In the President's State of the Union speech on 1/27/2010, he said the following, "Because of the steps we took, there are about two million Americans working right now who would otherwise be unemployed." Two million, wow. That's a big number. First, let's think about what that means.
Right now unemployment is 10% with 15.3 million people unemployed. So if President Obama's number is accurate, then without the Recovery Act or 2009, there would be 17.3 million people unemployed. That would be an unemployment rate of 11.3%. (Click here to see how I got this number.)
So if this number is correct, it is a significant number. That is a lot of change. To be confusing with percentages, the change from a 10% unemployment rate to an 11.3% unemployment rate is 13%. (Click here to see how I got this number.) Sorry, I know the percentages all look the same.
I decided to research the validity of the 2,000,000 jobs number. And where else better to start than the government's own Recovery Accountability and Transparency Board. According to their numbers, which were last updated in October of 2009, there have been 640,329 jobs saved/retained by the Recovery Act. Of course, it is possible that more have been created or saved since October, but from 640,329 to 2,000,000 is an increase of 1,359,671 jobs, or an increase of 212%! (Click here to see how I got these numbers.) That's a big increase, Mr. President.
But wait. The government has changed how they calculate the number of jobs created/saved. It's now based on the number of salary hours being paid for by firms who received recovery dollars. But it includes all jobs created since the company received the recovery money, all jobs they were going to eliminate but didn't due to recovery dollars, and all jobs that they would have kept anyway, but are still paying for using Recovery dollars. That's not just jobs created or saved. It is also jobs that are being paid for anyway. Not the same thing. I'm not saying this method is illegal or immoral, but I do believe that it's misleading and not a good example of full disclosure. But it wouldn't sound as good in a televised speech to say, "Because of the steps we took, there are about two million Americans working right now who are being paid by Recovery dollars we got from you, the taxpayers, some of whom would have kept their jobs anyway."
The lesson: when you hear big numbers sound big. That doesn't mean they actually are.
15.3 million + 2 million is 17.3 million.
Now if 15.3 million unemployed corresponds to 10.0% unemployment, what does 17.3% correspond to?
15.3/10.0 = 17.3/x
We can multiply both sides by 10.0x and we get 15.3x=173.
Divide both sides by 15.3 and get x=173/15.3=11.3.
Click here to return to the entry.
A percent increase is the amount of increase divided by starting number then multiplied by 100%.
(11.3%-10.0%) is 1.3%, that's the amount of increase.
Next divide by 10.0%, the starting amount. 1.3%/10.0% is 0.13.
Finally multiply by 100% and we get 13%.
Click here to return to the entry.
Again, a percent increase is the amount of increase, divided by the starting number, then multiplied by 100%.
(2,000,000 - 640,329) = 1,359,671. The amount of the increase.
Next divide by 640,329, the starting amount. 1,359,671/640,329 = 2.12
Finally multiply by 100% for a 212% increase! Big increase!
