News Column

PolitiFact: Is Cruz Correct That Jobless Reports Getting Worse?

October 8, 2013

W. Gardner Selby, Austin American-Statesman

ted cruz
U.S. Sen. Ted Cruz (file photo)

Oct. 08--Saying the new health care law is undermining the economy, U.S. Sen. Ted Cruz declared that more and more Americans are giving up on looking for work.

"We have tens of millions of people in this country out of work," Cruz said on the Senate floor. "Every month, we get the reports from the (U.S.) Bureau of Labor Statistics that say even more people have given up looking for work."

Americans giving up on job searches factor significantly into monthly jobless rates. That's because the government does not count individuals who did not look for work in the latest four weeks as being "in the workforce."

Cruz continued: "The odd way our unemployment statistics work, that makes the number the newspapers report go down. Because when a few hundred thousand people say: 'All right, I give up, it is so hopeless, I will never find a job,' that, curiously, results in the unemployment number going down because the number that gets reported in the papers is a measure of a percentage of how many of the people looking for work are unable to find it."

Is Cruz correct that more Americans are giving up looking for work?

Cruz did not specify the "reports" referenced in his speech, but economists told us individuals who have given up looking for work are what the government calls "discouraged workers," meaning persons "not in the labor force who want and are available for a job and who have looked for work sometime in the past 12 months (or since the end of their last job if they held one within the past 12 months) but who are not currently looking because they believe there are no jobs available or there are none for which they would qualify." Such workers are a subset of workers classified as "marginally attached" to the workforce, meaning individuals who want a job, have searched for work during the prior 12 months and were available to take a job during the referenced week but had not looked for work in the past four weeks.

Bureau of Labor Statistics economists guided us to its estimates of the number of discouraged workers, which has gone up and down month to month.

The number of "discouraged workers" averaged a decade-high of nearly 1.2 million in 2010, surely because of the recession.

The monthly average of discouraged workers decreased to 989,000 in 2011, the bureau says, and dropped again, to 909,000, in 2012. In the most recent 12 months before Cruz's speech, from September 2012 through August 2013, the number of discouraged workers increased six times and decreased six times, according to the agency's figures. Most recently, the bureau estimated 866,000 discouraged workers in August 2013, which was down from 988,000 and slightly over 1 million workers in the immediately preceding months.

Bureau economist Steve Haugen agreed that the agency's quantifications of "discouraged workers" are often cited to tally people who have given up looking for work.

Alternatively, Haugen wrote, one could look at changes in the nation's labor-force participation rate, meaning the proportion of the civilian adult population either working or actively looking for work. That fell sharply during the recession, Haugen said, and "has continued to decline" even as the economy recovers. "The latest monthly figures suggest that the participation rate has continued to drift down over the past year," Haugen wrote.

Haugen added that while government survey results "generally don't enable us to precisely answer the question as to whether all of the decline in participation can be ascribed to persons who have abandoned their job search," related research suggests "that weak labor market conditions have played a role, as have longer-term demographic factors, such as retiring baby boomers."

Our ruling: Cruz told senators: "Every month, we get the reports from the Bureau of Labor Statistics that say even more people have given up looking for work." Per the 12 latest months of data available before Cruz spoke, the number of Americans considered by the bureau to be "discouraged workers" fluctuates month to month, sometimes going up and sometimes going down. We rate this claim, which has a thread of truth but ignores critical facts that would give an accurate impression, as Mostly False.

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Do you have questions about any the claims Politifact Texas has checked over the years? Are there any political statements or claims that you believe Politifact should put to the test? Politifact editor W. Gardner Selby will take your questions or concerns in a live chat at 11 a.m. Thursday at statesman.com. You can also submit questions before the chat via email at politifact@statesman.com

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(c)2013 Austin American-Statesman, Texas

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Original headline: PolitiFact: Jobless reports not consistently getting worse



Source: (c)2013 Austin American-Statesman, Texas


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