pages

Friday, March 07, 2014

paper napkin unemployment math

Ken Gardner says:
So you think math has nothing to do with politics? Consider this.

Our current population is over 317,650 million people. A new person is born every 8 seconds. That's 3,942,000 new people per year. A person dies every 12 seconds, or 2,628,000 people per year. The difference is 1,314,000 new people each year at current population growth rates. 

Now, add to this amount the millions of Americans who are currently unemployed and need jobs right now. According to the BLS, 10,459,000 were officially unemployed in February. The unemployment rate is 6.7%. To get it to 5% (which is considered "full employment"), we need to create 4,214,821 new jobs. 

So, if you add 1,314,000 and 4,214,821, you get 5,528,821 new jobs that we must create to accommodate population growth while getting back to full employment. This works out to 460,735 new jobs per month. Obama hasn't gotten anywhere close to this number. Most months have been under 200,000, often well under 200,000.

This is just a calculation on a napkin. The actual truth is worse. Our labor participation rates are shrinking, meaning that more working age Americans are leaving the work force (many of them in their prime earning years). And in the real world, the 10 million people who are underemployed but not counted as unemployed will be seeking many of the same jobs -- meaning that even increasing job creation rates will not necessarily result in lower unemployment rates -- at least not nearly as quickly as we would like.

No comments: