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Old 02-25-2009, 08:49 AM   #21
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So I keep hearing that we measure unemployment differently now than during the great depression. I googled and found this amusing visual display:

Current Unemployment Rate & Statistics 2009 - Job Layoffs, Loss | Mint.com Blog | Personal Finance News & Advice

But it doesn't exactly cite it's source. According to this link if we highlighted the "U6" unemployment number instead of the "U3" we'd be at 13.5% unemployment, and if we measured the same way we did during the great depression, it would be 17%+.

So how accurate is that? What's being left out? We hear the doom and gloom, but so far my circle of family and friends has waaay less than 1 in 5 unemployed, more like 1 in 10 underemployed, but at least with some sort of job. I'm not refusing to believe the government would spin numbers positively, but if the above claims are true, where are the breadlines and hoovervilles?
I agree with the breadlines comment.

The gov't currently publishes six different unemployment numbers every month. Before 1995, they published seven. This link talks about the change http://www.bls.gov/opub/mlr/1995/10/art3full.pdf

But the "old" system goes back to the 1940's, it started after the depression. I haven't been able to find how they counted during the depression. I did find a couple references to including people on "work relief" as unemployed. I believe that refers to people who were employed by the WPA and similar programs.

The only source I can find for the 17.5% is John Williams at "Shadow Statistics". He makes his money by selling a subscription to a service that tells you the gov't is lying to you. I spent some time there last year, trying to figure out where he gets his inflation number. He refuses to disclose his "method". So my guess is that there isn't any basis for the unemployment number, either.
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Old 02-25-2009, 12:27 PM   #22
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Originally Posted by laurence View Post
So I keep hearing that we measure unemployment differently now than during the great depression. I googled and found this amusing visual display:

Current Unemployment Rate & Statistics 2009 - Job Layoffs, Loss | Mint.com Blog | Personal Finance News & Advice

But it doesn't exactly cite it's source. According to this link if we highlighted the "U6" unemployment number instead of the "U3" we'd be at 13.5% unemployment, and if we measured the same way we did during the great depression, it would be 17%+.

So how accurate is that? What's being left out? We hear the doom and gloom, but so far my circle of family and friends has waaay less than 1 in 5 unemployed, more like 1 in 10 underemployed, but at least with some sort of job. I'm not refusing to believe the government would spin numbers positively, but if the above claims are true, where are the breadlines and hoovervilles?
i dont know the validity of the 17%+ number but a few things are different now relative to the GD which cud potentially explain the lack of "bread lines and hovervilles" and they are 1) prior to both crashes there were significantly more 2 income housholds now then in the GD so a loss of 1 job in a household wud not mean that household is without funds but wud raise the unemployment rate, 2) unemployment insurance and 3) welfare
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Old 02-25-2009, 07:06 PM   #23
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If anything the Great Depression unemployment statistics seems understated compared to what we're seeing now. I wonder if the guys selling apples on the street corner were considered "employed".
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Old 02-25-2009, 07:17 PM   #24
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Interesting reasoning in this thread . . .

"In my circle of friends and family the unemployment rate is much lower than 20%. Looking around my town and even on the news, unemployement lines don't seem that extreme. But I guess a bunch of people have been laid off, and the market is down a ton. The government says unemployment is only 8.5%, but the government always lies . . . so unemployment must be worse than it was during the depression."
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Old 02-25-2009, 07:31 PM   #25
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Gumment stats - CPI, GDP, unemployment rate, etc. - are probably better for tracking trends than providing a "real" number.
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Old 02-25-2009, 08:16 PM   #26
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...but if the above claims are true, where are the ..... hoovervilles?
Apparently they're getting some started out in Sacramento. Sacramento homeless tent city

When you build a significant part of your economy (California, Phoenix, Las Vegas, Florida) on a housing bubble, it's a real bummer when it bursts.
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Old 02-25-2009, 08:19 PM   #27
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Gumment stats - CPI, GDP, unemployment rate, etc. - are probably better for tracking trends than providing a "real" number.
People feel that way but I'm not sure it's true. I took a look at a bunch of prices reported in the NJ Record paper from 1900-2008 and found that CPI explained inflation pretty darn well.

Historic price survey, Morris County New Jersey 1900-2000

US Government stats tend to be prepared in a pretty transparent way. They aren't perfect, for sure, but outright fraud and manipulation is highly unlikely. Also, if the government numbers were deliberately skewed, you'd see private economists and forecasters adjusting the government numbers to compensate for the skew . . . I've never seen anyone claim to do that.
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Old 02-26-2009, 04:51 AM   #28
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Thank goodness I have actually worked at McDonald's plus other crap jobs too numerous to name. I guess when you started out as a cockroach, you can always go back to being one.

Heck, with my current job, there are days I feel that it ain't but 2 steps above working at McDonald's minus the slutty girls. Hey, maybe I'll work at McD's for a couple of weeks and then show up at a presidential town hall meeting and rant and rave a bit. I wonder if it will lead to new career opportunities.
I really missed out. When I worked at McDonald's they only hired boys. A few slutty girls would have spiced things up a bit.

I worked all sorts of crappy jobs. My kids refuse to believe I was a busboy in a Mexican restaurant but that was before "guest workers" took over the industry. My kids and DW seem to have this attitude that some jobs are "beneath them" which is so far out of my mindset. I tell them that wait until you won't have a place to sleep and food to eat. There aren't many things you won't do to avoid that.

Of course, now I make big bucks and do very little real w*rk. I'm hoping to get unemployment checks as severance pay some day. I intend to totally commit myself to not finding a suitable position. I certainly can't be expected to take a position beneath my skill level.
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Old 02-26-2009, 09:11 AM   #29
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People feel that way but I'm not sure it's true. I took a look at a bunch of prices reported in the NJ Record paper from 1900-2008 and found that CPI explained inflation pretty darn well.

Historic price survey, Morris County New Jersey 1900-2000

US Government stats tend to be prepared in a pretty transparent way. They aren't perfect, for sure, but outright fraud and manipulation is highly unlikely. Also, if the government numbers were deliberately skewed, you'd see private economists and forecasters adjusting the government numbers to compensate for the skew . . . I've never seen anyone claim to do that.
Interesting tables. I've thought about doing the same thing using old Sears catalogs. Your wording is "I took a bunch ...". Did you put the tables together?
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Old 03-02-2009, 03:47 PM   #30
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IIRC, unemployment stats were not kept in the 1930's. The 20% unemployed during that time is a later estimate.

Shadow Stats apparently applies a 'correction factor' to official stats, supposedly making it comparable to older official methods. However, at least in the case of the consumer price index and hedonic adjustments this has been disputed.

See 'Adressing Misconceptions about the Consumer Price Index" by Greenlee and McClelland
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