End inflation of unemployment numbers

by Brody Burns

MCT Campus
MCT Campus

One of the most pertinent issues facing the country is the staggering unemployment rate. Since January of 2009, the unemployment rate hasn’t been below 7.8 percent. The corresponding 32 months have been the longest continual period during which the unemployment rate has stayed above 8 percent since the ‘30s. Rates of this magnitude haven’t been felt since the 1979 energy crisis and the following double-digit inflation period of the early 1980s. During that time period, unemployment rates of more than 8 percent only lasted 27 months. Our elected officials must acknowledge the severity of the unemployment crisis and apply appropriate efforts to solve the issue. The unemployment rate should stay on their collective résumés, shining as a beacon of the quality of their work.

Recently, President Barack Obama took to the airwaves to stress the urgent need for job creation, in his unveiling of The American Jobs Act.

“The purpose of the American Jobs Act is simple: to put more people back to work and more money in the pockets of those who are working,” Obama said. “It will create more jobs for construction workers, more jobs for teachers, more jobs for veterans and more jobs for the long-term unemployed.”

The act is estimated to cost $450 billion, providing $250 billion in employment tax breaks and another $200 billion in spending on public works projects, unemployment benefits and aid directly given to the states. Official estimates place the number of jobs created through the act at 1.9 million.

For all of the optimism throughout his speech, White House officials released an interesting report detailing the future of unemployment in America during the next 10 years. In the 2012 Mid-session Review released by the Office of Management and Budget, unemployment is forecasted to stay above 6 percent until 2016. The OMB is notorious for underestimating unemployment; according to its 2006 review, unemployment for the past three years should have been 4.9 percent. So it should be taken with heavy skepticism that anyone truly accepts the OMB’s predicted rate of 6 percent in 2016.

The U.S. Bureau of Labor Statistics recently reported the official unemployment rate for last month was 9.1 percent. The labor force in the United States grew to 153.6 million during the month, meaning there are technically only 14 million Americans who are currently unemployed. This is only a portion of the tragic labor situation.

The major problem with these proclamations or any government reported figures is the reporting of unemployment is very deceiving. The real unemployment figure gets manipulated in order to become more appealing. The federal government often doctors the country’s unemployment rate like Heidi Montag’s plastic surgeon puts Montag’s face under the knife. The problem? The end result is as fake as it is overtly harmful.

The reported unemployment rate fails to incorporate what it deems as “discouraged workers,” those who aren’t looking for a job because they feel none are available for them. When discouraged workers are included, the unemployment rate is 9.7 percent. Next, it also omits people “marginally attached to the labor force,” which include those who are willing and able to work, but haven’t looked for work within the past year. Incorporating “marginally attached,” unemployment actually stands at 10.6 percent. Finally, there are the “underemployed,” those persons willing to work full-time but only working part-time because of prevailing economic conditions. Adding in the underemployed, with these two other segments, the unemployment rate is actually 16.2 percent. That’s more than 24 million Americans who are unemployed or underemployed. This statistic may actually underestimate the true number of unemployed Americans, as the BLS openly acknowledges these figures are only estimates.

In an equally compelling move, the U.S. Congress did enjoy its 2011 summer recess from Aug. 8 through Sept. 5. In what can only be deemed as our representatives feeling themselves to be over-employed, the legislative branch of our federal government also plans on taking a recess from Sept. 26 through Oct. 2.

In any public appearance, or in the company of anyone unfortunate enough to hear, congressmen will expound on the urgent need to help the unemployed. The talking points will spew from their mouths like vomit, hitting on key phrases such as the embodiment of the American Dream, or a grandiose speech claiming it’s time to restore America to its rightful power. These should only be viewed as complete lies and outright false statements, as any genuine concern would provoke action. It is incredibly difficult to fix a problem when you’re not working. Below is the rationale the U.S. Senate provides for taking a recess, according to its website.

“In 1970, finally facing the reality of long sessions, Congress mandated a summer break as part of the Legislative Reorganization Act. Today, the August recess continues to be a regular feature of the Senate schedule — a chance for senators to spend time with family, meet with constituents in their home states and catch up on summer reading.”

If our representatives are too busy to attend to such an impactful problem, then we should lay off another 535 Americans — our U.S. Congress. Then they can face the devastating prospect of being unemployed.

—Brody Burns is seeking a master’s in business administration.