Archive for the 'The Real Unemployment Numbers' Category

The Real Layoff Numbers – Weekend Update

Mike: This was a busy week for layoff and unemployment reports. The important numbers came from the BLS and they showed that nonfarm payroll employment fell sharply (-533,000) in November, and the unemployment rate rose from 6.5 to 6.7 percent. While these numbers are bad enough, they somewhat hide the true unemployment numbers, which are estimated at around 12%. The 12% figure comes adding the BLS (-533,000) to the number of people who have stopped looking for work or are working part-time jobs instead of full-time as they would prefer. The New York Times does a good wrap-up of the unemployment numbers:

“More significantly, the unemployment rate does not include those too discouraged to look for work any longer or those working fewer hours than they would like. Add those people to the roster of the unemployed, and the rate hit a record 12.5 percent in November, up 1.5 percentage points since September.”

NY Times

The following graph, courtesy of , shows the BLS unemployment numbers and then the SGS Alternate number, which is over 16%. The SGS Alternate is described as: The SGS Alternate Unemployment Rate reflects current unemployment reporting methodology adjusted for SGS-estimated “discouraged workers” defined away during the Clinton Administration added to the existing BLS estimates of level U-6 unemployment.

Chart of U.S. Unemployment

The following graph from the BLS shows the rapid deterioration of the job market:


Mike: Many talking heads mention that the “official” unemployment rate of 6.7% is less than that of the 1974 and 1980 recessions, so that this newly minted recession won’t be as bad as the two previous recessions. What is not mentioned is that the reported rate of unemployment was changed during the Clinton administration. The change was the exclusion of discouraged workers from the reported unemployment rate. So if you include the discouraged workers, the official rate would be greater than 6.7%. Government manipulation of numbers makes the current situation look better than previous recessions, but that is not the case.

Now let’s get to this weekend’s job loss news:

Mike: The workers at Republic Windows and Doors deserve a lot of support for standing up for their rights. If job loss numbers continue to deteriorate, revolts like this will and should become commonplace.

CHICAGO, Dec. 5 (UPI) — Workers at a Chicago factory that shut down this week said Friday they will remain in the plant until police throw them out or they get their last paychecks. 

A union representative at Republic Windows and Doors blamed Bank of America for the debacle, CBS2 in Chicago reported. Leah Fried of the United Electrical Workers of America accused the bank of forcing the company to close by cutting off credit and then refusing to guarantee payment on its last checks. Workers occupy closed factory

Intel Corp. could be preparing to lay off as much as 10 percent of its work force and cut its fourth-quarter guidance for the second time, an analyst said Friday, because the economic crisis has caused computer makers to sharply curtail the amount of processors they buy for those machines. Intel

Four of the 15 jobs eliminated by S.C. Educational Television in the face of state budget cutbacks will come from ETV Lowcountry and will include one of the station’s best-known personalities. SCET layoffs

The national economic crisis continues to affect El Paso, with another plant closing in the Sun City.  As many of us plan our Christmas and new year celebrations, some employees in the food industry are thinking about what they’ll do when they’re out of work in less than two months.   In short, they’re planning for unemployment. East El Paso Tortilla Factory Announces It Will Shut Down in 2009

ST. LOUIS — Bedding major Serta International has halted production at its factory here and says will close the facility by the end of January.The closing will eliminate about 95 jobs, said Kelly Rampson, Serta’s director of marketing. St. Louis-area Serta mattress plant closing

Steelcase, the Grand Rapids, Mich.-based office furniture maker, said Thursday it is closing a factory in Atlanta next year and will eliminate 300 white collar jobs as it weathers the economic slump. Steelcase Cutting Up to 900 Jobs

As promised last month, the Nutter administration began delivering layoff notices yesterday – but fewer municipal workers may find themselves out of work than previously stated.Mayor Nutter had said that 220 full-time positions would be lost to help close a $108 million shortfall for this fiscal year.

As of yesterday, however, that figure had shrunk to 141, and could shrink much further. Fewer layoffs than expected for Phila. city workers

HAGERSTOWN, MD – Just weeks before Christmas, more than 100 local Citi workers have been laid offCiti layoff

MUSCATINE, Iowa — Gary Carlson of HNI corporation has announced another round of layoffs is coming. HNI corporation to layoff more employees

The Wichita Metro Chamber of Commerce announced Thursday it will eliminate three jobs. Wichita Metro Chamber of Commerce will eliminate three jobs.

Plymouth Tube Co. to lay off 31 workers – Plymouth Tube Co. to lay off 31 workers

Framingham-based Staples, Inc. said Friday it will lay off about 140 workers, including half of its home office.

The Boston Globe reports that Houghton Mifflin Harcourt Publishing Co., will cut jobs after combining several units. A company official said only that several hundred people will be affected, including fewer than 100 in Boston.

Goulston & Storrs PC, a Boston-based law firm, said 40 administrative employees were let go this week — most of them at its Boston headquarters.

Data storage giant EMC Corp. of Hopkinton says it’s laid off “a small number” of workers during the last month. But it said it would finish the year with more employees than it started with.  Major Mass. companies making job cuts

Mounting job losses hit hotel and gambling sectors – hotel and gambling workers are among the hardest hit

Mike: I have to laugh at the so called predictions of economists, since they are rarely right and they are always surprised. I guess if you live in a sheltered academic tower, you don’t see how life is unfolding for the people you are studying. These economist types might as well put their predictions on a roulette wheel and give it a spin. John Kenneth Galbraith put it perfectly: “ The only function of economic forecasting is to make astrology look respectable.”  

Widespread nature of job cuts startles economists

“This was much worse than was expected,” said University of Maryland job market economist Peter Morici. “The threat of a widespread depression is now real and present.”

Some labor market analysts pointed to an alternate measure of unemployment calculated by the Bureau of Labor Statistics as a more accurate picture.

That measure estimates a jobless rate of 12.5 percent, which includes workers employed part-time because they can’t find full-time jobs and the “marginally attached” or “discouraged” workers who temporarily have given up looking for work.

Worthington Industries Inc. said it will close a metal framing plant and idle two others as it cuts more than 10 percent of its steel processing work force, moves that could cost more than 300 jobs. Worthington Industries closing, idling plants

About 800 people will be out of work when the Petit Jean Poultry Inc. deboning plant in Danville closes at the end of January. Danville braces for poultry plant closure

MASSENA — The General Motors Powertrain plant here will be closing for an additional week, beginning Dec. 15, according to corporate officials. GM plant in Massena closing for additional week

Mission Foods said Friday that it is closing its Fort Worth tortilla and chip plant and laying off 187 workers because of concerns over the current economic downturn, although the company says sales growth is positive. Mission Foods is closing a Fort Worth plant and laying off 187 workers

The largest Japanese carmaker is eliminating nine days of output by extending an annual holiday shutdown of its Georgetown, Kentucky, facility and closing the location two additional days in January. Toyota Expands Shutdowns of U.S., Canada Factories Amid Slump

SPRINGFIELD, Ore. — Shorewood Packaging closing Springfield, Ore., plant, putting about 100 people out of work

As the failing economy continues to girdle the nation, 298 folks will be out of a job come Jan. 31 when the Cintas Corporation closes down two of its manufacturing operationsCintas closing Bath Co. plant

Solo Cup Co., one of Greater Baltimore’s largest employers, laid off about 30 workers in Owings Mills Thursday

Cambria job cuts loom EBENSBURG — Continuing work on the proposed 2009 budget, the Cambria County commissioners said Friday that more layoffs could be coming in jobs other than the previously announced ones at Laurel Crest, the county nursing home. 

Shares of RealNetworks fell nearly 7% Friday after it joined the growing number of companies laying off workers this month. Real is cutting 130 jobs, or about 7.5% of its total workforce. RealNetworks joins layoff list

Houston area could lose 46,000 jobs The Houston area could lose about 46,000 jobs over the next 12 months as the national recession — coupled with a sudden slump in the all-important energy markets — takes root locally, the Greater Houston Partnership said in its latest economic forecast.

Mike: See you all on Monday.










The Real Unemployment Numbers

John Williams’ Shadow Stats site ( looks at various government reported financial estimates and shows how these estimates are skewed and inaccurate. The following chart shows how the government reported unemployment numbers can be interpreted when basing these numbers in reality:

Chart of U.S. Unemployment

As you can see, the current unemployment rate could be a whopping 16%!

The government numbers, on the other hand are available at:

According to the Bureau of Labor Statistics:

To summarize: Employed persons consist of:

  •  All persons who did any work for pay or profit during the survey week.
  •  All persons who did at least 15 hours of unpaid work in a family-operated enterprise.
  •  All persons who were temporarily absent from their regular jobs because of illness, vacation, bad weather, industrial dispute, or various personal reasons, whether or not they were paid for the time off.
    Unemployed persons are:
  •  All persons who did not have a job at all during the survey week, made specific active efforts to find a job during the prior 4 weeks, and were available for work (unless temporarily ill).
  •  All persons who were not working and were waiting to be called back to a job from which they had been laid off need not be looking for work to be classified as unemployed.


    The current government reported unemployment rate is 6.5%, which is the highest percentage of unemployed in 14 years. Employers shed 240,000 jobs in October, and the toll in September was far worse than previously reported — 284,000, up from an initial reading of 159,000:,0,7272359.story
    Many predict that the unemployment rate could rise to 8% during 2009.
    Update 12-15-08: Mike: I’ll add pertinent UE information to this post as it comes across:

    As U.S. jobs disappear at a rapid clip, the official unemployment figure seems understated. While November’s 6.7% rate is a full 2% higher than the same time last year, the rate remains well below the 10.8% postwar peak, reached in November 1982. One issue is that the official unemployment number captures only a slice of the total joblessness in the U.S. To be counted as unemployed in this statistic, a worker must not have a job, be currently available for work, and have actively sought employment within the last four weeks. In other words, a lot of the jobless are left out of the government’s tally.

    via Unemployment: Worse Than it Looks – BusinessWeek.


    Mike: The following article highlights how most workers aren’t able collect unemployment. While many of these workers may have been fortunate enough to find employment quicklyin good times, they will have a much more difficult time securing wmployment this time around. I’ll write more about this as I gather the information.

    Contractors, such as many 1099s,  aaren’t eligible for unemployment benefits, which could lower that 37% further. More as I get some facts:


    Only 37% of those laid off collect unemployment benefits:

    On Friday, when the Chrysler plant in Newark, Del., shut its doors, more than 1,000 autoworkers joined the ranks of the unemployed.

    At least they will be able to get unemployment insurance.

    Most jobless workers can’t.

    Across the U.S., only 37 percent of workers who lose their jobs typically collect unemployment benefits, according to Labor Department statistics.

    They often miss out because they didn’t earn enough while working, or their work history was not continuous enough to make them eligible under state unemployment laws

    via Many laid off get no benefits | Richmond Times-Dispatch.


    Mike: Some interesting stats and information concerning various state unemployment bebefit packages:

    *The federal average weekly benefit is $293 a week, and about 38% of the jobless receive payments, but state by state the numbers vary wildly. Mississippi joins Puerto Rico on the low end of the spectrum. Its weekly maximum is $210, with weekly payments averaging $180.77 going to about a quarter of that state’s jobless. In South Dakota and Texas, just 18% and 20% of the unemployed receive benefits, respectively. That compares with Massachusetts’ average weekly benefit of $383.77 to 57% of its jobless workers, or Hawaii’s $414.17 average weekly payment and 42% recipient rate.

    via Jobless Benefits, State by State – BusinessWeek.


    Here are some of the reported job loss headlines over the past couple days:


    Paccar layoff will leave few workers in Renton: Paccar’s Kenworth manufacturing plant in Renton will be a shadow of its former self in January, when 430 workers are laid off as the company copes with a major slump in sales of heavy-duty trucks: (
    Manpower expects mass layoffs globally: “Without being melodramatic but realising that facing reality does help, there’s been a speed which has taken our breath away in how fast this has slowed down,” said Mr Joerres.
    Report Predicts 40,000 Lost Jobs in Connecticut
    No One Wants an Invitation to a Layoff Event:According to preliminary data from the Bureau of Labor Statistics,
    1,330 extended mass layoffs occurred in the third quarter, 312 more than in 2007. About 218,000 workers were part of these layoffs, against 160,000 in 2007. These people were separated from their jobs for at least 31 days, but let’s be realistic: a lot of them will never be called back to work.
    ZEELAND — Herman Miller Inc. on Tuesday announced plans to slash hundreds of area jobs while rival Steelcase Inc. warned it may shed 300 workers as both brace for effects of the global economic downturn.:
    With Sun’s job cuts, tech sector layoff toll in ’08 hits 140,000
    About 110 workers at Beta Steel face layoffs,beta.article
    Georgia-Pacific to lay off 120 workers 
    at Roxboro facility
     – 11/15/08:
    Cessna to lay off 500; company blames economy’s rapid slide
    Southern Seven Health Department Plans To Close Clinics And Layoff Employees Due To State’s Backlog On Paying Bills:
    Sun Microsystems to Lay Off up to 6,000 Workers, Re-Focus on Open Source Market:
    ABX Air said Friday it will lay off 158 employees, starting immediately and extending through Jan. 14:
    Kinro Inc. – which makes aluminum and vinyl windows and doors for recreational vehicles and manufactured homes – will layoff 143 workers here and mothball its plant until business picks back up.:
    PULASKI COUNTY– The Southern Seven Health Department will soon lay off 60 people, close several facilities and cut services. The director says the state owes the department more than $400,000.:
    BOSTON – Shawmut Design and Construction, in a reversal of its outlook a few months ago, has announced plans to lay off an undisclosed number of employees.
    Whirlpool layoffs begin today in Fort Smith Posted: Nov 14, 2008 05:07 PM:

    QVC Cuts Workforce By 160; Plans To Layoff 750 More – Update:
    I hope to do a daily update and I hope that readers submit layoff notices and their affect on them, their families and their communities.

    Thanks for your support!

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