Purtell column: Big numbers, little truth
Published 12:00 am Sunday, May 10, 2015
With the release of April’s national unemployment rate Friday, the usual examination and scrutiny wasn’t far behind.
The national figure released by the Bureau of Labor Statistics was 5.4 percent, certainly not close to the true level of unemployment — likely around 10 percent.
Writers and pundits said the 223,000 jobs created in April were a sign the nation’s economy might be out of the funk it was in during the first quarter of the year. Of course, we’ve heard lines similar to that one far too often over the last five or six years. Jobs are added, but not enough. People are working, but not seeing wage increases.
One figure that the BLS produces each month shows the number of people, age 16 and over, that are not in the labor force. For April, the number was 93.1 million — a new record high. In fact, the figure has been steadily climbing since 2005, according to the BLS.
Do a little searching online and one can find this number in headlines on a number of media sites — mostly conservative ones. The shock value draws people in.
At the Drudge Report, a very popular news aggregator site, the 93 million figure was at the top of the site in red text Friday afternoon. The text linked to a story on an economic blog called Zero Hedge.
Several other sites had stories about the number Friday. But what does the figure actually represent?
Here is how the BLS defines someone not in the labor force: Persons who are neither employed nor unemployed are not in the labor force. This category includes retired persons, students, those taking care of children or other family members, and others who are neither working nor seeking work.
OK, so that 93 million number includes retirees and students. But how many retirees and students are there? In 2013, the Pulitzer Prize winning site Politifact.com looked at this very question. Back then the figure was 90 million people not in the labor force. The site found that about 9 million 16 and 17 year olds were enrolled in high school, 21 million people were enrolled in college and 40 million people had reached the retirement age: 65 and over.
Add up the numbers and you get 70 million people who are not in the labor because they’re either in school or possibly retired. In most of the stories about the 93 million people not in the labor force, these statistics aren’t included.
There are about 320 million people in the United States with an estimated 250 million people over the age of 16 and considered eligible to be part of the country’s labor force. If we take the 70 million people who aren’t in the labor force for good reason from the 93 million we get 23 million, which is about 9.2 percent of 250 million.
The real problem is that the labor force participation rate is dropping. This figure represents the percentage of the population, 16 and over, who are employed or looking for work. The figure was 62.8 percent in April. It was 65.2 percent in April 2010.
Some economists say the declining rate shows the number of new jobs isn’t keeping up with population growth.
As for tossing around the 93 million number, shock value may be good for getting people to click on a web link, but it doesn’t do any good if readers aren’t being properly informed.