The “Official” Economic Indicators are Bogus! Unemployment Rate, Jobs Report, the Market— All Propaganda!
Americans are obsessed with economics and especially the all-important “keeping up with the Joneses” consumerist lifestyle. Rational people try to make sense of our disastrous economy by looking for cause and effect in the data. They’re looking at data from several traditional and “official” sources such as Wall Street performance, the unemployment rate, the jobs report, consumer spending, poverty, cost of living, and inflation. Unfortunately, those sources are all propaganda and not accurate by any means. Those sources of data are contrived, manipulated, and falsely interpreted to fool people into thinking that if those indicators are doing well, somehow that means we’re all doing well. And most people know better. Well, most smart people anyway.
Basic math and a little digging into the details show what’s really going on. Do the math and use commonsense.
What is the Unemployment Rate, really?
The “official” unemployment rate in the US was 3.5 percent in November 2019. According to some sources, that’s the lowest unemployment rate since 1969. But remember, the US currently has the most people living in poverty that are underemployed and unemployed in history. It’s all in how you look at the numbers.
Let me offer this explanation of why the “unemployment” and jobs reports are just fluff intended to help Wall Street confidence and keep the people lulled into a false sense that everything is going well (for Wall Street investors).
Let’s do the math (because nobody does apparently).
The US Census estimates the US population at 330 million. There are about 72 million children are under the age of 18 (330–72=258). That leaves about 258 million adults.
According to the Prison Policy Initiative, the American criminal justice system holds almost 2.3 million people in 1,719 state prisons, 109 federal prisons, 1,772 juvenile correctional facilities, 3,163 local jails, and 80 Indian Country jails as well as in military prisons, immigration detention facilities, civil commitment centers, state psychiatric hospitals, and prisons in the U.S. territories (258–2=256). Now we’re left with 256 million adults who might be eligible to work.
According to the BLS, the civilian noninstitutional population in the US is 260 million. The civilian noninstitutional population refers to people 16 years of age and older who are not inmates of institutions, and who are not on active duty in the Armed Forces. There are at any given time around 6 million 16-year-olds, and 6 million 17-year-olds. Most of them are going to compulsory school full time (260–12=248). That leaves a discrepancy of 8 million adults unaccounted for (Census 256 million minus the BLS 248 million = 8 million).
But then there’s the 22 million US Non-civilian workforce (Federal, State, Local government employees) that aren’t considered noninstitutional population. We know from census data that the US has around 256 million adults, so if we take away the 22 million non-civilians, that leaves us with 234 million people.
When you look at the data it’s very confusing and misleading (on purpose).
If you believe the BLS data, there are 260 million people in the noninstitutional work-age/eligible population category, which apparently doesn’t count non-civilians or people in prisons. If you add those under 18, prison population, and non-civilian employees, the numbers go haywire when compared to the US Census Data.
BLS Data (b for bullshit)
Total noninstitutional population 16 or over— 260 million
Minors 16 or 17 years old — 12 million (to get the 18 or over data)
Add the non-civilian category +22 million
Total employment-eligible according to the BLS =270 million
270 million adults plus 72 million minors = 342 million people in the US which conflicts with the US Census data. And that’s not counting the retired or unemployed beyond 12 months figures. The BLS claims that 95 million people are “not in labor force” but it’s difficult to calculate how they reached that number. Nevertheless, it doesn’t add up.
Census Data (makes no sense)
Census estimate–330 million people in the US
Minors under 18–72 million
Prison Population — 2 million
Government Employees — 22 million
Math: 330–72–2–22=234 million noninstitutional adults
The BLS data compared to the Census data shows a significant and unexplainable difference. The whole Census vs BLS data makes figuring out the true unemployment rate complicated.
You can see how complicated the “official” data is to sort out. The two biggest, most important sources conflict with each other. Everything has layers of interpretations to “explain” their calculations. And in the end, they make wild claims of unemployment that at face value appear to show economic stability.
But that’s all bullshit!
The Actual Unemployment Rate Calculations Minus the Propaganda
A. Total Population: 330 million (total population)
B. Available Adults: 258 million (330 million -72 million minors)
C. Working Civilian Adults: 152 million (BLS data)
D. Government Employees: 22 million (Federal Budget data)
E. Total Adults Working: 174 million (152+22)
F. Adults Not Working: 84 million (B-E)
G. Not Working: 37 million (retirement, institutionalized, or disability)
H. Total Unemployed in the US in 2019: 47 million (F-G)
Therefore, the actual unemployment rate in the US is currently about 21%, not 3.5% as officially reported. The 47 million adults are classified as “unemployed”, some of which are considered ‘unemployed for longer than 12 months” or working “under the table”. In any case, they should be reported as officially unemployed since we have no data showing they are employed.
Recap: The Unemployment Rate in the USA is 21%
To determine the actual unemployment rate you first take line B (258 million) minus lines G (37 million), which leaves you with 221 million ‘eligible to work’. In this case, you take the unemployed population of 47 million is 21% of 221 million, which means the actual unemployment rate in the US is 21%.
Labor Force Participation Rate (wtf?)
Then there’s the ambiguous “Labor Force Participation Rate”. The labor force participation rate was 63.2 percent in Nov 2019. According to BLS data, there were 164.3 million people participating, 158.9 of those actually employed, and 5.6 million unemployed (3.5%). That’s where they’re getting the official unemployment rate of 3.5% in Nov 2019.
But wait, what happened to the 47 million people who are not institutionalized, non-military, and not working? Are they not unemployed? The 3.5% official unemployment suggests that 7.7 million people of the 221 million eligible for work people are unemployed. But we know from the actual data that 40 million more people are not working (not receiving income, not retired, not institutionalized or in prison). So what is the official category of those people? Apparently they are footnotes and not officially recognized people.
Nevertheless, remember that the actual unemployment rate includes those people and is about 21% as of November 2019.
What is the Jobs Report?
Apparently some people are all excited about the most recent “jobs report” and they’re posting how great America is. Unfortunately, they don’t know basic math nor how to recognize bullshit when they see it.
The most recent jobs report claims that 266,000 new jobs were created in November 2019. OMG how exciting, right?! Not really. Because it’s actually a significant sign of how shitty the economy is, and here’s why:
Population Growth Demands More “Jobs”
The official data says that 3.6 million kids graduate from high school every year. That means that in order to keep up with the number of people entering the workforce every month more than 300,000 new jobs need to be created every month.
Let me say that again for those who quickly skipped over that figure.
In order to keep up with the number of people entering the workforce every month, more than 300,000 new jobs need to be created every single month, all year long, every year and growing each year.
For those math experts that love the jobs report, the official addition of 266,000 jobs in November was 34,000 jobs short. And being that short every month leads to a shortage of about 408,000 jobs every year (and growing). If we pretend that growth has been stabilized for the last 10 years, then we are around 4 million jobs short over the last decade, and we will be about 8 million jobs short in 10 years if population growth, automation, and robotics don’t increase the demand. If you are thinking, “shit! we’re fucking screwed” then you’re not alone in thinking that way.
What’s considered a Job today really isn’t a job by definition
The “official” definition of a “Job” isn’t the same as what 80% of the population of the United States considers a job. We all think working pays the bills and gives us the ability to live our lives. But officially, that’s not what a job is.
The “jobs report” is based on data that is hard to define which makes it easy to manipulate. A “job” is just a source of income for data purposes. An employer that hires an employee for 4 days a week for 5.5 hours per day at $12 per hour paying around $1,100 per month gross is considered a “job”. That’s a “job” according to the jobs report, but it’s not a livable wage and it’s not a full-time job. It’s not enough to “pay the bills” or to “live our lives”. So unofficially, it’s a part-time job in the eyes of the public, but it is officially, a “Job” on the jobs report.
Wait, WTF is the Jobs Report — I still don’t get it?!
It’s difficult to say really. They calculate job gains due to newly created jobs due to expansion, growth, and innovation. But they also calculate job gains by considering full-time jobs being vacated by an employee (when they quit, get fired, die, or retire). This means that if 300,000 people die, get fired, or quit, they add those 300,000 to the “new jobs created” category. I shit you not!
They don’t count job losses due to a company going out of business, layoffs, downsizing, automation and robotics replacing jobs, or outsourcing to other countries because those jobs are no longer officially available.
We know that at least 3.6 million new employees enter the job market every year because they become eligible to work due to age, high school graduation, and college graduation. And that number is growing.
We know that fewer and fewer employees are leaving work due to permanent retirement because most can’t afford to anymore. We also know that people are living longer and that workplaces are able to hire people who might have otherwise not been able to work with certain disabilities. Thus, the demand for more jobs is exacerbated and compounded.
The take away from all this “Jobs Report” talk is that it’s all bullshit.
Why we don’t hear much about the Cost of Living?
Despite the common use of the term, there is no official “Cost of Living” Index or Report. The government has a “Jobs Report”, an “Unemployment Report” and other Wall Street economic indicators, but not a “Cost of Living Report”.
Jobs and Unemployment are “corporate-wellness indicators” not “people-wellness indicators”. The cost of living would indicate the wellness of the people. That’s why they don’t report the cost of living.
“They” do report what is called, “Inflation”. Which is supposed to indicate a general increase in prices and fall in the purchasing value of money. But that often doesn’t count the cost of housing and other financial considerations. It’s more of an indicator of consumerism than an actual cost of living indicator.
The Subtle Art of Incremental Portioning
The inflation numbers don’t often consider “portioning”. Portioning has become quite common after the year 2000, but most people just take it for granted. That tiny bag of potato chips has a lot more air than it did last year, and the year before, and so on. Toothpaste has tiny bubbles and small plastic beads as filler instead of more of the product you pay for. Even food has been slowly losing nutritional value due to the loss of actual food which is being replaced by processed ‘something or rather’ filler. But the most notable feature is portioning which reduces the quantity of product inside packaging. You get smaller portions for higher prices every year but few notice the incremental change in quantity over time. We all know that manufacturers and factories cut corners to reduce their costs. They also cut quality and quantity for the same reason.
Portioning is a huge factor in the cost of living. People go to the grocery store and buy food all the time. What many have noticed is they are spending more money to buy a bag of groceries today than they did last year. That’s by design. You’re paying more money for less actual food. The package looks the same or perhaps slightly smaller, but the contents aren’t as much or aren’t as nutrient-rich as it used to be. And they cost more today than yesterday.
It’s inflation they say. But it’s a huge factor in the Cost of Living.
Unofficial Cost of Living Reports
If you see reports about increases in the cost of living in a certain area, keep in mind that it’s all based on speculation and not hard data. And that speculation could be politically biased. Often the people creating Cost of Living data fail to include all costs that most people are affected by. The biggest factor most Cost of Living estimates leave out is Housing. It makes zero sense to leave Housing out of any cost of living figure because housing is by far the most expensive and volatile element affecting most people.
The cost of living depends on where you live, but on average, the cost of living in the US is about $50,000 to $75,000 per year per person. That means that a person who has a “job” must be earning $50,000 to $70,000 after taxes to make it on their own. Therefore, if the jobs being churned out are only paying $12 an hour, those employees would need 2 to 3 full-time jobs to earn $50,000 after taxes. At 3 full-time jobs a person is working 120 hours a week, or roughly 71% of their entire life which amounts to 17 hours a day. It’s really not possible to be a healthy human being and work 120 hours in a 7-day week. Keep in mind that working 120 hours a week all year long at $12 per hour is just $70,000 a year before taxes. That lifestyle is not sustainable.
Because we have more than 300,000 people entering the job market monthly, and there are only 266,000 possibly part-time jobs being created, then we really need more than 600,000 jobs to be created to afford the cost of living at the wages most employers are offering.
Let me say that again. If there are only 266,000 jobs created monthly, and people that are entering the workforce need 2–3 full-time jobs, then we really need twice as many jobs as are being created, plus the number of shortages in jobs times two. Yes, we’re screwed unless we come up with a better way to manage an economy in our country.
Suffice it to say that we should start by creating an official Cost of Living Index and manage it with accurate data. That would be a great start.
What is the Rate of Poverty?
Nobody can live in America on what the US Government claims the “poverty level” wages are. Only in America would the Federal Department of Health & Human Services have official “poverty guidelines” that label a person earning less than $12,490 per year as living in poverty. But a person earning more than $12,490, but less than the Cost of Living is not poor.
Put another way, if you can’t afford to pay all your bills and sustain yourself financially then you’re not living in poverty unless you make less than $1,040 per month. More specifically, if your rent is $1,000, and all your other costs are $500 per month, and you make $12 per hour (minimum wage in California) and on average you get 30 hours per month ($1,440/mo gross wages minus taxes = $17,280/year — $1272/mo takehome after taxes) or up to 40 hours per month $1,920/mo gross wages minus taxes = $19,856/year — $1,654/mo takehome after taxes) and can’t afford healthy food, can’t afford to spend any money on entertainment, car insurance, a cell phone, holiday gifts or celebrations, or to save money for retirement or emergencies — you’re not considered poor in America by any official standard. Despite being short every month on your bills and living a meager existence, and probably going deeper into debt to survive, you are officially NOT living in poverty.
But the facts outweigh the official propaganda. You are unofficially poor in America is you earn less than the cost of living. Period. Full stop! If anyone says anything different they are selling you a line of crap.
What are these miracle Trade Jobs?
Reality TV star Mike Rowe is well-known for his effort to revive the American work ethic by promoting hard work and trade jobs. What he got wrong was the idea that people need to find trade jobs and work harder first, and then businesses and the economy will fall into place after that. That’s not the way it actually works. Businesses and the economy need to set the stage for higher pay, more safety net, and reduced financial impact during job transitions and training. If the economy made it possible for most people to work hard and get ahead, then that would be a path to achieve the “American Dream”. But that path died 40+ years ago. It’s been a long-buried fantasy for decades that few still believe in, and even fewer realize.
Whenever you hear or read about unemployment or poverty in America, there’s always somebody suggesting that all those poor people could immediately raise themselves from the darkness of extreme poverty merely by ‘working harder’ or by getting Trade Jobs (ie. plumbers, electricians, roofers, painters, etc).
There’s a lot of negativity behind that person’s suggestions that are based on ignorance. So let’s put that completely flawed notion to rest once and for all:
Most of the “skilled trade” jobs require skills to get the job and offer zero “no experience necessary” trainee jobs. Despite the minuscule number of employers that pay living wages to skilled workers, the vast majority don’t pay enough to live a sustainable life and maintain an ever-increasing financial portfolio and retire.
Less than 1% of all job opportunities are trade jobs and 90% of those require the applicant to have experience and be fully trained. When you hear people claim “but but but I saw job ads” they’re not grasping the big picture.
There aren’t enough trade jobs to meet the needs of the 25% actual unemployment. Right now, 400,000 new jobs are needed monthly, and fewer than 3,000 new trade jobs are created monthly across the USA.
There aren’t enough trade jobs for 3.6 million who enter the job market every year. As mentioned before, there isn’t enough even if trade jobs paid well. The big picture is that we need all jobs to pay enough to cover the cost of living.
Trade jobs are in rapid decline because automation and robotics are replacing those jobs fast. So convincing young people to go into the “trades” is a death sentence as far as careers go. In 20 years most jobs will be replaced by robots and automation. An 18-year-old today becoming a plumber is doomed to be an unemployed plumber at 40.
If there truly was a high “demand” and a low “supply” companies that need skilled trade employees would be paying $100,000+ to start with complete training programs and full benefits. But because they’re not, there really isn’t a lack of skilled tradespeople or the principal of supply and demand is a hoax.
Trade work is often at the whim of demand for service-related work, ie. roofing, plumbing, glazing, carpentry, manufacturing, etc. That type of work is often seasonal and subject to long periods of low demand and short spurts of high demand thus giving the amateur “pro-trades commenter” a false sense of demand. Most of the trade jobs are “flexible schedules” with less than 40 hours a week, and periods of layoffs are commonplace.
Pay for trade jobs isn’t going to “drag the masses out of poverty”. Trade wages hover around $15 to 30 per hour and rarely go higher than that. The places where demand for trades still exist are also dealing with the high cost of living and high rents, so the trade pay isn’t going to earn you a big house, vacations, and savings for retirement.
There’s nothing wrong with people who desire to go into trade work but there’s definitely a disconnect from reality by those who glorify the trades and mistakenly think it’s a solution to joblessness and poverty. The whole “skilled trades” argument is propaganda to keep economic slavery going strong.
What is this “working harder” thing?
Rugged Individualism — working harder hasn’t resulted in making more rich people. If it did, millions of hard-working immigrants would be driving around in expensive cars and living in rich neighborhoods. So get that “working harder” nonsense out of your head, and every time you hear someone say that bullshit, call them out. Working harder does not equate to any longterm improvement in an individual’s life.
Gross Domestic Product (GDP)
There are two ways to measure GDP and both ways fail to measure the actual quality of the economy. The first is by measuring all income that corporations earn minus taxes and labor costs. The other way to measure GDP is to measure expenditures; what corporations spent, net exports, investments, and government spending in a year.
GDP data are measurements of Wall Street economics. None of that measures the actual Main Street economics. GDP doesn’t accurately measure the poverty or prosperity of the people.
I can hear all the economic majors sigh reading this. But their entire belief system and faith are solidly planted in the roots of their cultural conditioning which is flawed, inaccurate, and contrived.
Fact: GDP is not a measure of the economic condition of the people.
Why do people care about the “official” economic indicators anyway?
Most people don’t. Most people are too busy working or struggling to earn a living. Most people are too reluctant or just don’t have the time necessary to wade through the propaganda and a lifetime of cultural conditioning that’s been blocking any rational discussion of main street economics and the cost of living.
Most people have lived with the official story of capitalism and the official economic indicators for so long they can’t even image it might be a lie. In fact, most people reading this article will probably dismiss it as theory without digging deeper for themselves. They will go on with their lives within the constraints of the facade we call the “US Economy” according to their “official government reports”.
Main Street Economics
The real world happens in the streets. You can’t tell how much your Apple stock went up today by watching people walk by through the Starbucks window. But you can tell a little more about the economy by how many people stop to toss a few coins in the can in front of the ‘homeless’ guy leaning against the window outside in the rain.
Main Street economics is a portrait of America from the perspective of Americans. Official economic indicators can’t accurately describe the plight of everyday Americans. Ask any day-trader in New York how folks in Albuquerque, New Mexico are doing, and they have no clue despite their in-depth understanding of the market today.
Many pundits and even journalists claim to grasp economic realities in the US and they point to the economic indicators I have mentioned earlier. They share the data for homelessness, poverty, unemployment, and jobs, but they fail to accurately provide a glimpse of the reality most Americans are living in today.
The reason is simple: The “Official” Economic Indicators are Bullshit! The Unemployment Rate, the Jobs Report, and other Market indicators are all contrived propaganda.