Skewed Unemployment Rate

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Define the Problem:
The real national unemployment rate is higher than the U.S. Department of Labor’s December figure shows. When the underemployed and discouraged are added to the unemployment numbers, the national unemployed rate rises to 16.6%. This causes morale to be low and Americans seem to be giving up. Variables Identified by Order of Influence:

1. The government no longer counts people as unemployed when they stop looking for work. The unemployment numbers don’t account for part-time workers or people seeking advanced degrees to improve their chances of landing a higher paying job. 2. More jobs were reported created than were really actually reported. Problem Statement:

Unemployment fell by almost half a percentage point in December, dropping the national unemployment rate to 9.4%, according to figures released by the Bureau of Labor Statistics on Friday, January 7, 2011. Unemployment has been high but relatively stable throughout 2010, ranging from 9.5 to 9.9%. December’s figure of 9.4% is the lowest unemployment rate for all of 2010. The official unemployment index, based on a monthly survey of sample households, counts only people who reported looking for work in the past four weeks. The national unemployment rate wrapped up 2010 by significantly dropping to 9.4 percent in December, the lowest level in 19 months despite a constant 9 percent unemployment rate for 20 months in a row, a new post-World War II record.

There are two main reasons for the skewed unemployment numbers. The first key reason for the drop was that the government no longer counts people as unemployed when they stop looking for work. It doesn't account for part-time workers who want to work more hours but can't, given the tight job market. And it doesn't include those who have given up trying to find work. The second reason is that more jobs were reported that were grossed. Meaning jobs were posted but never existed and thus lowered the actual job openings lowering the unemployment rate. It's bad enough that the nation's jobless rate is 9.4%. But the real national employment rate is even higher than the U.S. Department of Labor's December figure shows.

The truth is that even the broader measure of unemployment doesn't fully capture how difficult the job market is for U.S. workers. It doesn't include self-employed workers whose incomes have shriveled. It doesn't look at former full-time employees who have accepted short-term contracts, without benefits, and at a fraction of their former salaries. And it doesn't count the many would-be workers who are going back to school, taking on more debt, in hopes that advanced degrees will improve their chances of landing jobs. The purpose of this report is to discover and offer a solution; if for no other reason, to provide a better education on how the U.S. Department of Labor manipulates the actual employment rate. Definition of Terms

BLS- Bureau of Labor Statistics
Corporate Outsourcing- Creation of jobs overseas by American businesses.

Literature Review
Many researchers have studied statistics of unemployment, available jobs, and causes related to the influx of unemployment in recent years. The following resources were very interesting and useful for my research. (, New Haven Register) This source discusses the issues regarding job growth over the last 2 years. Wall Street views this report as that the job expectations fell short of everyone’s expectations and the unemployment rate was likely skewed by seasonal factors. Public jobs grew at a steady rate but the government slashed many jobs due to congressional mandates set at an earlier time period. Work hours were also mentioned throughout my research of this article. Shorter work weeks having many worthy job seekers and economists scared and with the decline work hours many are starting to stay in panic mode. This article touched many key points regarding the number unemployed as well as the averages...
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