I recently learned that the unemployment rate is calculated based off of active job seekers in the last four weeks. WHAT?!? So the unemployment rate could, and does, go down because people STOP looking! Not because someone actually got a job; although i'm sure that happens occasionally. If the unemployment rate goes up that could actually be a positive indicating of an improving economy because it would mean people have hope that they'll find a job.
And how in the world can one accurately measure who is looking for a job? What a joke!
If we calculated unemployment the same way we did in the 30's....we'd be close to 20% right now. Difference is that in the 30's, we were an agrerian society. Most people could still grow food (remember the Walton's?). Unemployment fluctuated between 12-22% then. We are worse off now, imo.
The true rate of those who are unemployed, and those who have simply stopped looking is at the highest rate in thirty years. I think we should be careful to note, however, that this way of reporting did not start with the current administration.
True. The calculation was first changed under Carter....and adjusted a number of times since. I'll have to look up the most recent changes by Obama. I don't remember...but recall it was a substantial change. And yes, the Bush admin changed it as well. Posted via Mobile Device
Why isn't unemployment calculated by the number of people receiving unemployment? Posted via Mobile Device
Probably not the official answer, but its likely due to the temporary nature of unemployment payments in the past. Many people ran past the deadline before finding a job. Plus, many do not qualify for unemployment payments, depending on the reason for the termination, or length of employment before termination.
You have to discount 'structural unemployment' which is the flip of 'full employment. Keynesian economics suggests full employment is around 4% unemployment so the structural unemployment rate would be 4%. A 10.2% unemployment rate would therefore be ~6% unemployment above the structural floor. In the EU structural unemployment is generally assumed to be in the 12-15% range or higher. So in places like Spain, while a 25% unemployment rate sounds bad, the 'real' rate is around 7-10%. Of course in the EU there are generations of people who've NEVER held a job. In the UK there are about 400,000 households where no one in the home has EVER held a job, 2 or even 3 generations of people.
Yeah, its not a joke. It is a well defined measurement that can help illustrate trends over time.
As you are finding out.. the exact meaning of the term may not be what you consider to be common sense... but it is useful for what it is... and also from quickly available data.
For example.. the 'employment' numbers (partly taken from payroll processing firm ADP) never seems to jibe with the 'unemployment' numbers because the sources are incomplete and they measure different things.
It would be a mistake to just assume they are 'useless' however. A better tact would be to understand the numbers better and then you will know what you are looking at... without all the political spin. For example - all military personel count as 'employed'. 100%. Its not right or wrong, its just part of the equation.
Beaureau of labor statistics says that 'statistically' the numbers are about 90% accurate base on the sample data they use.. but what they measure may not so accurately reflect preconceived notions that are in peoples heads.
And if you think about it, you really shouldnt be counting people that are both not working, and not looking for work. You dont know their motivation for stopping looking. Maybe they hit the lottery. Maybe they have decided to take up pottery. Maybe they are taking an early retirement. Maybe they are taking a year off to hike the appelachian trail. Maybe they are frustrated job seakers. Maybe they are taking time to build an addition on their house. You have no idea.
I got hit hard by the unemployment crisis. The job I have been doing for over 20 years has for the most part been sent overseas thanks to FTP and email. I am a computer graphics/Desktop publisher. 10 years ago, I was making excellent money until the global thing hit. Now, I cannot find a firm who has an in-house graphics department. All that kind of stuff is created in China and India. Corporations save big bucks by doing this, but they are ruining our country by putting talented people out of work.
Thankfully, when we were doing very well financially, we paid off our cars and our house so all we have to worry about is food and utillities. We were lucky. I know at least 5 close friends that have lost their houses.
To make money, I sell everything I ever owned on Ebay. Me and hubby used to be pretty well off financially. Extravagant vacations, jewelry, designer clothing, designer purses, etc. Thankfully I have a lot of stuff to sell, but one day everything will be gone. It's sad but necessary.
When I do get an elusive interview, I am constantly told I have too much experience. However, I make it clear that I will take a rookie's pay, figuring an employer would not have to train me on software, etc. and get a person with 20 years and a degree for chump change. Even that doesn't work.
Unemployment rate is a useless statistic 
