Warm Southern Breeze

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Alabama May 2015 Unemployment Higher Than Reported

Posted by Warm Southern Breeze on Saturday, June 20, 2015

Alabama Unemployment Rates May 2015 by County with Totals

Alabama May 2015 Unemployment Rates by County with Totals

According to the Alabama Department of Labor, the Seasonally Adjusted preliminary state Unemployment Rate for May 2015 was 6.1%. The Not Seasonally Adjusted rate was 6.2%.

However, as I have written previously (October 2014, Analysis: Alabama Unemployment Higher Than Stated), the rate is subject to flaw precisely because it is a simple arithmetical average of all counties. And because some counties are significantly more populous than others – Jefferson County, for example, is the state’s most populous county – it skews the data because there are so many people.

The Unemployment Rate is calculated as a simple average. Take the number of people working, added into the number of people NOT working, AND who WANT to work, divided by the people who are available to work, gives the unemployment rate.

Here’s how the Bureau of Labor Statistics defines the parameters of the equation:

What are the basic concepts of employment and unemployment?

The basic concepts involved in identifying the employed and unemployed are quite simple:
• People with jobs are employed.
• People who are jobless, looking for a job, and available for work are unemployed.
• The labor force is made up of the employed and the unemployed.
• People who are neither employed nor unemployed are not in the labor force.

Simply put, the formula is:

Unemployment Rate = Unemployed


Employed + Unemployed

 

A Random Statistical Sample should show the similar results as if the entire group was counted. In other words, picking a few counties out RANDOMLY and examining them, should accurately reflect the whole group.

The Unemployment Rate calculation – as shown above – is a simple, arithmetic average. And, averages can be good. However, averages can – and are – also artificially manipulated by “outliers.” Outliers are groups of numbers that are OUTSIDE the average. And, if there are enough of them, they skew – bend, twist, pervert – the results.

Alabama Unemployment Rate Random Sample May 2015 with 2012 SNAP Utilization & Totals

Alabama Unemployment Rate Random Sample May 2015 with 2012 SNAP Utilization & Totals

Another reason for the inaccuracy of the Unemployment Rate is because the rate calculation as shown above fails to include or account for the number of people who have STOPPED looking for work but would work if work or a job was available.

Therefore, it is more reasonable and accurate to use a Random Statistical Sample to determine the Unemployment Rate.

See this PDF Alabama map by county showing each county’s UR and number of unemployed.
AL Unemployment May 2015 & numbers

A Random Sample Analysis shows that Alabama’s Unemployment Rate for the Month of May 2015 was 7.33% – HIGHER than the reported Statewide Average of 6.1% for that month.

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