Monday, September 16, 2013
Pants on Fire
Regardless of the political rhetoric, the USA is experiencing a long-term unemployment crisis. The average unemployed American has now been out of work for a longer period than at any time since records began being kept more than 60 years ago.
There is a simple reality that is intentionally overlooked, but it cannot fool informed Americans. In 2006, the absolutely horrible numbers revealed that 26 million Americans were on food stamps. Today, the number has risen to 48 million. Yet, the government tells us the unemployment rate has vastly improved. Not so.
Unemployment rate is calculated by dividing the number of unemployed individuals by the number of people in the labor force. For example, if the labor force consists of 100 million people, and 10 million of those people are seeking jobs but remain unemployed, the unemployment rate would be 10%. But here lies the problem. If millions of people lose their jobs and do not file for unemployment benefits, the government still counts them as part of the employed labor force and does not add them to the unemployment rolls, so as not to alter the unemployment rate. Now, with Obamacare kicking in, employers are cutting employee hours so they don’t have to pay medical insurance. The government, however, still counts the newly created part-time jobs as employment.
I guess the plan is simple: Give everyone in America a part time job, and no one will be unemployed. Yet, somehow settling for food stamps to supplement a part-time job filling buckets with fried chicken parts does not sound like a great plan for the future.