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Dante
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PostMon Sep 22, 2003 10:51 am 
I have read that the unemployment rate only includes people who are looking for a job. The media talks about how people get discouraged and stop looking. BPJ asked me how someone could stop looking and I did not have a good answer. How does the government know whether you are looking or not for purposes of computing the unemployment rate? When I had the misfortune of being unemployed, I had to tell the government the details of my job search as a condition of receiving benefits. Is that how the government knows you are looking? If so, then my inner CPA/auditor tells me there is the potential for a significant understatement in the unemployment rate--once your benefits expire there is no incentive to tell the government you are looking--you just look. I bet the vast majority of the unemployed don't "get discouraged" and "quit looking". They just quit telling the government they are looking.

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Stefan
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PostMon Sep 22, 2003 4:02 pm 
You are correct in the understatement. But, if the record keeping in measuring the statistic is static then it does not matter what the "true" rate is because the static statistic will measure ups and downs within the "true" rate.

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Dante
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PostTue Sep 23, 2003 12:36 pm 
I guess the implication that bothers me (IF my assumptions above are correct) is the possibility that the president can "reduce" the unemployment rate by refusing to extend benefits. No benefits = little or no reporting by job seekers = lower unemployment rate. What would the unemployment rate be if the President had extended unemployment benefits for everyone?

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MCaver
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PostTue Sep 23, 2003 12:54 pm 
DJ wrote:
What would the unemployment rate be if the President had extended unemployment benefits for everyone?
But that would take money away from Haliburton by keeping it out of Iraq. huh.gif

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whistlingmarmot
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whistlingmarmot
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PostTue Sep 23, 2003 1:05 pm 
One thing is for sure: unemployment benifits decrease the cost of being unemployed. That can lower the incentive to find a new job...even though the unemployment benifit isn't enough to compensate for the lost wages.

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MCaver
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PostTue Sep 23, 2003 3:30 pm 
And we all know that people are only unemployed because they don't want to work, right? If it weren't for unemployment insurance, I definitely would have lost my car and been evicted from my apartment after getting laid off with no notice whatsoever. Unemployment helped me keep my head just above water until I found another job. The amount of money paid for unemployment is hardly an incentive to stay that way. I know from experience.

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whistlingmarmot
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PostTue Sep 23, 2003 9:40 pm 
Certainly on a personal level the largess is welcomed with open arms. What's up for debate, IMO, is if unemployment benefits are the most efficient way to put people back to work. And yes, many people don't want to work, or they refuse to do certain kinds of work.

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Slugman
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PostTue Sep 23, 2003 9:50 pm 
The Department of Labor has statisticians who actually go around and interview people to determine if they are employed, unemployed and looking, or unemployed and not looking. They come back after three months and six months to recheck your status then. These figures are combined with "raw" numbers like new claims filed, and that derives the numbers released to the public. I participated in such a polling effort about three years ago, and talked quite a bit with my poller. I even lent him my copy of "Infamy" by Pullitzer Prize winning historian John Tolland, about the Pearl Harbor fiasco and the resulting cover up and scapegoating. (He returned it later). I recieved a "commendation" from the Department of Labor for my cooperation. I was told explicitly that these polls are the main way that they determine the numbers you see on the news.

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Dante
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PostWed Sep 24, 2003 10:16 am 
Thanks

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