Sneaky Ways to "Decrease" Unemployment

Today the President and HHS announced that they will be considering and granting waivers that allow states to provide welfare benefits to healthy people who are not looking for a job. 

More here.  And many other places....

Here's the deal.  The 1996 Welfare Reform Act, among other things, instituted a requirement that welfare recipients without medical disqualifications pursue employment.  People on welfare do not have to find a job, but they have to look for one, be trained for one, or attend substance abuse counseling.  The intent of this reform was/is to give an incentive (and incentivise the means) for people to get off welfare.

To my knowledge, this decision by the Obama administration does not require states to give welfare to the nonworking able-bodied, but rather would allow states to allow for waivers to do just that.  If this administration's past experience with waivers is any indication, these waivers will be handed out, used, for political reasons. 

But maybe this is really just because this administration really believes that expecting people to find jobs is mean, unfair, and not sensitive enough to the current world.  That's the most benefit of the doubt I can give this decision.

Even when cast in the most positive light possible, something shady still  exists. 

Unemployment is calculated in part by looking at how many people are being helped find jobs through state agencies.  To be counted in the unemployment statistics you must be looking for a job.  So if in some/many states there is some number of welfare recipients who have been looking for jobs as a requirement to receiving their welfare, and suddenly that requirement is removed so they stop looking for work, it will appear that in those states the unemployment rate has decreased - WITHOUT A SINGLE JOB BEING ADDED. 

Obama desperately needs people to think this country is headed somewhere positive.  He has three jobs reports before the election, and he needs them to show positive change.  Is this one way to try to cook the books? 

Come to think of it, most states could show a "decrease" in their unemployment by getting this waiver.  Such a decrease could help incumbent governors get reelected.  I wonder what percentage of Democrat compared to Republican governors who ask for waivers will get them....

This could also be a way to blunt the report that came out last week about how all the states with newly elected Republican governors have seen budget turn-arounds and reductions in unemployment. 

Crafty.  Like with statistics, polls, and so much else in life, the practicing economist always has to look at the data and methods.