Unemployment Rate Falls, Masks Real Problem

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Unemployment Rate Falls, Masks Real Problem

America’s labor force shrinks as millions of discouraged workers give up hope.

The United States unemployment rate decreased to 6.1 percent during August, according to the Bureau of Labor Statistics. This slight decrease left a staggering 9.5 million individuals unemployed. Yet you wouldn’t know it judging by how the unemployed spent their time.

One is classified “unemployed” if he has actively sought a job over the previous four weeks. But this number gives an incomplete picture of America’s employment problem. According to the August Bureau of Labor Statistics (bls) report, over 92 million people of working age who are not participating in the labor force are not considered “unemployed.” They either didn’t actively seek a job in the last four weeks or retired.

The labor participation rate has slowly declined since 2008. Nearly 35 percent of the population did not participate in the work force as of August 2008, but this figure expanded to 37.2 percent in August 2014. Over the last six years, the labor participation force has contracted by 2.3 percent.

Over 100 percent of the decline in unemployment in the past year is due to people dropping out of the labor force, rather than strength in the economy!
Mike Shedlock
It is this declining labor force participation rate that is obscuring America’s true employment problem by making it look like there are fewer unemployed. When people give up looking for work, the government no longer counts them as unemployed, so the unemployment rate appears to improve. As economic analyst Mike Shedlock explains: “Over 100 percent of the decline in unemployment in the past year is due to people dropping out of the labor force, rather than strength in the economy!”

With so many people unemployed, you would expect them to be doing their best to locate a job. The bls conducted an American Time Use Survey (atus) among the 9.5 million unemployed. The study sought to measure how individuals divided their time among life activities. Randomly selected atus respondents were interviewed to see how they spent their time—where and who they were with on the previous day.

The study produced startling results. A mere 18.9 percent of individuals actually looked for a job the previous day. Those actively looking for work only averaged 2.48 hours per day seeking jobs.

Nearly 97 percent of the unemployed respondents spent 5.93 hours on leisure, relaxation and socializing. Individuals spent twice as much time socializing as they did job hunting.

As famed industrialist Andrew Carnegie said, “People who are unable to motivate themselves must be content with mediocrity, no matter how impressive their other talents.” One cannot expect to succeed in finding a job if he is unmotivated to work to find one.

The atus study also showed that 28.1 percent of individuals have given up on the daily requirements of personal hygiene. These individuals reported to not have washed, dressed and groomed themselves on an average day.

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Rejected from numerous positions, many unemployed have lost hope of finding a job. But as Winston Churchill said, “Success consists of going from failure to failure without a loss of enthusiasm.”

In today’s tough job market, one cannot afford to give up and blend in with the rest of the crowd. To find a job, one must actively pursue it and stand out from the rest of the applicants. As the old adage says to the unemployed, “Make a job out of finding a job.”

If you are unemployed, defy the prevailing trend. You can read “Despite High Unemployment—Here’s How to Find a Good Job!” to improve your chances of finding employment in these volatile times.