Sunday, January 17, 2010

33% True Unemployment Percentage in the U.S.? Estimating the True Current Unemployment Numbers in the United States.

January 17th, 2010

The possible true percentage of unemployed workers in the United States is roughly estimated by the calculations below. As the calculations show, the true possible unemployment percentages could range anywhere from twenty to fifty percent (20% to 50%). As shown in the calculations and supported by extraneous indicators not addressed herein, I would surmise the likely true percentage of unemployed U.S. workers to be approximately thirty-three percent (33%).

As a rough estimate of the current amount of unemployed U.S. workers:

- Size of American legal workforce = 154, 287,000 “not counting discouraged, institutionalized (students, convicts), or marginal workers”
- Initially ten percent (10%) unemployment remaining constant for two (2) years.
- Percentage falling off unemployment statistics each month and therefore no longer considered to be unemployed essentially equals number becoming unemployed each month, hence a constant 10% unemployed for the time period of the last two years.
- Average length of unemployment insurance benefits / length of time a worker is counted as being unemployed without reentering the workforce = six (6) months.
- No consideration is given for any worker that may file for unemployment more than once over the two year period calculated.

Number of Unemployed:
154, 287,000 x 0.10 = 15,428,700 = 10% = Number unemployed any given month and initial and final amount as well for the two year period.

Plus Those Newly Unemployed any Given Month:
15,428,700 / 6 = 2,571,450 = Number becoming unemployed any given month for the period which also equals the same amount that fall off unemployment and are therefore no longer counted as unemployed.

Plus Those No Longer Considered as Unemployed any Given Month:

15,428,700 / 6 = 2,571,450 = Number no longer considered as unemployed any given month regardless if they dont return to an employed status.

Say, 50% return to work during unemployment immediately after unemployment benefits end

2,571,450 x 0.50 = 1,285,725 actually return to work of those newly not being counted as unemployed

Say 20 % return to work (which is probably the most realistic number given the industries that have laid-off workers)

2,571,450 x 0.20 = 514,290

Say 80 % return to work (which is unlikely)

2,571,450 x 0.80 = 2,057,160

Equals Total Number Unemployed:

Therefore, total number unemployed for the last two years:

(workforce x 0.10) + (24 months x (newly unemployed/month – number returning to work)) =

If 50% have returned to work after falling off unemployment the total number unemployed:

(154,287,000 x 0.10) + (24 x (2,571,450 – 1,285,725)) = 46,286,100 unemployed.
= 30% unemployed.

If 20% have returned to work after falling off unemployment the total number unemployed:

(154,287,000 x 0.10) + (24 x (2,571,450 – 514,290)) = 64,800,540 unemployed.
= 42% unemployed.

If 80% have returned to work after falling off unemployment the total number unemployed:

(154,287,000 x 0.10) + (24 x (2,571,450 – 2,057,160)) = 27,771,660 unemployed.
= 18% unemployed.

However, If 0.0% have returned to work after falling off unemployment or all become underemployed and could still be counted as unemployed, the total number unemployed:

(154,287,000 x 0.10) + (24 x (2,571,450 – 0)) = 77,143,500 unemployed.
= 50% unemployed.

In case you don’t know what I mean when speaking of the true unemployment numbers, when one receives unemployment compensation or applies for such anyhow, they are then counted as unemployed (unemployed illegal immigrants or employed undocumented workers never count as unemployed – btw, of course). However, if one does not become reemployed by the time any unemployment insurance compensation expires – typically six months or so, they are no longer counted as unemployed regardless if they remain unemployed albeit without any unemployment insurance benefits. After six months of not returning to the workforce, those workers are considered as people who are not interested in rejoining the workforce, or as the government labels them, “discouraged workers.”

Anyway, so we can see that the true number of unemployed is likely to be significantly larger than the reported numbers concerning unemployed U.S. workers.