When people say the current administration is doing a good job because unemployment rates are down I wonder if they really have any understanding of how unemployment rates are calculated? Who collects these numbers?
1) Unemployment rates are calculated based on the number of NEW unemployment claims
2) Unemployment rates are calculated by the number of people collecting and filing unemployment reports.
Now, these numbers are suspect because they do not always include the long-term unemployed. What do I mean by that? Well, most states unemployment ends after 26 weeks, some go out to 12 months. Now, let’s say that you have used your 26 weeks unemployment and stop filing because what’s the point? You aren’t going to get anymore benefits.
Because you stop filing the government no longer counts you among the unemployed.
In some states the unemployment compensation is so low that if you make ANY money over $20.00 in the week you will not collect anything. Again, people stop filing. Why bother? So, the unemployment reports now no longer count you among the count of “unemployed.”
So, is our administration actually making a difference on the unemployed, or are they riding the waves of people falling off of the unemployment roles?
Sometimes it’s good to look behind the numbers and see what makes them.