Obama DECIDES to up the unemployment rate … really!

I’m ambivalent about Obama’s decision to, in effect, implement the Dream Act despite it’s rejection by Congress.

I’m ok with parts of it — like legalizing those who serve in the military —  but I’m not that keen on presidents completely ignoring the Constitution.

Immigration politics aside, I’m interested in the statistics … specifically, the impact of Obama’s move on the BLS’ reported unemployment rates.

Most sources are estimating that just short of 1 million illegals fall into Obama’s stick-around policy — over 16 years old, younger than 30.

Those people now — by the stroke of Obama’s pen — qualify as “in the American labor force” … the denominator of the unemployment rate calculation.

Let’s do some simple math …

The BLS says that there are currently 155 million people in the labor force … according to the last BLS report, 142.3 million were employed … 12.7 million unemployed … for an 8.2% unemployment rate.

What happens when the 1 million newly minted legals get thrown into the statistical mix?

Worst case: if all are currently unemployed … then the unemployment rate jumps to 8.8% … 13.7 unemployed divided by 156 million in the labor force.

Best case: if only 11% are unemployed — the current UE rate for Hispanics … then the unemployment rate increases slightly to about 8.25% … 12.81 unemployed divided by 156 million in the labor force.

Most like (statistically): somewhere between the best and worst cases … probably a 25% unemployment rate for the new legals … bumping the UE rate by about .1/10th of a percentage point.

Most likely (politically): the BLS will “forget” to add the new legals to the labor force until, say, January 2013.

That’s the case that I’m betting on … watch the labor force numbers to see if I’m right … they should bump up a million when June numbers get reported … but they won’t!

>> Latest Posts

Tags: , , ,

Leave a Reply

Fill in your details below or click an icon to log in:

WordPress.com Logo

You are commenting using your WordPress.com account. Log Out /  Change )

Google photo

You are commenting using your Google account. Log Out /  Change )

Twitter picture

You are commenting using your Twitter account. Log Out /  Change )

Facebook photo

You are commenting using your Facebook account. Log Out /  Change )

Connecting to %s