The US President predicted that since the government only counts those people as unemployed, who have been looking for work in the past 4 weeks, the unemployment rate is biased and incorrect. He believes that there are many Americans who have been looking for job in the past and could not find one. Now they have lost hope and have stopped looking for one. These people are unemployed but are not being counted as unemployed misleading the unemployment rate.
This way of counting the unemployed or deducing the unemployment rate is helpful in excluding the retirees and the students from the labour force. Still, Trump’s allegations are true to some extent that the unemployment rate is not covering all the people who are actually unemployed and the statistics provided by the reports are not depicting the true state of the economy.
Officials are surprised by the fact that a big proportion of adults are not part of the labour force. Even if Maternity and paternity leaves as well as unwilling fresh graduates are considered, still the big proportion of adults who are unemployed and are not part of the labour force cannot be justified.
Indeed, the researchers behind the study pooled government data and ultimately found that 37.2 percent of American adults – and 18.7 percent of prime-aged working adults between the ages of 25 and 54 – were not in the workforce as of 2016. That amounts to 38 million men and 56 million women across the country that are neither working nor looking for a job.
Most are older, as 57 percent of men and 55 percent of women not in the labour force are at least 55 years old. Meanwhile, only about 23 percent of men and 16 percent of women not in the labour force are between the ages of 16 and 24. Of that group, 81 percent identified as students.
The reason presented by majority of Americans for not being part the labour force was care giving and family issues. Yet, the figures that have been surveyed represent that the method of calculation needs to be altered to ensure American economy’s health.