What Record-Low Unemployment Looks Like in America
bloomberg.com
bloomberg.com
What it tells you is (mostly) how much unemployment will be paid out and (to some extent) how available workers are.
Anyway, "healthy" unemployment rate is usually 4%-7%.
The "right" metric is "employment rate," which is not the inverse. This is just the people working out of the working age population. It doesn't care whether people are unemployed, unable to work, retired, students, stay at home parents... Just how many people work.
This is usually around 60%-70%.
...so obviously "unemployed" leaves out the vast majority of non workers.
If you want to compare one area to another, for example, compare employment rates. Worried about techno-"unemployment," monitor employment rates. Slower, steadier societal effects will show here.
With the growing class divide and inflation, how much does being employed matter if you need two or three jobs to get by?
That figure has climbed slightly year over year, from 7.980 million to 8.130 million. That might imply slight stress in the labor market, in terms of cost vs wages, but nothing significant yet. It also might indicate there are some good paying side jobs that have become available due to the labor scarcity and people are snapping them up to improve their financial situation. The coming year will be interesting, as to whether the much anticipated wage growth finally shows up, or whether we're trapped in a Japan debt box of perpetual low inflation and low wage growth despite very low unemployment.
Curious how they count it.
The BLS routinely polls for why as well. Typically it's about 1/3 say it's to earn more money, 1/3 say it's specifically to deal with debt, and ~15% will say it's for enjoyment (they like the second job).
Multi-job holding peaked (all-time high) in 1995 at around 6.8%.
Still not quite what the OP wants, I suspect. I think we means "how many people earn enough to live decently, but that's hard.
I might be a 20 to student in Paris living on €1,200, consider myself fairly well off. House-sharing, couch surfing holidays, €1 drinks every Tuesday ..student living.
A 40 yo might consider this a poverty income. "Getting by" generally seems objective enough at first glance (rent on basic accomodation, etc), but culture and expectations play a big role. Also expectations about the future and stuff.
Basically , it's complicated. ..and outside the scope of an "measure," imo.
I think it's more useful to construct a picture from several simpler, more objective sources. Add up "living costs" to get your "minimum decent living' and then see how many people/households/workers have that much income.
It's never gonna be a real measure though, because "decent living" depends on circumstances.
This isn't what I was getting at. Take for example university students. Their earning power is significantly smaller than more experienced people. They also tend to need a lot less money, because they're usually single, don't often have a mortgage, live in a small apartment or in their parent's house, etc.
Many students work part-time in a restaurant or similar. For them, this will probably be a "livable wage", whether because their needs are smaller as discussed, or because they're relying to some extent on their parents.
Take another person of the same age, but who has a family and no parents for support, and assume they earn the same. For them, this same wage is not livable.
How would you statistically separate these cases? I'm not saying there isn't a way, I'm just wondering what it is!
"A man must always live by his work, and his wages must at least be sufficient to maintain him. They must even upon most occasions be somewhat more; otherwise it would be impossible for him to bring up a family, and the race of such workmen could not last beyond the first generation. Mr. Cantillon seems, upon this account, to suppose that the lowest species of common labourers must everywhere earn at least double their own maintenance, in order that one with another they may be enabled to bring up two children; the labour of the wife, on account of her necessary attendance on the children, being supposed no more than sufficient to provide for herself. But one half the children born, it is computed, die before the age of manhood. The poorest labourers, therefore, according to this account, must, one with another, attempt to rear at least four children, in order that two may have an equal chance of living to that age. But the necessary maintenance of four children, it is supposed, may be nearly equal to that of one man. The labour of an able-bodied slave, the same author adds, is computed to be worth double his maintenance; and that of the meanest labourer, he thinks, cannot be worth less than that of an ablebodied slave. Thus far at least seems certain, that, in order to bring up a family, the labour of the husband and wife together must, even in the lowest species of common labour, be able to earn something more than what is precisely necessary for their own maintenance; but in what proportion, whether in that above mentioned, or in any other, I shall not take upon me to determine."
Oh, silly me, Adam Smith, again. Wealth of Nations.
https://en.m.wikisource.org/wiki/The_Wealth_of_Nations/Book_...
There's a further bit on socially-determined necessities, beginning at:
"By necessaries I understand not only the commodities which are indispensably necessary for the support of life, but whatever the custom of the country renders it indecent for creditable people, even of the lowest order, to be without...."
https://en.m.wikisource.org/wiki/The_Wealth_of_Nations/Book_...
I'm certain there are some rather rich people who average over 50 hours a week, but its a starting point.
(those studies will often separate earned income from other income, so they do measure the impact of employment)
So employment churn is at historically low rates really. And this is good exactly why? Especially since the population to employment ratio hasn't changed at all since the great recession. This means you have a very non dynamic employment situation going on. That's actually not good and the Fed's preferred fix, having businesses fire a few percent of the workforce isn't a fix at all.
But for that, why not measure that directly, or churn directly.
This is not accurate. Almost the opposite is true. More people switch jobs when unemployment is low.
> So employment churn is at historically low rates really.
This is also not accurate. The US government measures job churn---it is called the Job Openings and Labor Turnover Survey (JOLTS)---and it is as high as it has ever been.
https://www.bls.gov/charts/job-openings-and-labor-turnover/o...
However, wages are starting to stagnate. It could actually be one of the reasons we are getting such high employment. The feedback loop will stop. We as a society will need to decide what to do when it no longer makes sense to employ most people.
You can almost trace it back to when Volcker broke the back of inflation.
That's one thing that makes the current posture of the Fed pretty interesting.
In other words, total comp is going up, but much of it is being funneled towards ever more expensive healthcare.
However, for business, the cost is just as real as giving employees a higher salary.
That being said, it ends up as a tax on dual income households, I don't get paid more if I opt out of my employer's health insurance even though it saves them a significant amount of money (~$5,000 a year). That's at the employer's discretion but in my experience most employers don't come close to matching compensation.
Um, that feedback loop existed until 1972 or so, but has not existed since then. For most people in the United States, it has never existed in their lifetime.
Michael Lebowitz: "So explain why monetary policy is still in emergency mode. Funds at 1.25-1.50 and over $4 trln balance sheet."
Kashkari: "I thought the "tongue-in-cheekiness" of my tweet would be obvious. Allow me to translate: We keep saying we are at max employment and then all these people choose to work. It suggests we weren't really at max employment."
Reggie Palatty: "Dude I loved you in the Mummy Returns"
Kashkari: "I was better in the original"
https://twitter.com/neelkashkari/status/972142317162369024
To take a step back, the official unemployment # is only important in so far as its in the Federal Reserve's dual mandate to maximize employment while keeping inflation steady and moderate. Kashkari's comments suggest that we haven't hit max employment, and that not even high ranking members of the Fed have a firm grasp on what "max employment" looks like in the contemporary economy.
Fed wants to wait until we hit "max employment" to begin normalizing, which is akin to pumping the economic brakes. Normalizing = raising interest rates + removing bank liquidity = increasing cost and friction of borrowing/loaning = slows down economic activity.
The real question remains: how will employment and the overall economy change when the Fed starts to normalize interest rates and reduce the securities holdings from QE on its balance sheet. In theory it should reduce the rate of job creation.
More info on normalization here: https://www.federalreserve.gov/monetarypolicy/policy-normali...
This measure was well under 7% at our last period of nearly full employment.
Looking at specific dates, raw U-6 is .9 less than a year ago. Seasonally adjusted U-6 is a full point less than a year ago.
That said, OP's complaint still applies for LFPR or NEET percentage, which as far as I know are moving opposite U3-6?
I agree, though, the U numbers are basically the definition of "fake news" from the standpoint of what you mentioned.
https://en.wikipedia.org/wiki/Unemployment#United_States_Bur...
Before that it got below 8% in the late 1990s because of an extreme stock market bubble, which was fleeting to say the least.
Not very good comparisons frankly.
Maybe these people who haven't found work just don't want to make $15 an hr working as a store clerk.
I'm probably counted different now that my six months of unemployment have run out. I didn't necessarily 'turn down' work but I also didn't apply for jobs that would have me driving over an hour one way for $12-15 for what is supposed to be a somewhat experienced position (IT work w/ a lot of requirements). This is in LA so shit's already experience.
Right now, I could've been working two weeks ago if a recruiter had had their shit together (interviewed and got job four weeks ago; actual paperwork took two weeks; when I could've started, they found out their contract w/ company had expired).
It's very frustrating out here even having done the things the media bullhorn has said to do - work in tech, work in an office, etc etc.
And what's happening with home ownership and real estate prices across the nation? For example, my development has 115 homes. Zero are for sale, and the last sale was nearly 1 year ago. There is no inventory.
Does it constitute a virtuous cycle for the economy? Next up, inflation and increasing interest rates as the fed works to keep the economy from overheating.
It hit 155.2 million in February. The highest number of people that have ever been employed in US history.
By comparison, that number was 143 million just five years ago. The prior peak before the great recession ten years ago, was 146 million.
It's not the record for labor force participation rate obviously. That will never be hit again, thanks to the US aging.
Maybe, but not necessarily. The Labor force is defined as those of "working age", so if they age out of the tracked range, then they no longer accounted for in the labor force participation rate calculation.
There may be a general population participation rate (not sure if I have the right term here) for which your comment could be projected if current demographic trends hold, but that can be shifted by things like shifting immigration or fertility rate trends.
This was a big headline the other day:
"People over 65 years old would outnumber children by 2035, a first in U.S. history, according to updated projections released by the Census Bureau on Tuesday."
https://www.wsj.com/articles/elderly-in-u-s-are-projected-to...
As long as the US continues to maintain a comparative advantage in certain industries (e.g. software) I see no reason why they will be immune to wage inflation either. In fact this is arguably already occurring
http://www.shadowstats.com/alternate_data/unemployment-chart...
?Downvoting for the truth?
https://www.theguardian.com/us-news/ng-interactive/2017/dec/...
General homelessness was 5,376 in 2000. It was 6,248 in 2005. It was 6,686 in 2015.
SF is doing an extraordinarily poor job of managing its homelessness, despite their affluence and vast resources. That's the fundamental problem.
"Unemployment" has been such a gamed term, especially since the Great Recession (at least, from my current perspective), that someone would have to argue me back to believing, to any significant degree, the numbers they are posting and stories they are telling about same.
For example, a common criticism about the US employment picture, on sites such as zerohedge, is to claim that it's all part time work. We have these numbers however, so there's no need to speculate.
Part-time workers as a percent of the total employed, is at the same level it was in 1999. Around 17.7%. That rate continued to move lower until mid 2000, when it hit around 16.7% before the recession.
Employment for 27 weeks or longer (1/2 year or longer), is back to a healthy level, where it was during the good times in 2005-2006 and matching 1996-1997. Employment for the other duration periods has seen a similar recovery.
The long-term unemployed as a percentage of the total unemployed, is back to 1995 and 2005 levels.
All the more impressive, these vast improvements are coming down off of an extreme hammer to the labor market from the great recession. The ~2001-02 recession was a blip by comparison, and yet the labor market has managed to get back to what would be considered healthy numbers in both the mid 1990s and mid 2000s. In fact, compared to the 1970s and 1980s, current numbers would be considered amazing.
And further to the positive side, the benefits of this labor improvement have been entirely wide-spread. Black, white, asian, hispanic, everyone is seeing a labor boom.
As an aside, politically, I'm entirely unwilling to credit this to the last year. My own prior reading (ok, mostly of news articles, albeit reasonably well-informed ones), described such effects as typically being a minimum of a year out from policy initiatives. 18 months being a more typical minimum.
The Great Recession hit me hard, and I've not seen the bounce back. Nor have others I know in my age bracket (later middle-age). That may color my perspective.
The country spent years digging out from the last financial disaster. And not the messaging seems to be, if you didn't grab as much as you could, it's your own fault.
P.S. And I do recall, a few years ago, the emphasis upon short term unemployment rates, avoiding discussion of the long-term unemployed and those who'd, from the perspective of the parameters of the statistical exercise, exited the labor market.
Thank you for addressing that to some extent. I do wonder, though, within specific demographics, what the levels of such may continue to be.
Have an upvote. I'm not complaining about your response -- to be clear. :-)
I'm in full agreement with that. This is a multi-stage procession of factors stretching back to 2010-2011. Economies, left well enough to their own and barring any extreme events, tend to improve/recover naturally.
I also think we're going to need more time to fully recover from the severe damage that occurred during the great recession. The complex effects and suffering of that kind of hit are well beyond the headline numbers and should be expected to take many years to heal. Economists are puzzled by wage growth not being higher (eg 3.5% vs 2.5% or similar) based on where unemployment is at - I think it's because we've only just got back to something close to a healthy labor market, whereas they think we're in the midst of something a notch or two higher than that already. To recover from economic trauma, it's not enough to just return to former headline numbers, you actually have to recover from the psychology damage (as is well known the great depression, which was of course even worse, left people traumatized for life). People behave differently after that kind of trauma, they make different choices, they fear risk more (which can lead to job stagnation, or fear to pursue better opportunities etc), and so on.
Trump may or may not unleash some so called animal spirits, in his rah rah behavior and policies (and or harm as much, from strategically poor thinking on trade), however the economy was grinding this direction likely regardless of anything the President might do. Very generally speaking, outside of insane policy settings (eg a corporate tax rate at 70%), if you manage to not upset/crash an economy for an extended period of time, and otherwise maintain a reasonable playing field, you'll see amazing economic gains over time leaving your people to their own pursuits. I regard our challenge right now, as being to sustain this tight labor market as long as possible to push beyond mere recovery and into fundamental generational improvement for everyone (everything from the median wage, to the median net wealth figures, to wages for blacks and hispanics, to what are considered minimum wage levels, and on to job benefits). The tight labor market, if sustained long enough, will claw back some of the share of profit toward labor, and I expect the wage & benefits increase over time can be considerable given the vast profit levels in corporate America today. Even if you held wages relatively steady and increased things like vacation time or maternity leave, it'd be quite an improvement.
The labor force participation rate describes how many people of working age are trying to work. 'NEET' stats remove from that number education or vocational training students.
And economists use multiple definitions of unemployment accounting for many different things. U3 is commonly cited, but misleading for this purpose. U4 captures people who want to work but assume it isn't available, U5 captures other unattached workers, and U6 even adds part time workers seeking full time work.
A nation's unemployment rate should be a reflection of the economy's ability to employ it's populace. Not how many people actively have jobs.
(Employed / seeking employment) is the U3 employment rate - it's a perfectly legitimate statistic for understanding how the job search is going. When economists want to count the temporarily discouaged, they use U4. And when they want to count those not working for other reasons, they use U5. It's annoying that we treat U3 as "the unemployment rate" for political discourse, but it's a perfectly reasonable metric for economic analysis, and I wish people would stop pretending it's some kind of trick.
I’ll tell you why – because it’s not true.
https://www.bls.gov/news.release/empsit.t15.htm
U6 is: Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor force plus all persons marginally attached to the labor force
The national U6 right now is 9.2 (unadjusted).
Neither of those assertions is either in the article, or supported by fact. The vast majority of workforce members are employed and live well above the poverty line.
I truly don't understand why there seems to be a belief that every single job that exists should provide a 'living wage'. There is such as thing as a starter job, and there types of jobs that don't provide 25-50K/yr in value to either the employer or market. It's just not reasonable to presume (or enforce a policy such ) that any amount or type of work a business owner needs done should automatically result in the employee being completely taken care of.