According to an article in the Fiscal Times today, our national unemployment rate could be as high as 19% after taking into consideration those who have stopped looking for work and those whom the Government designates as “underutilized labor,” aka full-timers turned part-time. Even though the official unemployment had gone down 0.2 percentage point from July, this decrease fails to take into account how many people simply stopped looking for jobs.
- Most analysts were expecting that the economy would add somewhere close to 125,000 jobs this month, but the economy added a mere 97,000 jobs.
- More importantly, there is currently about 5.2 million people in “long-term” unemployment, or having been jobless for over 27 weeks.
- To return to pre-recession numbers, the economy needs to create 5 million jobs.
- Unemployment for young people (20-24 year olds) have actually inched upward from 13.5% to 13.9%. About 2.1 million young people in are unemployed.
If you recall from Econ 101, Okum’s Law stated conversely implies that for every percentage point above the natural rate of unemployment, the economic output is reduced by two percentage points. With the official unemployment above 8% for the 43th consecutive months, and 10.7% at its highest, average unemployment rate since President Obama has taken office in January of 2009 has ben 9.1%. Assuming a natural rate of unemployment rate of 5% (this number is up for debate), the economy has been bleeding approximately on average 8.2% of our total GDP. Average GDP since Obama has taken office is $14.6 trillion, so according to Okun’s Law, our GDP has been bleeding on average $1.2 trillion for the last 3.5 years.
With Election Day coming up in fewer than 60 days, it is time for Americans to ask the tough questions and demand answers to the “jobless recovery” we are seeing in our economy. If one were to watch the DNC convention, one would not pick up on these dismal statistics. Rather, the DNC convention is all about dodging the issues by invoking social issues and progressive messaging of social equality, an important issue. The Democrats might make your heart flutter with excitement, but at the end of the day, it is your wallet that is bleeding, your future that is uncertain, and your government that has not been effective and accountable to you and I. I say it is time for real change and a new executive in office.