Big Red Car here. The Boss has been driving me hard because of the perfectly lovely weather here in the ATX. I love it. Wind whipping around and growling along.
So The Boss is talking with his friend about unemployment. Suddenly, The Boss says: “Cut the crap, unemployment is still a huge problem. Let me show you.”
The inanity of “adjustments”
No government bean counter is ever happy to just give you the raw data — they have to adjust it because you are too stupid to understand the raw data. OK?
In the course of making adjustments, some adjustments get made and institutionalized for reasons that are just dumb. How dumb?
One man alone can be pretty dumb sometimes, but for real bona fide stupidity, there ain’t nothin’ can beat teamwork.
Adjustments and other sleight of hand
Well, maybe not. Here goes.
There are two common measurements of unemployment that sometimes work their way into polite conversation: U-3 and U-6.
1. U-3 is what I call the stupid standard as it is absolutely NOT accurate. It is what is in the newspapers and what the government wants you to think is the right standard.
You may call this the T-ball standard. Everyone gets a hit, everyone gets on base, nobody is ever out, everyone goes out for ice cream and everybody gets a big trophy.
Like T-ball, it is not really true to life.
2. U-6 is the standard for folks who can handle a bit of the truth but really need sunglasses to look directly at it.
The Boss calls it the — “hey, does my unemployment look fat in these numbers?” Hell, yes!
U-6, what the heck is it, Big Red Car?
U-6 is U-3 as your main course plus a couple of side dishes.
1. U-6 includes “marginally attached” workers — folks who have looked for work sometime in the last year.
2. U-6 includes “discouraged” workers — folks who have given up looking for work.
3. U-6 includes folks who have had to settle for “part time” work because they cannot find full time work. This is the nuclear physicist flipping hamburgers.
But what it still does not include are workers who do not fit in the above categories but who have been on the unemployment rolls for more than 52 weeks.
Hmmm — so if you are unemployed for more than 52 weeks, then you are dropped off the rolls? YES, says the Big Red Car.
Now why is that important?
Here’s why it is important.
Today you can receive up to 99 weeks of unemployment. That is right — 99 weeks of unemployment but they disappear you off the rolls at week 52.
One more time — if you are unemployed you can get 99 weeks of payments but you are considered MIA at week 52 as if you had MAGICALLY become employed.
But even better — you are no longer considered as part of the unemployed and you are no longer in the workforce.
U-7 the right number
U-7, the older and smarter sister of U-6, adds back in the magical number of folks who are still unemployed after week 52 meaning those folks who MAGICALLY disappeared when they hit week 52. The unemployed, still collecting benefits, Missing in Action.
Well, Big Red Car, this is a very discouraging little graph, is it not?
What is shows is that some realistic measure of unemployment in the United States — this meanspirited little U-7 which apparently counts the actual unemployed — is almost 22% of the labor force in the United States.
Why, Big Red Car, that’s more than twice the 7.9% U-3 rate that was in the newspaper. Indeed. U-3 is unemployment if it looked like say, Kate Upton. Tarted up a bit. Made to look much better than it really is. U-7’s sluttly little sister and not the girl YOU are going home with tonight.
Did you see that sexy…………………………………………………………convertible? Haha, you crack me up, Big Red Car.
But, hey, what the Hell do I know anyway? I’m just a Big Red Car and I’m hustling to keep this job.