Unemployment – Are the numbers right?

Last week I posted about Unemployment. I  talked about how the government gets the numbers that we hear in the news. Today I want to start talking about a couple of places where these numbers get off track from the jump.

When you boil it all down, it really comes down to one thing: PEOPLE LIE!

 They may lie because they are proud or they may lie because they are greedy. When it comes down to it, the lack of absolute truth when someone from the BLS calls to inquire about your employment status causes the numbers to be wrong.

Liar’s in this case come in two forms – the Cheater and the Proud.

The Cheater creates what we call Phantom Unemployment.  These are people who say they are unemployed but aren’t really seeking work. They cause the Unemployment figures to be quoted higher than they really are.

Let’s say you are, umm, I dunno, my sister. You have a history of taking temporary jobs and working just enough that you don’t get fired, but not enough for the job to rehire you at the end of your term. Once they don’t re-up your contract, you qualify for unemployment.

You like free money as much as the next girl, so you do the bare minimum to “look” for a job so that you can continue getting your unemployment benefits, not really planning on actually finding a job and ***having*** to work.

When the government calls you randomly and asks if you have a job. What do you tell them?  You tell them you don’t have a job. Duh


Next they ask you, “Are you looking for work?” Here you have two choices as a rational individual.

  • Do you tell them you are chilling at home and not looking for a job? Of course not – you are getting unemployment benefits. Telling the truth risks losing your unemployment benefits as well as possible criminal charges because every time you claim your unemployment check, you certify that you are looking for work.
  • Do you tell the easy lie? Yes you mess up the numbers, but you are looking out for #1 or your happy ass would have really been looking for a job in the first place.

Once you go with the lie as most people will, you end up being classified as Unemployed as opposed to NILF (that’s Not In Labor Force for all of you American Pie Fans). This means that you have Inflated Unemployment Rate to be reported as HIGHER than it should be.

Next time we will look at the Discouraged Worker and how pride causes the Unemployment numbers to be reported  lower than they really should be.


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