Saturday, January 11, 2014

6.7% Unemployment!!!

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The Bureau of Labor Statistics announced on Friday that Unemployment in the United States fell to...  6.7%!!!
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Yes, join with me now as I / we bask in the warming glow yet another of the Obama Administration's Economic Recovery Successes!!!
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Feeling better?  
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Super
Man


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The only problem is that while 'Numbers do not lie', people sometimes DO.  
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And a "government of the people, by the people, for the people" pretty much has 'people' written all over it.  Particularly when 'some people' are in charge.
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DISCLAIMER:  If you've been reading my scribbles for a while you know that I an NOT found of Math.  
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Why?  
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Mostly because Math requires rules, strict compliance of those rules, and mostly because Math does not typically lend itself to humor.
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The operative word in the prior paragraph, as you may have guessed (since it's in bold and italicized), is 'typically'.  
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When Math is used by the Federal Government to describe anything, 'Math' is in need of a shave.  Government Math tends to get 'Fuzzy' when caressed by the gentle hands of the friendly folks at the BLS (the Federal Bureau of Labor Statistics)...
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DISCLAIMER ENDS...
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The Internet, TV, and Newspaper headline from Friday's BLS release is, "Unemployment Falls to 6.7%!"
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But digging down a bit below the surface we find that, unlike the Common Core Mathematical illustration above, not all numbers are 'equal'.  
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WARNING - BASIC MATH FOLLOWS!
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Buttercup and Bossie own a dairy farm called B & B Dairy.  They employ 98 other cows to make a product which we'll hypothetically call...  Milk.
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With 100 cows on staff, B & B Dairy has all the cows they need to make their product.  Since they need 100 cows to be at full production, they are also at 'full employment'.
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Then something terrible happens, some people buying B & B's milk turn out to be...  
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Lactose Intolerant!!! 
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With demand for milk falling, Buttercup calls a meeting with Bossie and they decide that they need to scale down production to meet the needs of the diminished milk market.  
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Ten cows get the proverbial (and unfortunately, literal) axe, and 'full employment' at the B & B Dairy is now set at '90' cows.  A REAL 10% reduction in employment, but if you ask the cows running the place, things are going 'just great' and they are still running with employment set at 'FULL' based upon the 'New Normal' Employment level.
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Two months later a new competitor enters the market making 'Milk' from Soy.  Why?  I have no idea as it sounds disgusting to ME, but there are some folks out there who are now Lactose Intolerant and feeling that they need to save the Earth from needless Methane gases which occur as a by-product of cows eating, digesting, and then, 'tooting' happily in the fields.
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NOTE TO SELF:  We'll need to tax this Methane gas production to punish dairy farmers for supporting their families  

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SECOND NOTE TO SELF:  Too late, someone already thought of it 
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Buttercup tries to schedule a meeting with Bossie, but Bossie is in Hawaii for most of December and she's temporarily unavailable during this, her 'umpteenth working vacation of 2013'.  
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Instead of meeting face to face, Buttercup decides to 'Skype' Bossie via that 'Internet thing' and they hold an emergency conference and decide that they need to reduce milk production once again.  They believe that they will only need the production of 75 cows to meet the needs of the remaining 'milk-drinkers' in their market.  
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Two weeks later, fifteen additional cows are sent to the "White Castle in the sky" and full employment for B & B Dairy now sits at 75 'head'.
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TWO COW TALES:
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WORKING COW PERSPECTIVE - If you're a working cow, you can accurately state that 25% of your friends and co-cows were 'laid off', 'butchered', or otherwise have involuntarily 'moo-ved on'.  You also probably spend a lot more of your day looking back over your shoulder(s) than you used to.  
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You know that employment at your dairy has been reduced from 100% to 75%.  
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Why?  Because even basic cows can do basic Math.  
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If, however, you are one of the 25% of cows 'let go' by B& B, you pretty much don't think nothin' at all because you're at 165 degrees resting between a couple of hunks of bread, adorned with lettuce, tomato, pickles, onion, special sauce and American cheese (ironically made by the dairy 'just up the street').
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DAIRY OWNER PERSPECTIVE - Buttercup and Bossie are still doing 'just fine'.  The B & B Dairy is still at full employment because they 'wrote off' 25 cows they no longer felt were 'necessary' for the greater good of the Dairy.  
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Yes, revenue is down due to a drop off in Milk sales, but they've also reduced their expenses since they have to purchase less hay for the other workers in the yard.  They've also discovered that White Castle really 'likes' getting its hands on excess un-necessary staff so they're contemplating additional 'Reductions in Force' next quarter, pending the results of their test marketing of a new Almond Milk product they're working on.  

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They don't really understand why anyone would drink it, but they've come to accept that humans are pretty much 'nuts' and will race to embrace anything new, and environmentally-friendly, at least until they realize that it tastes more like WD40 than it does... 'milk'.       
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Yeah, sure, 25 percent of their workforce is gone, but as far as they are concerned, Buttercup and Bossie's Dairy is at 100% employment.
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The End...
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Epilogue 
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The BLS, much like these Evil Capitalist Cows above, work their Unemployment Numbers similar to how Buttercup and Bossie do.  The BLS estimates (based upon a 'random sample' of 60,000 households) the number of people working in the labor force.  They also (think B & B Dairy's 'White Castle' example) eliminate workers from the work force who they feel have stopped looking for...  work.
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These workers simply CEASE TO EXIST from the herd.  They are no longer counted.

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Why is this a big deal?

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Because in order to get to the reduced unemployment rate of 6.7% the Bureau of Labor Statistics ERASED 5 workers for EVERY 1 worker finding a job in December.  
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In 'real numbers' this means that while 74,000 jobs were CREATED in December of 2013, during the same period, 347,000 workers LEFT THE WORKFORCE (you know, to the...  White Castle). 
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Instead of referring to our current unemployment rate as a by-product of the "Obama Recovery", perhaps we use the B & B Dairy analogy above and should begin referring to it as the "President Obama's White Castle Recovery Plan"?
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You should be feeling a sense of Deja' Moo right now

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Oh, and speaking of Recoveries, I found this spiffy little graph that plots employment recoveries of each 'Post World War II Recession'.   It charts the length, depth, and strength of employment recovery following each Recession over the past 50+ years..
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Yes, you are correct in assuming that the 'deeper, steeper, and longer' RED Recession Employment Recovery line DOES in fact belong to President Obama and his 'employment stimulating policies' of the past five years.  
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Worse yet, this unemployment calculation INCLUDES the omission of almost 92 MILLION American Workers who are no longer 'counted' as the BLS has sent them off to the White Castle for 'processing'.  
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Even worser than worse (yeah, I know, not grammatically correct, but just go with it) is the fact that when you add back in the 'Out of the Workforce' workers (White Castle) the REAL unemployment rate surpasses 13 percent, or about TWICE the 'Advertised Rate' of the mainstream Employment Recovery reporting.
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Is there more to this saga?
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Yes, there is, but it must be left for tomorrow, I have cud to chew and much more to do...

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Later.
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