Friday, August 20, 2021

Leftist Media Fail Once Again on Unemployment Numbers

Click here to read the original Cautious Optimism Facebook post with comments

1 MIN READ - From the Cautious Optimism Correspondent for Economic Affairs and Other Egghead Stuff.

Childishly fallacious attempt to absolve enhanced
unemployment benefits from persistent jobless rates
The liberal media fail math again, trying to portray early ending of enhanced unemployment benefits as some sort of massive failure.

The reasoning? In states that closed the taps the media laments that over 33% of idle workers lost their benefits, but in return those states only saw a 4.4% gain in new jobs. 

Wow, only a 4.4% gain from a 33% cut, what a disaster. Just look at that graph! Who can't see this obvious failure of dogmatic free-market ideology?

Except that there are far more members of the labor force working than not, so they’re comparing a third of a very small number to 4.4% of a very large one.

Take a state like Colorado with a 6% unemployment rate. 6% of the workforce is idle and 94% of the workforce is employed.

So 2% (one-third of 6%) of the overall workforce lost extended benefits while 4.1% of the overall workforce saw new job gains (4.4% of 94%).

Or if we take an example using hard numbers, the Bureau of Labor Statistics says Colorado’s workforce consists of 3.2 million people, 3 million of whom were working in July and 194,000 of whom were filing for unemployment benefits.

So if we apply these “disastrous” numbers…

33% of the 194,000 unemployed had their benefits cut or -64,000 people.

In return there was “only” a 4.4% increase in the 3 million people working or +132,000.

So in exchange for cutting extended benefits for 64,000 people, 132,000 people start working again.

Sounds more like a resounding success... for anyone who can do math (ie. not certain journalists).

ps. Except that Colorado is not one of the states cutting enhanced benefits early, which is why we haven't seen any single-month 132,000 job gains over there. In fact the number of people working in Colorado has actually fallen slightly since May: from 3,000,100 to 2,999,500 (see BLS tables).

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