If the establishment data was used, it would indicate a bleaker scenario than what actually occurred from 2001 through the beginning of the recession. Even though it is easy to counter the allegations that will be made, and the invectives, the Social Security Administration and the Center for Medicare and Medicaid Services annual reports for 2011 support the fact that there was quite a significant increase employment between 2001 and when the recession began. Revenues to the Trust funds in both programs increased by between 30% and 31% from 2000 through 2007. It was by a total of $130,000,000,000 higher in 2007 than in 2000. That represents approximately a 30% increase in revenues while wages only increased by a little more than 10% between 2000 and January of 2012. That supports a sizable increase in employment between 2000 and 2008, but Obama is going to try to get away with manipulating the data.
The left and Obama will try to lead the people to believe that what did happen didn’t. It doesn’t matter who the GOP nominee is, and let’s make one thing very clear. Being behind by 10.2 or 10.6 million jobs, either one, in this economy is not a recovery. In order to keep up with the population it will take about 300,000 jobs per month over five years to achieve a full recovery, starting right now. That has not started yet. And even if the labor force increases faster because the people start to feel confident about the job prospects, it will not necessarily be a bad thing, but what is a bad thing is if the unemployment rate goes down due to a decrease in the labor force. The conclusion that is founded upon the truth is the truthful conclusion. A preconceived notion based on non-truthful information that is given, leads to non-truthful conclusions.