Green Room

Barack the Magician’s Latest Trick: Made a Million Workers… Disappear

posted at 10:00 pm on January 14, 2012 by

Investors Business Daily calls it, simply, “Unprecedented.” I simply call it, uhm, historic.

Initial jobless claims unexpectedly jumped by 24,000 last week to 399,000 as more workers lost their jobs, the Labor Department said Thursday. At the same time, the economy continues to lose workers.

In the 30 months since the recession officially ended, nearly 1 million people have dropped out of the labor force — they aren’t working, and they aren’t looking — according to data from Labor’s Bureau of Labor Statistics. In the past two months, the labor force shrank by 170,000.

This is virtually unprecedented in past economic recoveries, at least since the BLS has kept detailed records. In the past nine recoveries, the labor force had climbed an average 3.5 million by this point, according to an IBD analysis of the BLS data.

…According to the BLS, the “labor force participation rate” — the ratio of the number of people either working or looking for work compared with the entire working-age population — is now 64%, down from 65.7% when the recession ended in June 2009. That’s the lowest level since women began entering the workforce in far greater numbers several decades ago.

If you adjust for this drop, the unemployment rate would be close to 11%, instead of the official 8.5%.

At this rate, the completely politicized Bureau of Labor Statistics should just remove several million more workers from the labor force, so they can get the unemployment rate down to, say, 4.8%. Like it was during those nightmarish Bush years.

Related: Obama Labor Politburo Now Publishing Patently Bogus Unemployment Propaganda.

Recently in the Green Room:



Trackback URL


At this rate, the completely politicized Bureau of Labor Statistics should just remove several million more workers from the labor force, so they can get the unemployment rate down to, say, 4.8%. Like it was during those nightmarish Bush years.

Don’t give them any ideas.

HopeHeFails on January 14, 2012 at 10:41 PM

I always thought it strange that the left howled about how awful the <5% unemployment rate was when Bush was in office. In Econ 101 we were taught that 5% unemployment is considered to be full employment.

single stack on January 15, 2012 at 3:47 AM

Could someone at Hot Air complete this article?

This is intriguing and worrisome information as presented. But the article fails to take the next step and investigate what caused this loss of workers. Is it because the job market is so bad they just dropped out? Is it because we are seeing the first wave of baby boomers hit retirement age? Is is simply a result of number manipulation by BLS? If it is simply number manipulation, was there a statistically valid reason for the manipulation?

The answers matter because the cause may point to how much Obama and the Democrats have failed or may simply point to valid statistical variance.

Over50 on January 15, 2012 at 11:19 AM

When I last looked into this question, the BLS uses telephone interviews to determine its unemployment statistics. Through a series of questions, the BLS assigns the person to an employment category. One interviewer boasted that the series of questions are so oblique that when the call ends the person being interviewed has no clue how they will be classified. How’s that for statistical validity?

As for the size of the workforce I recall hearing that the economy needs to add something like 190,000 jobs/month to keep up with population growth…so the natural question is if the BLS can decide someone who is unemployed is no longer in the workforce, can it also decide that newly minted HS and college graduates or immigrants aren’t part of the workforce until they have actually held a job for some period of time?

Expect Obama to tout a 7.2% unemployment rate by next fall.

in_awe on January 15, 2012 at 3:40 PM

Here are a few very likely possibilities:
1) BLS manipulation of course.
2) Early retirement – not much job opportunity anyway, so if you have social security, some kind of pension, and some 401k/IRA this is a good time to just go play golf.
3) People are getting “black market” cash under the table jobs off the grid.
4) More people are not working at all (or #3 above) and scamming welfare, social security disability, and other such programs. I KNOW that’s happening because my brother is one – his wife is scamming ss disabilty and welfare and they live in a Gov subsidized apartment, so she won’t let him work, even though he could, because they would lose free money from Gubmint handouts.

dentarthurdent on January 15, 2012 at 4:00 PM

Just thought of another:
5) People are cutting back and figuring out how to live on just one family income because a spouse can’t find work anyway – or at least not a job that pays better than unemployment.

dentarthurdent on January 15, 2012 at 4:17 PM

@dentarthurdent, one point about your point #5: It’s not that a job won’t pay more than unemployment (otherwise, they would still be classified as unemployed), but that compensation from a job can’t overcome the expense of having a job … 2nd car, daycare, clothes, fast food, lost government handouts (your point #4) etc, etc.

Stegall Tx on January 16, 2012 at 11:26 AM

Stegall Tx on January 16, 2012 at 11:26 AM

True. I was unemployed for about 2 months total in 2008 (1 month each, 2 times), but only collected 1 week of unemployment because of severence and vacation payout. Been there, done that. And I’m making $25K a year less now than I was making 3 years ago thanks to the economy, defense budget, and the need to take a lower paying job with better benefits and longer job security.

But that’s what I mean by cutting back and making do. If only 1 spouse works, you can eliminate daycare. And I’ve been in the situation of having to cut back on fast food, restaurants, expensive coffees, etc.

dentarthurdent on January 16, 2012 at 1:36 PM

I’ve also personally known people who refused to take a lower level job than whatever they had before getting laid off. About 12 years ago, we had a temp secretary whose husband had been a corporate CFO and got laid off. He refused to take jobs offered to him like tax preparer, accountant, and other such positions because they were “below him”. After 5 months unemployed and getting a foreclosure notice, he got drunk one night and shot and killed his wife (our secretary) and himself. He could have solved their problems by taking one of those lower paying jobs.

dentarthurdent on January 16, 2012 at 1:42 PM

dentarthurdent on January 16, 2012

Generally very good points. I live in an economically depressed area (approximately 16% official unemployment) and encounter constantly the syndrome of “it isn’t worth it to work.”

The folks who call for continually extending unemployment benefits have a point: when people are in trouble they need help. But they also miss a point: when people get accustomed to relying on government assistance they tend to lose initiative, so if you continue to get paid for being unemployed it encourages you to remain unemployed.

We have created a self-destructive dynamic. Forget about Bain Capital; who up there understands that government just has to get out of the way? Nobody in Sacramento CA, I can assure you of that.

UnrepentantCurmudgeon on January 17, 2012 at 1:25 PM