
  Mint Explains Why The Real Unemployment Rate Is 17.2 Percent  - transburgh
http://www.techcrunch.com/2009/12/04/real-unemployment-17-2-percent-mint/?utm_source=feedburner&utm_medium=feed&utm_campaign=Feed%3A+Techcrunch+%28TechCrunch%29&utm_content=Google+Reader
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jordanb
U6 isn't the "real unemployment rate," it's just the loosest definition of
"unemployment" that the BLS calculates.

It's much higher than U3 because the definition is so much more broad. It is
also, of course, much higher than U3 in good times as well as bad.

The cartoon tries to assert that U3 is not valid because it excludes people
not actively looking for work, etc. While it's true that there are
deficiencies in U3 (and that is the reason why the BLS continues to publish
U4/5/6), the primary purpose of U3 is to provide an economic indicator, so we
can tell if things are getting better or worse.

U3 is a less subjective definition than U4/5/6 and is more reliant upon
primary data, rather than data from sampling-based surveys. It's the broadest
definition of unemployment for which the available data is very robust, and
thus less likely to drift due to sampling problems. Robustness is a very
important quality for an indicator, whose primary purpose is to be compared to
itself at some other t.

U4/5/6 are important to keep in mind, but calling any of them the "real"
unemployment rate is disingenuous. Any one of them would be inferior to U3 as
"the unemployment rate indicator."

~~~
joe_the_user
Your argument fails take into account the fact that the unemployment rate is a
highly politicized figure in which the adjustments are by no means all for
statistical accuracy.

The discussion of employment and unemployment at the Shadow Government
Statistic website gives a good overview of this topic. See
<http://www.shadowstats.com/> (I've given the home page since they discourage
deep linking - the article is at article/employment).

Of course, the original Mint discussion was hardly better than the parent's
argument.

~~~
jordanb
My "argument" is simply to state that U3 is a measure defined so that it can
rely on population (not sampled) data. This is done precisely to reduce the
amount of processes error and bias.

The definition of U3 leaves little room for adjustment, and that is
intentional.

If you were worried about "manipulation," then U4/5/6 are much more open to
manipulation than U3 is.

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jws
_Mint explains…,_ then why is the link to techcrunch? Perhaps
<http://www.mint.com/blog/trends/unemployment-rate-video/> would be nice.

It isn't a pure link jacking, the tech crunchers did add a pair of facts from
today's announcements.

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martythemaniak
Today was NFP day and the newest statistics should have set off bells for
anyone reading them. A lot of people are already aware of the difference
between the U3 and U6 unemployment rates, but consider this:

-11000 jobs were lost in November

-there have been net job losses every single month since Jan 08

\- the unemployment rate officially fell from 10.2 to 10.0 today.

This is kinda like saying a function's value has started growing while its
first derivative is still negative. Reeks of bullshit through and through.

~~~
cynicalkane
Unemployment counts the number of unemployed active job-seekers, not the total
number of people without jobs. It says so right in TFA.

~~~
electromagnetic
The loss of jobs could easily have led to parents switching from 'employed' to
'home keeper'. I know people who have been fired, and because the cost
differences between child care and income are negligible, they're better off
being unemployed due to lower taxes.

~~~
josefresco
"I know people" unfortunately does not support your argument well.

~~~
mnemonicsloth
"The loss of jobs _could_ easily have led to parents switching..."

The point of speculation is that it doesn't require support.

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andreyf
Somewhat aside: what software do people use to create cartoons like this?

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patrickgzill
Surprised no one pointed out <http://www.shadowstats.com/alternate_data> which
indicates 22 per cent, if the stats today were calculated using the pre-
Clinton administration method.

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gcheong
I'm wondering if I get counted as part of the officially unemployed as the
little checkbox that asks you to give details of your job search contacts for
the past weeks has never been checked on any of the UI claim forms I received.
This is in CA.

~~~
gojomo
The U3 official rate is based on a household survey, _not_ any unemployment
insurance claims. So whether you're collecting unemployment insurance,
whatever you report on the forms, and even whether your unemployment insurance
runs out has no bearing on the rate.

Instead, it's a statistical projection based on the surveyed households self-
reported employment/looking-for-employment status.

(So you weren't _literally_ counted unless the survey contacted you, but you
were _statistically_ counted as long as their sample was representative.)

------
josefresco
It's the relative change that's important. Doesn't really matter what 'scale'
you use, the change in % is what is most telling about where we are headed.

