Every month, when the labor and unemployment numbers come out, we parse through them, trying to get them to make sense. Jobs go up 110,000, but the unemployment number goes up with them – so this is bad.  Then they go up 90,000 and the unemployment number goes down – and this is bad, too.

The problem plaguing these numbers is The Curse of Unrealistic Expectations coupled with the Perils Of A Porous Population. This is, like in Star Trek, a Kobayashi Maru situation – an unwinnable scenario.

Every month, in advance of the U.S. Department of Labor’s official tally of jobs created or lost, there is much speculation among experts about how many net new jobs have been born. Inevitably, the experts guess too high, often by tens of thousands of jobs.

Then the numbers come out, and the government is blamed for not meeting the expectation of the experts. But no one ever seems to question those “experts” who, after all, are actually the ones getting the numbers wrong month after month.

Think of your spouse looking at your paycheck each week, and saying, “I expected it to be $200 more than this. Obviously, your policies are failing.”

With a media that’s unabashed about being brainless in its reporting, there’s no way to win when anyone can just say “well, those aren’t the numbers I was expecting.” Because that’s conflict, and conflict is what makes a story interesting.

Then, of course, there’s the actual unemployment percentage. When it goes up, it’s bad because that means more people have lost their jobs. But when it goes down, it’s often bad because it doesn’t necessarily mean that more people are working – it could mean that more people gave up looking for a job. But if they start looking for a job again, that’s also bad, because it will make the unemployment number go up again. So sometimes these people are counted, sometimes they’re not.

So there you have it: Kobayashi Maru.

Some bankers like to grouse about the unemployment numbers, too. It’s fun to take a whack at someone in authority when things aren’t going the way you want. But bankers ought to develop a little empathy, because they’re about to find themselves in a very similar situation.

Accounting For Accounts

Last week, the Federal Deposit Insurance Corp. and the U.S. Census Bureau unveiled the results of their biennial survey of people’s banking habits. Since the last survey two years ago, more than 821,000 people have become “unbanked” – meaning they aren’t using a bank account any more – or  “underbanked,” meaning they have a bank account of some sort, but have recently turned to alternative financial services such as a check-cashing services.

The agencies consider that rise bad, because it brings the total of unbanked households to about 10 million, or 8.2 percent of households in the country. The underbanked total rises to 20.1 percent, or about 21 million households.

The FDIC’s summation of the survey concludes that a lot of people simply find bank products too expensive. Many believe they don’t have enough money to warrant a bank account, either savings or checking. And they also don’t know enough about bank products to understand how they might be superior to alternative financial services.

This is what the FDIC euphemistically calls “an opportunity” for banks, and what consumer advocates call a failure to meet the financial needs of their communities.
These kinds of numbers enrage consumer advocates and bank-blamers, and will no doubt increase the already bulging pipeline of regulations coming out of the Consumer Financial Protection Bureau.

But like the labor and unemployment numbers, there’s a lot going on with these statistics that belie any easy interpretation.

The numbers are heavily dependent on who specifically answered the survey. If there’s a family of four living in a household, and the 16-year-old high school sophomore who happened to fill out the form says he doesn’t have a bank account (although Mom, Dad and Sis have one), this study counts the entire household as “unbanked.”  Conversely, if it happened to be Mom who filled out the form, and she admits that she happened to cash Dad’s paycheck at the supermarket last week, the entire household will be classified as “underbanked.”

The unbanked and underbanked, like the unemployed, are a porous population. Roughly half of those reporting themselves as unbanked say they had a bank account in the near past. Half also say that they expect to have a bank account soon, when their finances are fixed.

On the face of it, the survey seems to paint a picture of consumers, beaten by an unforgiving economy, then spat upon by greedy bankers who favor higher fees over a higher calling. But the numbers deeper inside make those assumptions questionable at best.

Unfortunately, in the court of public opinion and bloviating pundits, the surface story is the much more interesting one, and the one that bankers are going to have to fight hard against. But when numbers tell such opposing stories, finding the right strategy is daunting.

Maybe bankers can find their ammunition right in the very study that’s being used to attack them. One of the earliest, and hardest-hitting, conclusions is that many people are unbanked, or “becoming unbanked,” because of the cost of a bank account. This suggests that people are struggling financially, and that banks aren’t being sensitive to that. Yet, the FDIC suggests that banks should promote their mobile technology to show how convenient it is to use a bank.

If the underbanked can afford smart phones, why can’t they afford a checking account? Then again, maybe that’s a question better left to the employment “experts.”

Vincent Michael Valvo is CEO of Agility Resources Group LLC. He can be reached at vvalvo@agilityresourcesgroup.com.