The CDC has two different terms. Vaccine Efficacy is measured using a double blind randomized placebo test.
If the people who got the vaccine got the targeted disease 20 times less than the people who got the placebo, then the vaccine efficacy would be 95%. Getting the vaccine seems to make you 20 times less likely to get the disease than you would if you’d got a placebo.

Vaccine Effectiveness is what they usually talk to you about.
Here’s how they often measure vaccine effectiveness, especially I’ve noticed for flu vaccines. “Vaccine effectiveness was estimated as 100% x (1 – odds ratio [ratio of odds of being vaccinated among outpatients with influenza-positive test results to the odds of being vaccinated among outpatients with influenza-negative test results])” http://www.cdc.gov/mmwr/preview/mmwrhtml/mm6401a4.htm
In other words, they take people presenting to the Doc for a respiratory illness and divide them up into 4 groups, first by whether they got the flu vax, and second by whether they have the flu or some other respiratory complaint. Let VF be the guys who were vaxed and have flu,  VI be the guys who were vaxed and have some other respiratory infection, NF be guys who weren’t vaxed and have flu, and NI be guys who weren’t vaxed and have some other respiratory infection.
Vaccine Effectiveness = 100% X (1-(VF/NF)(NI/VI))

Now the obvious problem with this is, you get a high Vaccine Effectiveness if a lot of people who get the flu vaccine get sick with other respiratory illnesses, independent of whether it helps with the flu. There are three problems with this.

(1) This formula seems likely to generate a substantial VE even if the vaccine were actually a placebo. It seems very plausible that people who are likely to go to the Doctor with a respiratory illness are more likely to get Vaxed for flu, either because they are more reliant on doctors, more hypochondriac, or genuinely sicklier. People who never get colds are unlikely to go for flu shots. On the other hand, when they actually get the flu, they’ll come in. If many vaccinees are coming in with imagined or minor respiratory complaints and non-vaccinees are not, that would generate a good vaccine effectiveness for a placebo. etc.

(2) Even more importantly, a flu vaccine will get a high effectiveness rating if it causes recipients to get a lot of non-flu respiratory illnesses by damaging their immune system. If the only effect a flu vaccine had was to cause recipients to get 4 times as many non-flu respiratory illnesses as placebo recipients, then you would find a vaccine effectiveness of 75%.
If a flu vaccine made you twice as likely to get the flu and 4 times as likely to get another respiratory illness, you would find a Vaccine Effectiveness of 50%.

By a striking coincidence, vaccine recipients getting 4 times as many respiratory illnesses as placebo recipients is what was reported in the only Randomized placebo control of a flu vaccine that followed the health for more than a few months that I’ve ever seen.   http://www.ncbi.nlm.nih.gov/pubmed/22423139
Of course, since this landmark placebo controlled study, not only have I not seen it repeated with other flu vaccines, I also haven’t seen the authorities question measures of vaccine effectiveness which would only conceivably make sense if the vaccine were already known not to be doing damage.

There is also a consistent case in both human and animal studies reporting that flu vaccines damage CD 8+ T cells and harm immunity to other diseases than the vaxed. Vaxed animals died from diseases the placebo animals fought off.
http://www.ncbi.nlm.nih.gov/pubmed/21880755
http://www.ncbi.nlm.nih.gov/pubmed/20335492
http://www.ncbi.nlm.nih.gov/pubmed/19440239

http://www.ncbi.nlm.nih.gov/pubmed/22525386 Children seen at the Mayo Clinic for flu 1996-2006 were 3 times as likely to be hospitalized if they had had a flu shot as not.

http://journals.plos.org/plosmedicine/article?id=10.1371/journal.pmed.1000258 Association between the 2008–09 Seasonal Influenza Vaccine and Pandemic H1N1 Illness during Spring–Summer 2009: Four Observational Studies from Canada

(3) The second law of thermodynamics says its a lot easier to screw things up then to fix them. If vaccine makers are being rewarded for screwing up immune systems, you can bet they’ll figure out how, especially if they are indemnified against any damage they cause. Even if they have the best of intentions. Getting a vaccine that protects against a specific flu strain you can’t even predict easily, without in the process screwing up the immune system or the health of the recipient, that’s an incredibly hard project. I don’t believe anybody is even capable of it. Getting an injection that screws up the immune system so recipients get more respiratory illnesses? You could probably do that pretty quick by trial and error. When you blundered into it, you’d get rich and everybody would tell you you were a genius and saving mankind.