Education Career Services

January 13, 2009

The Ever-Unreliable Unemployment Rate

An extremely gifted professional writer (Robert Swanson) jotted a few lines regarding the unemployment rate — take a few minutes to review:

It’s become a figure of terror; misunderstood and wrongly applied, it initiates panic in the populace.  News commentators raise it on a pole and predict the economy is going down for the last time…

 

That’s a lot of power to give an undifferentiated Unemployment Rate.  As of this writing, the UR is at 7.2% (please, no screaming allowed). 

Always concerned for the unemployed (at least those who want to be employed), a good understanding of the Unemployment Rate is necessary to retain hope and stave off discouragement. urgraph

 

The US Department of Labor conducts a monthly survey of 60,000 homes, categorizes each person over 16 as part of the Labor Force or the unemployable.  They do so by asking the unemployed if they are looking for work, and if they have, in fact, actively looked for work in the last four months.  Then they add up those in the Labor Force and the portion unemployed and wizard up the UR.

 

So, assuming .0015 of the population is a good sample (it isn’t) and assuming everyone tells the truth (they don’t), the UR is still a useless number, it doesn’t tell you who is unemployed. What percentage of your demographic is unemployed?  Do executives make up that number or do minimum wage workers?  What age?  Even the Department’s breakdown is vague (two categories for age; 16 to 19 and 20 on up).

 

The DoL claims to weed out the unemployable, composed of those physically and mentally unable to work.  Unfortunately, the people interviewed in the poll may not classify themselves thus.  Further, people on assistance programs who have no intention of working, claim they are looking for employment to retain eligibility of benefits (which is not to say all those on assistance fall into that camp).  Thus the numbers are skewed by the mentally ill and infirm who simply don’t realize they are unemployable, and those protecting their aid eligibility.

 

Further, unemployment is fluid, not static.  People transition from job to job; are the 7.2% unemployed the same individuals unemployed during the same time last year?

 

The simple truth is no statistically miniscule sample is going to be accurate, and even if it was, it is a number of averages, and you are far from average, right?  Do not be discouraged by the UR.  Jobs are out there.  Companies may not be advertising them, but they still need quality people.  Consider the early 80’s when the UR was at an all-time modern high of 10.5%; innovation reigned within the marketplace.  The PC was invented and refined; consumer electronics shrank in size and grew in quality.  CD’s were invented.  Almost every sector innovated new products and channels leading to a giant drop in unemployment, because the market needed people to manage, expand, and improve business.

 

Do you find it difficult to proceed with hope?  Perhaps you’ve been that rare individual stuck in unemployment despite impressive skills?  Or maybe you think you’re going to be in that small percentage soon as companies restructure to weather the present storm?  Consider that you’re not the problem; it could be your approach! 

 

Navigating the job market is a full time job.  You may need help to create a winning strategy and there is plenty help out there.  If you have any questions, do contact me and I will be glad to assist in any way possible.  

 

NEVER give up hope! 

 

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