Now the entire lot apply for jobs at your company, and you hire two of those who can code. Within 3 months the rest of the good ones have found jobs, but 30 others have temporarily been unemployed and none of the bad ones have been unemployed.

So you interview again and roughly 40% of the programmers you interview can't code. But that doesn't mean that even 5% of the programmers out there can't code, it just means it is the same bad programmers that interview in lots of places.

It is the same when employers say they are getting ten or twenty job applications for every open position - that doesn't mean anything because everybody who is unemployed applies to more than one place, but from only one side of the fence it sure looks like that.