Hello all,
People in the technology industry are not immune to unemployment. Being unemployed at the moment, I did a little digging into what the "Unemployment Rate" really means and how it is calculated. After several hours of looking through exactly what it means, and going through all the mumbo jumbo, it is surprisingly simple, and horrifically inaccurate.
The unemployment rate is only a percentage of people who receive unemployment. That's it. If there are 100 people, and 10 of them are receiving unemployment, then the unemployment rate is 10%. That does not mean that only 10 people are unemployed. It only means that 10 people are eligible and are receiving unemployment benefits. It could mean, and does mean, that there are more unemployed people who are simply not eligible for unemployment benefits. The actual number is alarming.
In late 2009, the unemployment rate peaked at about 10%. That means about 10% of people "qualified" for unemployment benefits. "Qualified" is the key word.
Since that time, the unemployment rate has been going down. Which, according to the news agencies, should be translated that more people are getting jobs, right? WRONG! What it actually does mean is that fewer and fewer people are able to qualify for unemployment benefits!
There are a number of factors in the mumbo jumbo that figure into all of this, but it seems that there are two criteria that seem to be the biggest.
First, a person's time on unemployment expires. It may mean that a person simply couldn't find a job in the time that they were qualified to receive unemployment, so they simply dropped off the receiving line, and therefore have been removed from the unemployment rate statistic. They are unemployed and are no longer receiving unemployment, therefore, the unemployment rate goes down.
Second, the government sets the unemployment timeline. That's right, if they want the unemployment rate to go down, simply short the amount of time a person can collect unemployment, and suddenly you have fewer people collecting unemployment, therefore the unemployment rate again goes down. In September 2013, the government cut the unemployment timeline from Tier 3 to Tier 3, thus removing 9 weeks of unemployment benefits. This essentially means that a person who was not able to find employment over a 28 week period will no longer be eligible for unemployment, and therefore will not be included in the "unemployment rate"
The third concept that is a bit gray, and most concerning to me is the self employed. If you are self employed or work as a contractor, you may or may not ever be included in the unemployment rate. If your business is down or even collapses, you may not even be eligible for unemployment and therefore not included in the unemployment rate.
A fourth concept is people making $363 a week or more are not considered unemployed. It comes to about $310 per month after paying taxes, or $10 per day. I am not sure what our government is thinking, but who can have a life and a family on $10 per day?
As I look through the numbers, I think our true unemployment, under employment rate is closer to 25%-30% across the nation. This is NOT including people who do not want to work or are 'legitimately' unable to work. I use the word 'legitimately' because I have found there are some ideas of disability and unable to work that are a bit far fetched, and tend to lean toward a sluggard mentality.
So, in a time where our government is shut down, maybe those who are employed to keep the government running should collect nothing but unemployment.
Comments?
Tom
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Tom, I have also been fascinated by the fabrication of "unemployment rate". I came to one conclusion so I called my state legislator to see if I could get the figures. I wanted to know the percent that the state income tax was down over last year. I thought this would be a good jumping off point to see how bad it really was out there. I found out that NO ONE could help me. I got passed from department to department and was told those figures don't exist. How can they not exist?
ReplyDeleteI have since moved on but your blog has stoked the fire in me again. I will let you know if I receive any satisfaction.
Good point Mike. Has the tax system become SO complex that the common person can not figure it out at the basic level? And if that is the case, maybe that is why we have become so complacent, like sheep to slaughter, and even beginning to look forward with cheerful excitement to the impending financial disasters of our country. We can't figure it out and trust that those elected officials have the country's best interest at heart in all that they do. Hum.....
DeleteAnd an important fact that most people miss is the number of people who are now on disability. I saw a graph in a financial magazine showing the rise of people not eligible for unemployment and the number of people going onto disability. The graphs went up together.
ReplyDeleteI have no doubt that unemployment and the stresses that it brings can cause mental anguish and even physical problems. But it seems to me there are way too many people classified as "disabled" just so they can receive benefits. You need look no further than the plethora of lawyer commercials claiming they can get your disability claim approved.
I am 100% in favor of helping the disabled. I'm concerned that all of the people who are not really disabled are hurting those who need it the most.
My question is how has the administration of unemployment (such as the gov't adjusting the number of weeks you can or cannot be on unemployment or the "standard of living" that they have identified) changed over the last 8-16 years?
ReplyDeleteAlso, don't even get me started on disability..... :)
Very Good Question Jenny. I didn't even think to ask that question. I just assumed that this is the way it has been done; business as usual. Has it gotten better or worse in the way they figure and calculate it? How has it all changed. I will look that up as it has me interested. Maybe it is more accurate now than in the past.
DeleteAnd the whole disability thing seems to remind me of a festering wound that is covered by a bandage. Nobody wants to take it off, but eventually it has to come off. I've seen too many things that look and seem legitimate from my perspective, and other things that make me shake my head. A short example. When I was in a certain housing development, one of the residents was getting SSI disability because he wasn't a morning person and couldn't get up for morning jobs. I asked and there is a medical condition where some people can not wake up in the morning. So, he was eligible for SSI. Why didn't anyone ask if he could work second or third shift? Just because there IS ANY condition, does it make it a disability? I have verbal diarrhea where I can't shut up, and have no filter. I tend to tell people what I really think. Maybe there is a medical condition for disability! NoShutupitis! :)