My View From The Country

It’s Time To Scrap The Unemployment Rate Metric

The media and politicians are doing the nation a disservice by continuing to use the metric of unemployment rate as a valid indicator.

Sometimes metrics that were once valuable become less so. Take actual birth weights; there was a time where that number was a major selection parameter for cattlemen. Today, however, we have birth weight EPDs, which are 7-9 times more accurate than birth weights.

Even with that said, the birth weight EPD is an indicator trait, and we have calving ease EPDs that make birth weight EPDs far less valuable. Throw in the opportunity to have a young bull DNA-tested, and birth weight, while important to collect in and of itself, has become fairly meaningless.

The same can be said for the federal government’s unemployment number. It originally was intended to give us an indication of how many people are employed, and whether the economy is creating or losing jobs. And while it used to be able to do that, collection quirks and new circumstances have rendered the number worthless. Last week’s unemployment number illustrates just how meaningless that number has become, and it’s time to replace it with a more meaningful metric.

The media and politicians are doing everyone a disservice by continuing to look at this number as a valid indicator. Unemployment fell to 6.7% last month, which is the lowest rate since October of 2008. For perspective, that was right before Obama was elected the first time. At first glance, that would be good news, but the economy only created 74,000 new jobs in December, which is the worst job creation total in three years, which have been dismal from the job-creation standpoint.

 

Subscribe now to Cow-Calf Weekly to get the latest industry research and information in your inbox every Friday!


The reason the unemployment rate continues to fall is that people are simply giving up looking for work. We simply have stopped counting the unemployed as unemployed.

Only 56.1% of the people eligible to be employed are employed today. Only 62.8% of the population is either working or looking for work – a 36-year low. If unemployment benefits aren’t extended, that number will drop even more, as looking for a job is a requirement of receiving those benefits. 

We’re looking at historically terrible numbers when it comes to employment, but it’s not being talked about in its proper context. It’s time to talk about the percentage of eligible Americans who aren’t working; that’s the number that must rise, and rise quickly.

 

You might also like:

Congress Is Falling Down On The Job

Experience Winter Wonderland On The Ranch

USDA Proposes To Allow Imports Of Fresh Beef From Brazil

Record Prices Will Continue, But Who Will Most Benefit?

Industry At A Glance: Feedyard Revenue Through 2013

Discuss this Blog Entry 7

Anonymous (not verified)
on Jan 20, 2014

A Republican hack wants to change the way unemployment is measured since the number is no longer high enough to bash the current president with. What a surprise.

Doug (not verified)
on Jan 21, 2014

Troy stated the facts. You defend your position by attacking the person. I would be interested in any facts you might have to prove him wrong. There are 90 plus million people who can not find work, yet the unemployment rate drops?

Thomas Howard (not verified)
on Jan 21, 2014

The argument used to be that we needed less work to be done to avoid overproduction and to free people for everykind of unpaid activity. Still has merit. Just look at the excesses of everything provided by the market. Ability for average people to spend hundreds-thousands on their pets. What is needed is better distribution of buying power, greater diversion to public works, free public amenities and leisure time. Both numbers are required. Conventional unemployment and percentage in the labor force. Troy reveals his bias in the first sentence implying that since 08 it is Obama's recession. Not true. It is Bush's recession. It is Obama's recovery, all be it a strange recovery.

on Jan 22, 2014

"Wall Street adviser: Actual unemployment is 37.2%, 'misery index' worst in 40 years" -- http://washingtonexaminer.com/wall-street-advisor-actual-unemployment-is...

Must be an "Obama basher"

Anonymous (not verified)
on Jan 22, 2014

The "wall street examiner" appears to be the print version of Fox news.

Anonymous (not verified)
on Jan 21, 2014

Good article, and I believe people with common sense can see that.

Anonymous (not verified)
on Jan 22, 2014

There is work in southern Mn. if you want to work. Feed mill workers ,Ag mechanic, Agronomy operator, Data entry, General labor, Machine Operators, RN & LPN nurse. Just some of the help wanted Ads. But nobody wants to work.

Post new comment
or to use your BEEF Magazine ID
What's My View From The Country?

As a fulltime rancher, opinion contributor Troy Marshall brings a unique perspective on how consumer and political trends affect livestock production.

Contributors

Troy Marshall

Troy Marshall is a multi-generational rancher who grew up in Wheatland, WY, and obtained an Equine Science/Animal Science degree from Colorado State University where he competed on both the livestock...

Sponsored Introduction Continue on to (or wait seconds) ×