If you look at the official unemployment numbers without questioning the data, unemployment seems to be sinking. In May employers added 288,000 jobs and the unemployment rate fell 0.4 percentage points to 6.3 percent. It looks like the country is finally recovering from the recession. But taking those numbers at face value is a mistake.
A deeper look into the unemployment statistics reveals not only that the “official” numbers are misleading, but also that the state’s attempt at controlling and managing the economy is an abject failure. In April 800,000 people left the work force. Almost a million people simply stopped looking for work. Additionally, the number of jobs added is too little to keep up with the nearly 7 percent increase in population growth.
Now, to a normal person, these statistics seem like a bad sign — a sign that job growth is not occurring and the economy is still in the gutter. But, in a crusade against common sense, government and media emphasize a statistic that makes everything look much less gloomy than it actually it is. This statistic that everyone refers to improves when the labor force drops.
The most popularly used unemployment statistic only accounts for the labor force and how many people in the labor force are jobless. When someone stops looking for work, they leave the labor force. This makes unemployment go “down,” despite no one getting a job. The person is still unemployed, but the statistic shows their joblessness as an improvement. This leads to the national conversation about economic growth running completely backwards. Pundits and politicians talk about how low the unemployment rate is and the amount of people who left the labor force is conveniently forgotten.
When the labor force dropped to a mere 62.8 percent of the population in April, tied for the lowest rate since the 1970s, the official unemployment statistic also dropped. More people left the labor force so less people were considered unemployed. The increasingly smaller percentage of people considered in the labor force, not economic growth is driving the increasingly lower unemployment rate. But the state doesn’t want you to notice.
This bizarre construction of unemployment statistics could be construed as the mere stupidity of the state. After all, it’s portraying an illusion. The truth is buried deep below the official statistic. But it’s actually genius. States would fall if the truth about their existence came out. While states are terribly pathetic at running economies, they are supremely good at creating propaganda. Especially when that propaganda conceals the true effects of state intervention. The state created the recession through an inflation-driven housing bubble. Then it worsened and prolonged the recession with bailouts and new regulations. Now the state has convinced people it has fixed the recession using, among other things, a misleading unemployment measure.
The state demands unquestioning obedience. That’s why the administration touts this statistic and ignores other, less generous (but more accurate), unemployment measures. If people learned unemployment numbers were just propaganda, they would lose confidence in the state: Specifically in its success at fixing the economy. This would be a huge constraint on the kinds of policies the state could pursue. If people were intellectually radical and questioned the state, the state would lose all its power.
C4SS.org contributing author Cory Massimino lives in central Florida, studying economics at Seminole State College. He is the Associate editor of DL Magazine, a contributing editor of The Libertarian, and also blogs at Students For Liberty.