Is Today's Unemployment Rate Greater Than the Great Depression?
Bottom Line - The government's estimate of unemployment is not even close to reality.
When the bureaucrats figure out the employment situation each month, they take a survey. A survey talks to a limited number of people (compared to the size of the country) that answer some questions and gather data. This is supposed to be an accurate number that represents the entire country. Marketing Guru and author Seth Godin says that a census is accurate because they attempt to reach everyone. A survey that determines generalized data and applies it to 328 million is worthless data. How do I come to that conclusion?
We could not be at 13% unemployment when over 46 million have (actual numbers) people have filed for unemployment benefits since this started. So let's do the math. (from census 2019)
328.2 million people in the US
209,128,094 people who are 18 and over
19,900,000 students attend college
52,512,000 age 65 and over
If you assume that the ones 65 and over are retired and subtract them out along with the ones attending college, and you assume that the workforce starts at age 18, you would have 136,716,094 people in the US that are work eligible. Based on that assumption, you get this percentage of unemployed people:
33% unemployment rate - the unemployment rate during the great depression was 25%.
I do realize that there are some generalized assumptions that I am making here. Not every college student has the luxury of not working, and not every person over the age of 65 are retired.
shadowstats.com estimates that the real unemployment is 36.4%. They have a much more sophisticated method of producing real economic numbers. My numbers are based on government findings in the census. This is just common sense accounting that even if not all together accurate, it still produces an unemployment rate much higher than 25% during the Great Depression.
What is the bottom line? None of the Government unemployment numbers add up. The only ones that do are the weekly number of people filing for unemployment benefits. Based on those numbers, we have a problem that is not going to go away anytime soon.
Bob Brooks is the daily host of the Prudent Money Radio Show. He writes about stewardship and financial topics Monday through Thursday each week. For questions or advice, feel free to contact Bob at 972-386-0384 or email@example.com.