We need to look at some new economic advisers, new economic models, and new economic ways of looking at things. One of the most important elements of economics in our current administration is the unemployment rate and the way it is currently measured today. The number that the public sees and the government reports is not a realistic number; instead, it only calculates the number of people that are on unemployment insurance. The fact that this is the only way the labor department and government report unemployment is crazy.
It seems in our current market the only thing we can figure out is that our economy has not grown. We have a 4 percent unemployment rate Q1 because the numbers that calculate the unemployment rate do not equal a true number. If it did, it would include the citizens of America that can work, so it is a lie. They need to take what is referred to as, “Q6” and reference it instead. Q6 represents the people that are off of unemployment insurance, working part time, or underemployed, or have just stopped looking for a job altogether. Presently Q6 is 9.8 percent. The balance of these individuals rely on other government agencies to support them with programs like disability, which has increased tremendously because of the number of people that have gotten on or increased their disability coverage while unemployed.
Individuals who are underemployed, and working part time are not counted in the real unemployment number. Neither are any illegal immigrants. We need to employ the immigrants who want to be employed and record them properly as working or not. If we start calculating and using an actual number, then we can start seeing some real movement in what needs to be done to get people to work and to improve our economy faster and with better data and theories.
The entire theory behind and the way we view, calculate, and report the unemployment rate needs to be rethought. New processes need to be inputted. Once we have done that, then we will see so much more. Some of the further issues that will come to light are the people that have gotten older and are still looking for work. We need a way to include variables like these individuals and adjust to the high-tech world that we live in today. The service sector could be a very simple tool to come up with viable theories for solutions. Whatever it takes politically to show and explain how our economic models today are extremely outdated, we need to do it and fix it.
If we work to fixate on the bigger picture, the world will be able to see a simplified version of where we are at today. From there we can design a much more efficient and effective way to value work and unemployment. Most importantly the leaders of our nation will be able to manage the economy better and work much more simply towards growth.
If I were President Trump, I would support this theory. It could cut the real employment rate and improve our economy by 4 percent, which would make him a hero. Making this change would not show much progress in the short term because of the previous rate and the fact that the old regime was not using correct data. Let’s say 9.8 percent to 4 percent (or now 4 percent to 3.8 percent). In the long run, these numbers would mean much more to Americans and our economy. What do you think?