The Truth Behind Unemployment Rates

Jos Bodewes, our CATS Software Inc. counterpart in the Netherlands, sent me Google’s comprehensive graph of unemployment rates in the US since 1990. With all the conflicting information and instinct out there (Nobody panic! Ok, everybody panic! Or maybe not!), such a hard-and-fast measurement of statistics is a real eye-opener. Midwest states like Minnesota and Iowa are actually below the national average, but East and West Coast states are almost all at similar or higher levels.

But it should be noted that there are limitations on this kind of survey. The Bureau of Labor Statistics, which measures unemployment figures at the beginning of every month, can’t possibly ask every single household in America about their employment month after month, year after year. So instead each state designs a sample population made from rural and urban areas, different industrial areas, and major geographical divisions. All in all, it amounts to about 60,000 households, or something like 110,000 people.

The survey results are fairly accurate according to the Bureau, but what I take away from this is that these statistics are not the all-consuming truth. Rather, they give readers an approximation of what’s going on.

You can read the (exhaustive) explanation of the process on the Bureau’s website.