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Be aware of ‘phony’ jobless stats

Don’t be fooled by jobless rates that send messages of improved employment here and elsewhere in the United States. While the local jobless rate is going down, so are the number of jobs and probably the number of people still seeking work.

Statistics we reported in the 2017 Almanac, an annual special section that was published earlier this month, are clear that the total workforce numbers are on the decline and have been since 2009. In fact, they’ve dropped every single year from the 222,100 workforce in 2009 in Trumbull and Mahoning counties to 198,100 last year. At the same time, unemployment rates for the same geographical area dropped in half from 13.2 percent in 2009 to 6.5 percent last year.

The issue is not unique to the Warren-Youngstown area.

Despite enormous criticisms President Donald Trump has received, his description of the nation’s unemployment rates as “phony” numbers may be right on the mark. Trump’s comment came after the Bureau of Labor Statistics reported the nation’s unemployment rate had dropped to 4.7 percent during former President Barack Obama’s presidency.

We have no doubt the BLS reported an accurate statistic as derived from the formula accepted by the federal government for calculating unemployment. But, as we previously have pointed out, the formula is badly flawed.

For one thing, it does not take into account people who have become so frustrated in looking for work that they have given up the search.

A much more accurate picture of joblessness can be gained from another statistic, the workforce participation number. In essence, it is the percentage of working-age Americans who actually have jobs. That number has been decreasing since 2000 — but began a sustained nose dive in 2009, when Obama took office.

In February, the U.S. labor force participation rate had sunk to 63 percent — down three full points during Obama’s tenure. More than 7.5 million working-age adults did not have jobs.

So while the unemployment rate report may have been accurate, it was far from the full truth.

editorial@tribtoday.com

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