Republican nominee Donald Trump asserted Monday the government’s 4.9 percent unemployment number is the “biggest hoax” in modern politics.
made a major economic policy speech in Detroit, Mich. Monday, where he asserted that the government’s 4.9 percent unemployment number is the “biggest hoax” in modern politics.
The government released July’s jobs report this past Friday, showing the private sector added 255,000 new jobs and the unemployment rate remained unchanged from the previous month at 4.9 percent.
The unemployment rate is calculated by a division of the Department of Labor called the Bureau of Labor Statistics (BLS). BLS conducts a monthly survey known as the Current Population Survey (CPS) that involves 60,000 randomly selected households across the United States. CPS has been conducted by BLS every month since 1940, when it began as part of a Works Projects Administration program.
The survey first determine’s how many people in the household are actually in the labor force, which is defined by BLS as people who have jobs or are actively looking for jobs. This is the problem that Trump highlighted in his economic policy speech in Detroit, Mich. Someone who does not have a job but claims he is not looking for one is considered out of the labor force and is not counted in the unemployment rate.
Resident scholar on economic policy for the American Enterprise Institute, Aparna Mathur, told The Daily Caller News Foundation that Trump’s assertion is false. “You could argue that just because people are not looking for work doesn’t mean that they don’t actually want a job, maybe they are too discouraged to look or are simply biding their time,” Mathur said.
Mathur explains BLS understands that the unemployment number leaves out the underemployed and those too discouraged to look for work, and reports a separate alternative measure of under-employment, which is the U-6 rate. Mathur stated that if the government used the U-6 rate instead, the “unemployment or under-employment” numbers would double.
Mathur concluded that the BLS is a, “trustworthy organization that is not fudging up the numbers, nor are the numbers a hoax. The numbers are the best estimate we have out there of what the state of the labor market is.”
Trump isn’t alone in his critique of the model. Sen. Bernie Sanders has blasted the government’s unemployment numbers. Speaking at rally early on in his presidential bid, Sanders said, “when you talk about the economy we also have to have an honest assessment of unemployment in America.” Sanders described a second set of government statistics of people no longer looking for work, and people who are working part-time when they want to work full-time. Sanders concluded, “when you add all of that together, real unemployment is 10.5 percent.”
Speaking to the Detroit Economic Club, Trump laid out his economic vision alongside his running mate, Indiana Gov. Mike Pence. Trump, frequently interrupted by protesters, offered specific policy initiatives and re-iterated his message of America first.
Trump’s new tax plan included just three brackets set at 33 percent, 25 percent and 12 percent. His plan would limit taxes on business income to 15 person. During the speech, he also announced a plan to eliminate the estate tax, and to exclude childcare expenses from taxation.
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