Incorrect Unemployment Figures in the US

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ADP is a payroll company, and they report numbers on employment, joblessness and unemployment to the press. Their numbers are compared to government numbers, and lo & behold, the employment numbers in the housing sector aren’t syncing with the government’s figures.

If you don’t want to read the article below, you should read the following quote:

The report says the government overlooked job losses, partly because the first workers fired by struggling companies are likely to be immigrant day laborers, some of them illegal in this country, who normally don’t ask for jobless claims or show up for unemploym ent benefits.

Why hasn’t building bust brought more layoffs? – CNBC TV – MSNBC.com

What does this mean to you? It means that you can’t tell how strong the economy is based on media reports and reported data. Go figure, right?

Now for the HR geek stuff: the Bureau of Labor Statistics (BLS) is responsible for tracking the American workforce and reporting on the state of employment and unemployment in the US. This is the agency that reports on the unemployment numbers, but it never quite tells us the amount of people who are underemployed. I’m struck by how out-of-touch BLS has been during the past six years of the Bush Administration.

I’m not here to bash BLS, but I am here to say that someone in Washington prefers the status quo instead of shaping the agency into a forward-thinking, proactive piece of our government that can actually do something useful with accurate data. Unfortunately, BLS operates as an outdated relic that reflects an economy of yesteryear. The monthly report on employment data that you’ll hear on the nightly news (currently 4.7% unemployed) gives us old-fashioned employment numbers in a new, global economic environment.

What bothers me most is that the definitions of employment, unemployment, and the ‘overlap’ are inadequate and misleading. For example: I may be unemployed and available, but I won’t take a job for $7.00 because I previously earned $300,000 annually (this is slightly exaggerated by a few bucks). Does that mean I have opted out once my unemployment insurance benefits have expired because I am not actively considering a job at Burger King? (Answer: Yes.)

We have workers entering & leaving the job force with more frequency and in new (and sometimes unique) ways. From mothers who are pushed out in their 30s to older workers who pursue a second career due to pension issues or incomplete health care coverage, the BLS needs a new and more accurate way of reporting true unemployment data.

Some HR professionals suggest that we need better meta-data to understand when and why Americans are unemployed beyond the traditional twenty-six-week period of unemployment insurance benefits. I suspect that BLS has much of this data and we’re only one or two Dell servers away from the government’s ability to perform better data mining. If Citibank knows that I buy cat food on a bi-weekly basis and sells that data to Purina, the government ought to provide better & more thoughtful labor statistics.

Again, Washington — and our corporatist society — often prefers the status quo. The economy is great! Record low unemployment!

Unfortunately, the government’s numbers aren’t syncing with payroll numbers, and no one seems to really care.

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