Unemployment 11.9% not 9.1%

There are several ways to calculate unemployment. The current way that the U.S. Department of Labor (DOL) uses drops people from the unemployment rolls after four weeks of not looking for a job. There are literally millions of people out there who want employment but have given up.

There are also several bloggers who have calculated the “real” unemployment rate to be 15%, 20%, 25%, whatever. I have little faith in others but I am fortunate enough to where I have the education and background to dig myself.

The method I like to use is to compare today’s economy to the April 2000 economy when the civilian participation rate (CPR) peaked at 67.3%. This is realistic and does not assume economic performance that has never been achieved. We have achieved a 67.3% CPR and federal consumption of 18.2% of the GDP (it is currently 25%) and benefited from it under the Gingrich/Clinton regime.

Using conservative numbers comparing 2000 to 2011 the DOL is not including 2,679,733 people in its calculations. This is very conservative and does not attempt to include underemployed workers. Giving the benefit of the doubt to the DOL the true unemployment rate, using April 2000 as a base line, is 11.9%.

Perhaps the most disturbing look at this is the labor force growth rate of 1.45% since 2000, or about 0.1% a year. Clearly the Keynesian economic policies of Greenspan, Bush, Obama, and Bernanke have not delivered.

Civilian employment taking a giant leap backwards