Fudging the unemployment numbers

When the news media reports a drop in the unemployment rate, it doesn't always mean the unemployed found work.

First, those who collect the unemployment statistics must know exactly who the unemployed are so they can be counted. The laziest way to figure that out is to look at everyone who is registered for unemployment benefits, and are actively calling in to collect their bi-weekly unemployment benefits.

Unemployment benefits run out. So the unemployed who still can't find work, can't collect anymore benefits, so they disappear from the database and are no longer counted.

If an effort is made to keep an account of the unemployed who no longer collect benefits, sooner or later their numbers must drop as they must leave the community to find work elsewhere.

When this occurs, the employed, which is a fixed number of workers can remain the same, and the statistics will still show that unemployment dropped.

So, if you're planning on starting a business in a community that shows a rapid improvement in the unemployment rate, watch your wallets, your likely moving into a trap.