6.7%

If the rules tell you to look at raw statistics presented in a certain way to determine that we are growing solidly, and those numbers pop up in a positive vector, you tell the world we are entering into a period of healthy and sustainable growth. But God help you if you ask too many questions on what those statistics really mean and what life is like for the vast majority of Americans.

Here’s the positive spin: “Record exports and the smallest trade deficit in four years. Healthier consumer spending, including the strongest annual increase in automobile sales since 2007, spurred by a booming stock market and an improving housing sector. And a slow but steady pickup in job creation that has pushed unemployment to its lowest level since 2008.

“The confluence of all these forces in recent weeks has prompted economists to sharply revise their expectations for growth in late 2013 and early 2014, and prompted hopes that a more sustained economic expansion has finally arrived.” New York Times, January 9^th. We are, after all, heading to that magical and targeted unemployment rate of 6.5%... and we are almost there at the recently-released 6.7%. While this is a “good thing,” it’s not as good as economists would want you to think.

I’ve already presented the case on the quality of the jobs that have made the biggest dent in the unemployment numbers: part-time, limited-term contract work, low-level jobs in hospitality, food services, construction, etc. The fact that the buying power of average Americans has steadily and without interruption fallen, year after year, since 2002 remains a dismal thorn in our economic side. Too many workers have opted for earlier retirement, including taking their meagre social security benefits (lower when you retire before your Social Security account peaks) as the sole support for the rest of their lives. Another giant group, too young to draw those benefits and too old to be taken seriously by the job market, have given up looking.

So let’s look at some factors that might be more relevant. The most telling number, which does not address the quality and pay level of the average worker (a declining reality for most), is something called the “participation” rate. Investopedia.com explains: “[It is a] measure of the active portion of an economy's labor force. The participation rate refers to the number of people who are either employed or are actively looking for work. The number of people who are no longer actively searching for work would not be included in the participation rate. During an economic recession, many workers often get discouraged and stop looking for employment, as a result, the participation rate decreases.

“The participation rate is an important metric to note when looking at unemployment data because unemployment figures reflect the number of people who are looking for jobs but are unable to secure employment… The participation rate and unemployment data should be observed in tandem to give a better understanding of the overall employment status.” Forbes.com (January 10^th) fills in the blank: “The labor force participation rate was down from 63% to 62.8%, the lowest rate in more than three decades.” But what’s more relevant is that the pattern in the rate has been a steady decline in that participation rate for quite a while, what may appear to be a minor fall, 0.2%, is only the latest installment.

Savvy Forbes.com continues with this honest assessment: “‘This has been a two steps forward and one step back recovery,’ said Mark Hamrick, Washington bureau chief at Bankrate.com, in a phone interview. The unemployment survey only counts people who are looking for work as unemployed, suggesting many people left the labor market last month. The number of unemployed declined by 490,000 to 10.4 million…. In a note following the Bureau of Labor Statistics release, Capital Economics Chief U.S. Economist Paul Ashworth wrote: ‘… [T]he payroll survey still counts workers as employed as long as they were paid for one day in the sample period, regardless of whether they physically turned up,’ he wrote.

When car sales are up, few noted that after the approximate 11 year-ownership average for U.S. automobiles forced many consumers to replace aging and fuel inefficient vehicles out of sheer necessity. The focus on the stock market as one of the leading metrics of a recovery fails to appreciate that business have made money by firing workers, automating where they can and pushing labor costs off-shore.

The middle class continues to contract. The lower classes seem to be perpetuating an under-class low-earnings pattern that threatens to continue well into the next several generations. Our inability to provide meaningful access to affordable post-secondary-school education is impairing our earning power and quality of life for decades to come. As to the years of basic education, our growing class size and the unwieldy pension obligations of too many public school districts are simply accelerating our continued deterioration in our global academic performance statistics. Truth appears to have left the building.

I’m Peter Dekom, and we really need to refashion our statistics to tell us what is really going on for the vast majority of Americans and stop lying with numbers.