When I lived in China back in the early 1990s, it was entertaining to read the Chinese newspapers, all of them state-owned. In them, China’s government was always making excellent decisions, the economy was always improving, the leaders of other nations were always praising China’s leaders, and the economic “reform” initiated by that wise elder statesman Deng Xiaoping, was producing a miracle rebirth of the nation.
These stories were jarringly at odds with what I saw when I travelled to the countryside, and found that farmers were being expected to eke out livings for their families on plots of land smaller than the footprint of some Americans’ houses, that baby girls were being abandoned in orphanages when farm families bore a son, because of child-limit policies that made having a girl a big financial burden–especially since the tradition of girls going over to the family of their husband meant that not having a son could be a death sentence for parents in their old age. They were jarringly at odds too, with the misery I witnessed all the time among the tens of millions of rural migrants who flooded cities like Shanghai, Beijing, and other major metropolises looking for contract work, and with the appalling pollution of water and air (when I lived in Xi’an for five months, I could count the number of days I was actually able to see the round circle of the sun in daytime because of the perpetual smog that enveloped the city).
But say one thing about China. People there knew they were being fed a line of crap in their newspapers and on TV.
What about here in the US. We are getting fed the same line of crap by our media, but it’s not owned by the state.
Take the economy. We are told almost every day that unemployment in the US is 9.6%, yet this is simply a fraud. The unemployment figure being reported excludes many people who are clearly unemployed–notably “discouraged” workers who have given up looking for jobs because the effort is pointless, workers who would like to work but can’t find jobs, and workers who hold part-time jobs, but want full-time work. If we add these people to the total, America’s unemployment rate today is over 17%, which is one-in-six working-age people, not the one-in-ten that you get using the more restrictive methodology that gets all the media attention. Some experts say that the actual unemployment in the US is now 22%.
It wouldn’t be a problem if, when news organizations reported the 9.6% figure, they also reported the more inclusive number, but it never happens. That leaves Americans who have jobs thinking things are much better than they really are. The folks who are unemployed, or who have people in their families who are unemployed, know the real picture, but they are, of course, in the minority, and more often than not, they are at the lower income levels, which politicians and the media don’t care much about. Thinking they are part of that smaller number can also work to make the unemployed feel like the problem is with them, not the system, and yet obviously, with six workers looking for every job opening, and with over 20 million people jobless, and the economy adding only 60,000 net new jobs a month, nobody should be blaming him or herself for being unemployed!
There is also a misreporting process when it comes to another statistic–the weekly number of new jobless claims at unemployment offices.
The latest number, 434,000 new unemployment claims for last week, was hailed in the media as “good news” because it is, as AP noted in its report, “the second lowest number of claims for this year,” and was below the average for the year. But what was that average? 450,000.
That is, we are supposed to consider it good news that this past week, 16,000 fewer workers than average went to file a new unemployment claim. AP in its headline actually called the decline a “sharp drop”! Only well down in their story, by economics writer Christopher S. Rugaber, is it even mentioned that the official unemployment rate for October actually rose by a tenth of a percent to 9.7%.
Note that we’re talking about 16,000 people out a pool of some 14.7 million. That is, we’re talking about a tenth of one percent of the total number of jobless workers. It’s also 16,000 out of a total of 8.8 million who are currently collecting unemployment, which represents only about 0.2% of that total. The other thing that generally gets left out is that the weekly total is frequently volatile, depending as it does on seasonal factors and also on individual group layoffs. If a school district lays off 500 teachers, or a big factory closes and lays off 1000 workers, obviously that can have a huge impact on the overall figure. This is why it makes more sense to look at trends. Even the four-week moving average for new unemployment claims makes more sense to look at than the weekly average. And the current four-week moving average only showed a drop of 5500 claims, with the average weekly new claims falling to 453,250 from a prior 458,750. That, at 1.19%, is an insignificant number.
But so ingrained has this nonsense become that when the weekly unemployment figure was announced, the stockmarket took a quick jump, rising briefly more than 50%, as if things were turning around finally!
A much more important statistic for people to be hearing about is the number of people who are receiving emergency extended unemployment benefits, which is currently 4.7 million, or more than half of all those collecting unemployment benefit checks. That number fell last week by about 126,000, but according to the federal Bureau of Labor Statistics, most of those were not people who found work, but were people whose extended benefits, which in most states allow people to receive an unemployment check for a total of 99 weeks, had run out! Did you get that: 4.7 million working-age Americans eligible for unemployment have been out of work for two years now, and those who’ve lost their benefits have been jobless even longer. These are jobs that probably aren’t coming back.
That’s news you probably aren’t hearing or reading in the feel-good mainstream media.
Nor do the normal employment/unemployment reports mention that half of workers who are unemployed don’t even qualify for unemployment benefits (for example workers who are classified as “independent contractors”), or that not all workers whose ordinary unemployment benefits expire are eligible for extended benefits. (Only those in states whose official unemployment rate is greater than 8.6% offer extended benefits, meaning if you are unemployed in a state where the rate is 8.5%, you’re out of luck.) And not all states even offer extended benefits.
Instead we get happy news: Unemployment compensation filings are down. The number of people collecting long-term unemployment benefits is down. Unemployment is “only” 9.6% of the workforce.
In China, people would laugh wryly at the articles in the paper, or crack cynical jokes about the cheerful newscasters on their TVs.
In America, we assume what we’re reading and hearing is the truth, and we are cheered by the news.
How else to explain the apparent public demand for cuts in government spending to create jobs at a time of record joblessness and hardship that are running at levels not seen since the 1930s?