Unemployment has been 8% or higher for the last 41 months and Barack Obama said in Ohio on Friday that the country is headed in the right direction. If that’s the case, I have to ask just where it is he thinks we should go?
The U6 number which includes would-be workers who have given up and dropped off the stats is pushing very close to 15%. The country hasn’t experienced such economic malaise lasting this long since the Great Depression, literally.
Increasing taxes on the rich won’t create jobs. Adding an immeasurable cost of doing business with a health care plan when we still don’t know what’s in it won’t create jobs. Blocking energy programs like the Keystone Pipeline and placing moratoriums on drilling in the Gulf doesn’t create jobs. Subsidizing green energy programs like Solyndra hasn’t created any net jobs. The Joint Economic Committee led by Congressman Kevin Brady issued a report saying that the Obama recovery now ranks dead last in modern times. Spending stimulus, housing bailouts, auto bailouts, financial bailouts, cash for clunkers, extending unemployment benefits and $5 trillion in deficit spending left the Obama recovery dead last in modern times.
If you are a President, how do you create jobs? You don’t. Business creates jobs; you clear the road stand aside and cheer. You don’t stand in the middle, over-regulate and jeer — and then blame the lack of progress on your predecessor.
The answer to the question “What is the U.S. unemployment rate?” is another question – which unemployment rate? The U.S. Labor Department reports unemployment several ways.
U-3 Unemployment is the statistic most often quoted by the press. But U-3 only counts as unemployed those people who have applied for a job in the last 4 weeks and have registered their application(s) with a government unemployment office. So what the popular U-3 statistic counts is not people who are unemployed; it counts people who are currently looking for work. There is big a difference. In fact, it doesn’t even reflect all the people who have looked for work in the last 4 weeks, only those who reported their search to the government. Job seekers who are no longer eligible for unemployment compensation and who apply directly to an employer instead of through an employment office are not unemployed as far as the U-3 number is concerned. U-3 is currently 8.2%
U-6 Unemployment counts people who have applied in the last six months and also includes people only working part time on involuntary workfare in order to qualify for government benefits. Obviously U-6 catches more of the truly unemployed. However even U-6 doesn’t include the long term unemployed or anyone not actively seeking work. U-6 is currently in the range of 15%.
In good economic periods the spread between U-3 and U-6 is much lower and therefore less important. U-6 is by far the more realistic number reflecting true unemployment. Reporting U-3 is more favorable to Barack Obama but this is not another case of MSM bias. U-2 has always been the standard reference because it is less volatile.