One of the most monitored US statistic — and one frequently used for political gain — is the Unemployment Rate. It sounds simple enough (and actually should be) but when bureaucrats and politicians got their hands on it, it’s merely a shadow of itself.
Here is a Mainstream Media article on the most recent Employment Report (just released), plus the Whitehouse spin on it…
Believe it or not (as this superb article explains), there are now SIX different US unemployment rates! Here are the latest (2023) government data for all six. The popularly referred to rates are 3.6% (U-3: unemployed) and 6.9% (U-6: out of work).
However, there is another large fly in the ointment: the unemployment rates (by-and-large) do not count illegal immigrants. When that number was low, it was ignored, as it was considered to be just statistical noise. Since 2020, that is no longer the case, as the current data says some six (6) million new illegal immigrants are in the US, just from the Southern border!
A reasonable estimate is that 4± million of these are people who would be normally considered as part of the labor pool. The approximate size of the US citizen labor pool is 165 million. So the 3.6% (U-3) means that 6± million US citizens are unemployed.
Let’s estimate that 1± million (out of the 4± million employable) of the new illegal aliens are gainfully employed. That leaves 3± million who would be considered unemployed. None of those are considered in the government statistics… Put another way, the U-3 statistic goes from 6 to 9 million (i.e., a 50% increase: 3.6%—> 5.4%). The U-6 statistic would likewise go from 6.9% to 8.7% (i.e., an increase of 1.8%)
The point here is that these immigration corrections are rather sizable, so if the government is claiming to be doing its best to keep citizens accurately informed, (e.g., about our economy) they should include this information in their calculations. Maybe I missed it, but I was unable to find that…
In this vein, I can’t resist plagiarizing this prior Abbott and Costello spoof:
COSTELLO: I want to talk about the unemployment rate in America.
ABBOTT: Good Subject. It's 3.6%.COSTELLO: That many people are out of work?
ABBOTT: No, that's 6.9%.COSTELLO: You just said 3.6%.
ABBOTT: 3.6% are unemployed.COSTELLO: Right, 3.6% out of work.
ABBOTT: No, that's 6.9%.COSTELLO: Okay, so it's 6.9% unemployed.
ABBOTT: No, that's 3.6%.COSTELLO: WAIT A MINUTE. Is it 3.6% or 6.9%?
ABBOTT: 3.6% are unemployed. 6.9% are out of work.COSTELLO: But if you are out of work, you are unemployed.
ABBOTT: No, Biden said you can't count those "Out of Work" as the unemployed. You have to be looking for work to be unemployed.COSTELLO: BUT THEY ARE OUT OF WORK!!!
ABBOTT: No, you miss his point.COSTELLO: What point?
ABBOTT: Someone who isn’t actively looking for work can't be counted with those who look for work. It wouldn't be fair.COSTELLO: It wouldn’t be fair to whom?
ABBOTT: The unemployed.COSTELLO: But they are ALL out of work.
ABBOTT: No, the Unemployed are actively looking for work. Those who are Out of Work gave up looking. If you give up, you are no longer in the ranks of the Unemployed.COSTELLO: So if you're off the Unemployment roles that would count as less Unemployment?
ABBOTT: Yes, unemployment would go down.COSTELLO: The unemployment rate goes down because you don't look for work?
ABBOTT: Obviously. That's how the current administration gets it to 3.6%. Otherwise it would be 6.9%. Our government doesn't want you to read about 6.9% unemployment.COSTELLO: Why don’t they include illegal immigrants in the employment data?
ABBOTT: Because that would make unemployment rates much worse!COSTELLO: That would be tough on those running for reelection.
ABBOTT: Duh!COSTELLO: So that means there are three ways to bring down the unemployment number?
ABBOTT: Yes.COSTELLO: Unemployment can go down if someone gets a job?
ABBOTT: Correct.COSTELLO: And unemployment goes down if citizens stop looking for a job?
ABBOTT: Bingo.COSTELLO: And unemployment also goes down if the government doesn’t fully include employment data about illegal immigrants?
ABBOTT: You’re a genius.COSTELLO: So citizens who support the current administration can help bring unemployment down, by stopping to look for work.
ABBOTT: Now you're thinking like the Economy Czar.COSTELLO: I don't even know what the hell I just said! ABBOTT: Now you're thinking like some of our current leaders!!!
PS — This relevant article just came out today: Doing statistics can be difficult but understanding them can be fairly simple…
Here are other materials by this scientist that you might find interesting:
My Substack Commentaries for 2023 (arranged by topic)
Check out the chronological Archives of my entire Critical Thinking substack.
WiseEnergy.org: discusses the Science (or lack thereof) behind our energy options.
C19Science.info: covers the lack of genuine Science behind our COVID-19 policies.
Election-Integrity.info: multiple major reports on the election integrity issue.
Media Balance Newsletter: a free, twice-a-month newsletter that covers what the mainstream media does not do, on issues from COVID to climate, elections to education, renewables to religion, etc. Here are the Newsletter’s 2023 Archives. Please send me an email to get your free copy. When emailing me, please make sure to include your full name and the state where you live. (Of course, you can cancel the Media Balance Newsletter at any time - but why would you?
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John, I think the number of illegals you cited (6M) is low. Many more have reportedly crossed during the Biden regime (over 8M I think). What period are you addressing with that number?
john-- this is a good piece, but i have a few questions
U-6 doesnt appear to include U-3, so the suggestion might be that actual unemployment would be the sum of U-3 and U-6. am i understanding that correctly?
i also get the absurdity of saying when people who looked for work give up looking for work this reduces unemployment
however there are some economic issues to consider here
are people who give up looking for employment really not working? what if they decide to go into business for themselves, either as freelancers or by starting a small business? what about women who often leave the workforce and return to domestic work for their husbands and/or families? that is not strictly-speaking 'employment' but it is absolutely a form of work in economic terms and i'm not sure how to best handle it statistically
i do think there would be economic value in a statistic that would report a fraction, the numerator of which is the number of people who want to find work but have not found work, and the denominator of which is the sum of the numerator and the number of people who are employed. it's just very hard to measure how many people want to find work, and i can understand different ways of trying to do that
i also think another statistic would be useful, and i'll call that an employment rate. the idea is to report what portion of GDP is wages. i my view, the lower this number is, the happier people tend to be and the more robust the economy tends to be compared to those based on lots of capital-intensive activity and international trade. for that i might reference nassim taleb's concept of 'anti-fragile.' in other words, when people give up looking to be servants who want to be told everything they have to do and instead work productively outside of the employment situation without being told what to do, that's a favorable point for 'the economy', even if it means GDP goes down. so we're talking about an economy based on small farms, small business, and entrepreneurs
it's a change of topic, but my points about reducing dependence on employment are completely aside from the intense and mounting over-regulation of the employment relationship, beginning with barring race, sex, disability and other forms of discrimination in hiring and otherwise deviating from entirely voluntary at-will terms, pro-union laws that force employers into bargaining with a collective, unemployment taxes where people who work have to pay people who dont work for not-working, disability insurance that forces healthy workers to pay for unhealthy workers to not-work, mandatory health care, mandatory vacations or child care leave that impose automatic and opaque wage reductions, mandatory breaks and working hours and on and on. you look at the cumulative burdens on employment and it's amazing anyone ever hires anyone
i am not opposed to large business and i am opposed to the kinds anti-trust measures we see coming from the EU right now. i am also opposed to subsidizing any businesses and the overregulation of the employment relationship is effectively a negative subsidy favoring very large businesses
well how is that, you may ask, since it's very large businesses that have the most concentrated reliance on their employment pool? the answer is that most regulatory burdens on employment decrease substantially at scale. therefore every new burden makes it harder for small business to compete with larger businesses or even to start up
so the way it works now is you subsidize larger businesses by regulating employment, and then you punish these same large businesses with tyrannical 'anti-trust' actions for achieving the market dominance you helped them achieve by regulating employment