[TriLUG] OT: PT One tech issue from tonight's debate

[David Burton]

[Part 1 of 2]

A big part of the problem is that the overall job market in America is
dismal.  Since January 2009, we've added about 9 million new 16-and-over
Americans, and about zero new jobs (3/4 million if you believe the very
suspicious preliminary BLS Sept. household survey jobs report, which
everybody thinks will be revised downward).

Civilian employment has barely changed at all compared to Jan. 2009.  But
working-age population increased by 243,772,000 - 234,739,000 = 9,033,000
(just over 9 million people).

So if working age population increased by 9 million, and employment
increased by less than 1 million, you might wonder how it can be that the
government is not reporting a huge increase in unemployment?

The answer is that over 8 million of those 9 million additional people
aren't counted in the labor force.  That's because the "labor participation
rate" (LPI), which is the percentage of working-age Americans who
are considered to be in the labor force (either working or looking for
work), is sharply down.

Look at the "not in labor force" numbers reported by the BLS for 9/2012
compared to 1/2009.  The number of working-age Americans not in the
workforce increased from 80,599,000 to 88,710,000 a difference of 8,111
thousands (i.e., 8.111 million people).

If you were to add those 8.111 million people to the 12.088 million
officially unemployed, you'd calculate an unemployment rate of:
(12.088 + 8.111) / (155.063 + 8.111) = 0.123788 = nearly 12.4%

However, that's not really correct, because the increased number of
discouraged workers isn't *entirely* due to the decreased labor
participation rate.  Part of that increase is simply due to the increased
population.  Even if the labor participation rate had remained unchanged,
the number of discouraged workers would increase proportionately with the
population.

So, you're probably wondering (if you trust the Sept. 2012 figures), what
would the unemployment rate be, if the labor participation rate
(percentage) had been unchanged from Jan. 2009?

[...continued...]