America's True Unemployment Rate
axios.com
axios.com
There are also serious regional differences in what such a wage might be. $2000/month is enough to live comfortably with a personal car in low cost of living regions. In NYC it means you are probably stacked into a decaying apartment with many other people with no car.
If that 2k/mo comes with reasonable health insurance and some retirement plan.
> The maximum possible Social Security benefit in 2020 depends on the age you begin to collect payments and is: $2,265 at age 62. $3,011 at full retirement age (65-68). $3,790 at age 70.
While many do retire on less, they also contributed less over the years and so are used to living on less. However we can safely say that if you only get $2000/month you retired too early and this should have been an intentional choice - retire early to a lower standard of living.
That said, the standard unemployment measure the author is objecting to is just as (more really) disingenuous in practice. It also stacks confusion. "Unemployment" used as a primary barometer for the labour economy.
People (including journalists, politicians... high stakes stuff) assume that unemployment captures most unemployment. They don't consider that most unemployed 58 year olds are not counted because they "retired," stopped seeking work or receive a disability benefit. When/if these become substantial, the measure means very little.
Every time a journalist note record high/low unemployment of X%, it's probably just as deceptive or (more likely) misleading. The measure itself means something different in 2020 than it did in 1980, or in a different country/region.
At least the "true" appendage makes clear that there are differing and divergent ways to measure unemployment, and that these cn result in huge differences.
Why should any of these people be considered "unemployed"?
Every time there's a discussion of unemployment, or inflation, people bring up the measurements as "misleading". The BLS tracks this stuff because people in the real world need to use it, not because there's some disingenuous political purpose. There are a ton of different metrics to get a broad picture of the labour market, as defined, and they put them out there, free to use. The idea that the army of economists at the BLS don't understand things like people being retired is just wrong.
We spend a lot of time criticizing journalists and politicians, but how many people bother to look at the data themselves if interested?
Because we're actually trying to count "people who would be employed, were there more jobs available"
But as we can't read people's minds, we can't tell the person who's happily retired at 58 from someone the same age who'd rather be in work but can't find it, and has started drawing their pension out of necessity.
Wouldn't any such effect be temporary though? As wages rise, doesn't inflation rise as well, negating the benefit of a rising wage.
Wouldn't it also be true that as certain goods deflate in price, labor force participation should go up as well since the same wage allows you to buy more stuff?
This goes back to wealth isn't the money you have, it's what you can buy. Today most people, even those at the bottom, have access to many things today than even John D. Rockefeller didn't have access to when he was alive.
Anyways, not asserting anything in particular here, but just raising that it seems far more complicated than just wages rising lead to greater labor force participating.
No. Inflation is primarily caused by the government printing money, not by rising wages.
If wages rise but productivity does not increase, yes, that will cause inflation, but if productivity is not increasing wages cannot rise because there is nowhere for the increased wages to come from.
If wages rise because productivity is increasing, there are more goods and services available, so supply keeps up with demand and prices don't rise. (In fact they will generally fall in the areas where productivity is increasing, if the money supply is not being messed with.)
> Wouldn't it also be true that as certain goods deflate in price, labor force participation should go up as well since the same wage allows you to buy more stuff?
There will probably be more people willing to work, yes. Whether that translates into more actual jobs will depend a lot on how easy it is to start new businesses, since that's where the new jobs will have to come from. Our current regulatory regime makes it much more difficult than it should be to start new businesses.
> wealth isn't the money you have, it's what you can buy. Today most people, even those at the bottom, have access to many things today than even John D. Rockefeller didn't have access to when he was alive.
This is a very good point, which I wish more people would recognize.
A change in the savings ratio could also cause demand-pull inflation without an increase in printing money. As could a change in reserve requirements.
There are also cost-push inflation from things like oil supply shocks, poor farm yields or changes in exchange rates.
I would also expect changes in the aggregate balance of payments between a country and all its trading partners to impact inflation experienced by people in that country.
Theoretically it certainly can be. To take the simplest idealized example, if the production of goods and services is unchanging, and people's needs are unchanging, the only possible source of price changes is a change in the money supply.
In the real world, of course, the quantity of goods and services does change and so do people's needs. But that just means the price system now has a genuine function: to inform people about the changes in supply and demand through changes in prices. Messing with the money supply just obfuscates those price signals with an arbitrary quantity of noise. So while it's true that messing with the money supply isn't the only cause of price changes in a real economy, that's certainly not an argument that printing money is okay.
> If all the wealth currently currently squirreled away in places that banks can't trivially lend out (art, real estate, etc.) were instead cash in the hands of the lower and middle classes, I would expect a lot more money to be chasing those goods and services against which we measure inflation.
That would depend on where the cash came from. In the case of real estate, for example, if you want a mortgage, the government will print most of the money (all but the three percent or so that banks in the upper reserve tranche have to put up--but IIRC even that minimal requirement was waived by the Fed fairly recently). So turning real estate into cash (by, say, taking out mortgages to buy homes from lower and middle income people who have more house than they want or who would rather rent instead) just means the government prints more money. Which will indeed increase average prices, but that's just an example of what I was talking about.
If, OTOH, you're talking about something like auctioning off expensive art works and using the money to start a business that employs people, so those people now have more cash to spend, that just means a transfer of cash from whoever buys the art works. That won't affect average prices at all; it will, however, increase the price of art works (assuming that the supply of those is basically static) and decrease the price of whatever things the people who bought the art works would have bought instead. Those two changes will cancel out on average.
...is changes in expectations about future needs or productivity.
Or are we pretending that the omniscient, time-unbound actors of rational choice theory are a real thing?
Which are only rational if such things in fact have changed in the past. In that particular hypothetical of mine, they don't. And everyone knows that, the same we we all know in the real world that such things do change. That doesn't require omniscience; it just requires ordinary knowledge of the past and common sense.
Of course in the real world, as I just said, such things do change; but, as I said in my earlier post, that just means that monkeying with the money supply masks real price signals that should not be masked.
There are other possibilities. Suppose that employers gain bargaining power relative to the workers, but people are really resistant to taking a pay cut. The employers all raise prices instead.
Not in that particular hypothetical. All the things you cite are only relevant in a world where things do change. So if you want to talk about that world, it's pointless to respond to a hypothetical of mine where that kind of change is ruled out to make a particular point.
> Suppose that employers gain bargaining power relative to the workers, but people are really resistant to taking a pay cut. The employers all raise prices instead.
In the real world, where things do change and everyone knows and expects that, how do employers magically "gain bargaining power relative to the workers"? The only way that can happen, if the government is not messing with things (the money supply, but also other things, like the laws and regulations that govern employment), is for some technological change or some exogenous factor to favor employers over workers. And if that happens, and you're a worker, yes, you just got blindsided by change, and if you're an employer, you just got an unearned benefit (assuming you're not the one who actually invented the technological change). Welcome to the real world.
Of course, in the real real world, where the government does mess with things, there are plenty of ways for employers, particularly large corporations that have lots of cash, to gain bargaining power over workers without having to do anything to earn it. And yes, workers would probably be resistant to taking a pay cut, since they know that the bargaining power the employers are trying to use against them was not earned. And yes, employers would probably raise prices instead. And the best way to prevent all that is for the government to stop messing with the economy, so employers can't buy their way out of bad business practices.
I'm talking more about on a practical level in terms of the prices that most people will see/experience when they are going about there daily life. I even cited very real examples of both demand pull and cost push inflation that have nothing to do with the money supply. These as far as I know are all examples acknowledged by economists as causes of inflation.
If for example tomorrow there were a super volcano explosion and a catastrophic decline in the world's food supply, we would see a massive spike in food costs. Everyone needs to eat and the food supply would be limited, so prices will go up. Since food costs are an input cost for the well being of all workers around the world, we should expect that there will be upwards price pressure on many goods and services used to measure inflation most people actually feel and experience.
It's quite true that people are used to seeing a particular price level, and changes in either direction tend to cause them problems, even though, abstractly speaking, decreases in prices should be seen as a good thing.
> I'm talking more about on a practical level in terms of the prices that most people will see/experience when they are going about there daily life. I even cited very real examples of both demand pull and cost push inflation that have nothing to do with the money supply. These as far as I know are all examples acknowledged by economists as causes of inflation.
And this is a misuse of the term "inflation", because "inflation" is supposed to be bad, and so economists are basically trying to argue that the natural ups and downs of business, which are unavoidable in a world where things are constantly changing and nobody has a crystal ball, are bad things that the government needs to intervene to stop. We would all be much better off if economists would stop peddling such nonsense and just frankly admit to us all that, well, the natural ups and downs of business are unavoidable in a world where things are constantly changing and nobody has a crystal ball--not even economists.
> If for example tomorrow there were a super volcano explosion and a catastrophic decline in the world's food supply, we would see a massive spike in food costs
Yes, and what would happen next?
In a sane world, what would happen is that entrepreneurs would start figuring out ways to produce more food, because there is obviously a huge need for that, as shown by the huge price signal in food. Maybe they would build huge greenhouses with solar lamps powered by nuclear electricity. Maybe they would figure out how to harvest algae in quantity to make algaeburgers.
In our actual world, what happens is that governments wring their hands and pontificate and monkey with the economy and make things worse instead of better.
Opportunistically earning some extra cash is a lot different than having to work for a living.
Exactly. Which means you can't count what you say you're trying to count. What you're trying to count requires telepathy.
That's why economists look at revealed preference--what people actually do, not what you guess they might be thinking. So the correct way to see if there are people who would be employed if there were more jobs available, is...to let private individuals start new businesses and see if the increased number of jobs increases the number of people who are employed. But that would require the government to stop trying to micromanage everything, which is why the obvious solution of making it easier to run businesses so that more people will start them in order to create more jobs is a nonstarter politically.
Being easily and consistently measurable is one virtue. It's nice that "unemployment" can be measured this way monthly without too much measurement controversy. Useful for charting trends with high resolution.
That doesn't change the fact that it is not an estimate of "unemployment," defined in a way that we care about more. If you ignore the involuntarily retired 58 year old because measurement is subjective then you are undercounting by a lot. You're not undercounting evenly, especially over time, geo or in extreme circumstances (like recession).
It's an issue if the primary unemployment measure does not even estimate "unemployment" harmonious with a common sense definition
https://www.bls.gov/news.release/empsit.nr0.htm
and the numbers:
https://www.bls.gov/news.release/empsit.t01.htm
It's actually kinda straightforward, and very clear about what measures they're using. The numbers are bit scary - "The employment-population ratio, at 56.6 percent, changed little over the month but is 4.5 percentage points lower than in February."
"The number of persons not in the labor force who currently want a job, at 7.2 million, changed little in September; this measure is 2.3 million higher than in February. These individuals were not counted as unemployed because they were not actively looking for work during the last 4 weeks or were unavailable to take a job."
So that's 12m officially unemployed, plus 7m "not in the labor force" but who want a job.
So yeah, the article is kinda on point; that the numbers don't mean what they think we mean. But I have to agree: that's not because the numbers aren't available for anyone to look at and understand.
54.0 million over 65
48.9 million on disability
328.2 million total population
185.8 million people employed at 56.6% employment
128.1 million people not employed (including children)
54 million people not employed, but marginally employable (max income is $1,260 per month if on disability and $18,240/yr when retired)
In any case, under-employment is still a bigger issue than unemployment.
That said, the real figures are still startling. They represents 4.4% of the US worker population but some states rely incredibly heavily on the program.
Alabama - 8.0% of the population
Arkansas - 7.9% of the population
Kentucky - 7.6% of the population
Maine - 7.4% of the population
Mississippi - 7.5% of the population
West Virginia - 8.6% of the population
The reality is that "unemployment" is a highly visible metric. Sure, the data itself is available... A big part of the reason why it's important to have this data available is exactly for this purpose: call bullshit on the unemployment numbers when necessary...
...especially considering that "want a job" is measured in very specific ways.
Is it though? The photos of queues for jobs and unemployment benefits is something of the distant past. Find out that a different measure makes the rate 3x higher came as news to me.
There is absolutely no purpose other than propagandistic for the percentage commonly referred to as "unemployment" with no other qualifiers. That number's only purpose is to start dropping a short time after an unemployment shock whether or not any jobs were actually added to the economy.
The other numbers aren't to give a "broad picture" of the labor market, they're to give the entire picture of the labor market. "Unemployment" contributes nothing. At the time of a shock it echos other metrics, and after a pause of a few months it announces that whatever the administration announced its reaction to the shock would be is starting to work, no matter what the other numbers say.
Because they still need to find work to live, pay heath expenses, and so on, and can barely make it in third-world style conditions without it...
Third world conditions are much worse than that. I've seen families sleeping on sidewalks. No car, no health care.
Sure everybody wants more. There are a lot of retired people who would like a job, but that is as much about the social connection as money. There are also those who lost their money (scams target retired people) and need a job, but that isn't most of them.
My father turns 70 in three days, and he has struggled to find long-term work for the last ten years. He'll work for a year, search for work for 15 months, work for another 18 months, etc. He would like to be working now, but COVID-19 probably marks the end of his working days forever.
He's been counted as retired a few times during the last decade, though he never was until this year.
At least twice in the last decade, he's been unemployed so long his benefits ran out. Perhaps the label in that case isn't "retired," but he wasn't counted as unemployed, either.
The BLS tracks six measures of unemployment rate via survey called U1-U6. U3 is the official unemployment rate, but they report the others as well[1].
For U3, you are considered unemployed if you do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work. U4 is that plus anyone who wants a job, but gave up looking because they don't think they will find one. U6 adds in people who only have part-time work but want full-time work.
[1] https://en.wikipedia.org/wiki/Unemployment#United_States_Bur...
They basically survey 60,000 people and ask a specific set of questions to figure out which "bucket" people are in.
The reported U-3 unemployment rate is measuring the rate of full-time job loss in the economy. That makes a good barometer of the economy as it can describe if job losses are accelerating or not.
You can pick any of the alternate measures and they all say pretty much the same thing. But by overlooking those who have dropped out of the labor market, the U-3 focuses more on what is happening with the labor market now not several years ago.
You can try this for yourself by plotting the U-1 through U-6 rates on the same graph and picking the one you think is most useful as a snapshot of the labor force. You'll probably land on the U-3 as the U-1 doesn't show upticks in unemployment very well and the U-6 muddies the severity of upticks in unemployment. The broad strokes will be the same, but the nuance is missing.
I think this is a perceptive statement; U-3 is most like the derivative of unemployment, so it's sensitive to changes, but not to steady-state issues.
We should probably look at U-6 to help understand where we stand long-term, and U-3 to get a glimpse of whether things are getting better or worse. Unfortunately, I don't think many people want to think about these issues separately, so they'll only want one number.
There is no abstract reason, unless we're just talking about what the word unemployed "really" means. Pointless semantics.
The reason they should be considered unemployed is contextual. "Unemployment" is the measure used by journalists & politicians to gauge the labour market. In that context, it is very important to consider these people who have stopped expecting to work unemployed. They are part of the "slack." Their experience experience of the labour market is "i can't get a job."
If unemployment is lower than it was in year X because people stop applying or qualifying for some unemployment benefit... that doesn't mean the labour market is better.
Everything is contextual. People arguing for alternative unemployment measures aren't (generally) arguing semantics. Their arguing that the metric is misleading us.
if you want to know how well we're allocating our (labor) resources as an economy, it's important to get a full picture of how many capable people are un-/under-employed.
when we make national economic policy, it should be to make meaningful progress toward putting all of our capable and willing people (true unemployment) to highest and best use, not arbitrarily just those who have recently become un-/under-employed (nominal unemployment).
There is no single "we" who allocates those resources. That is a fundamental fallacy in this whole way of looking at things. We seem to have this belief that, if only our government experts could find the right aggregate measure and micromanage the economy based on it, everything would work just fine. That belief is false.
> when we make national economic policy, it should be to make meaningful progress toward putting all of our capable and willing people (true unemployment) to highest and best use
That's not something the government should even be trying to do, because no central planning entity can do it.
What the government should be doing is guaranteeing a level playing field, and letting freedom work. Historically, times when the government has done that have been the times when the US economy has created the most wealth.
wealth by itself, especially as we measure it, is hollow and a poor collective goal, and its singular pursuit expressly undermines the level playing field and much of our humanity. prosperity is a more holistic expression of our collective goal, with wealth creation not being the principal ingredient of prosperity. industry, purpose, solidarity, community, well-being, welfare, success, esteem, respect, free expression, etc. are all (much) higher on that list.
it behooves us to look beyond simplistic ideologies (which only benefit the political, by collapsing our horizons insidiously) to perform our duties and responsibilities to each other as a society.
But none of us have the power to run the entire country, and we couldn't do it properly even if we had the power. So saying that "we" should do things that are beyond our power is pointless.
If you think not enough people have jobs, start a business and hire some. If everyone who complains about unemployment went and did that instead, if it didn't completely solve the problem, it would certainly make a huge dent.
> the government is the power apparatus that is meant to express and realize our common good.
If "our common good" just means ensuring a level playing field and letting freedom work, sure. That's what the US government was originally intended to do.
However, governments today have gone far beyond that to try to dictate to everybody what "our common good" should mean based on some particular interest group's ideas about social policy. That is a recipe for disaster, and we should stop doing it.
> wealth by itself, especially as we measure it, is hollow and a poor collective goal
I'm not sure what you mean by "as we measure it". If you mean that "we" measure it in money, then of course you are correct: money is not wealth.
If you measure wealth as economists actually measure it, however, by the possibilities that are open to people--the range of things they can choose to do with the resources and options available to them--then people today are wealthier than pretty much every human being who ever lived.
> industry, purpose, solidarity, community, well-being, welfare, success, esteem, respect, free expression, etc. are all (much) higher on that list.
If you think these are valuable things, then go build them.
If you think government should dictate to people that they need to build these things, whether they want to or not, IMO you are being inconsistent, since the whole point of all these good things is that people can only do them voluntarily; if they are forced to do them, you don't get them, you get sham imitations instead. So once again, government should not be used to impose these things on people; it should be used to ensure a level playing field so free people can build them as they see fit.
Well, right now they are "macromanaging" it away from a system that could possibly work. Central bank policy heavily skews toward capital and thereby into deflation (or at least lack of inflation). Inflation is the treadmill that keeps the economy going and it has been broken for a long time.
The more I get into economics the more I understand that the real world is not meaningfully different from a game in terms of policing. The details are different but general concepts like deflation or inflation are still the same. The fact that economies can only function if money is in the hands of those who are doing the work is still the same. In the most realistic economy games it is even possible to liquidate your company and start fresh after messing it up. So there is now the obvious problem that if you want a growing player base you can't just let the biggest players take over 90% of the market and force newcomers to compete with them and let almost all of them fail like in the real world. Unemployment can't exist in such a game, "unemployed" players aren't playing the game!
Well, the obvious answer to solving unemployment is a job guarantee funded through "printing" money. If people are unemployed they will take the job guarantee which in turn creates new money. Suddenly there are lots of paying consumers but since the guaranteed job doesn't actually increase the supply of goods we get to see inflation among consumer goods. Now you may be thinking that this will cause runaway inflation except it can't. When demand for products increases, so does the demand for labor. New jobs are created which pay more than the job guarantee but they don't cause inflation. It's a self balancing system.
Yes, but not the way you are claiming.
> Inflation is the treadmill that keeps the economy going
If by "inflation" you mean printing money, no, that is noise in the price signals that keep the economy regulated. And as central banks print more and more of it, they mask valid price signals more and more and thereby make the regulation of the economy worse and worse. And then they claim they need to print more money to "fix" the problem.
If by "inflation" you mean "prices going up", if the money supply were fixed, the prices of everything going up would signal an unhealthy economy, not a healthy one. With a fixed money supply, in the short term, whenever the supply/demand situation changes (and it is always changing), some prices will go up and some will go down. In the long term, the general price level would be expected to go down as average productivity improves. If the general price level is going up, it means average productivity is getting worse, which, as noted, is a sign of an unhealthy economy.
The main purpose of printing money is to allow governments to obfuscate the fact that they are making the economy worse by masking what would otherwise be obvious price signals showing it. Every ordinary person understands that if the prices of everything are going up, that's bad. So governments, politically, cannot allow sustained increases in the general price level, unless they are so small as to not be noticeable except over many years. But they can't micromanage their way to a healthy economy either, so their only choice is to print money to disguise what is going on.
> the obvious answer to solving unemployment is a job guarantee funded through "printing" money
This would be government micromanagement on an even more massive scale and would be a disaster.
The obvious answer to solving unemployment is to make it easier for people to start businesses, since that is what creates new jobs. The way to do that is for the government to stop micromanaging the economy and let individual people figure things out.
Would not "high stakes" non-dilettante observers know about, and review trends in, the labor participation rate and other metrics?
These days I even see mainstream media outlets report lots of different numbers beyond the "baseline" unemployment rate, so I just feel like this whole article is written from the "you're not considering my preferred statistic as the 'true' one so you're wrong" angle.
I am asking because my country's equivalent tends to report unemployment figures, based upon a similar definition to the US, more prominently. This is especially true if a casual seeker is unfamiliar with the terminology used while reporting these figures.
Incidentally, it is also worth noting that one does not have to believe that the numbers are cooked up to believe that they are misleading. Having a consistent definition is important when comparing figures, unfortunately having a consistent definition also means that the reported numbers may not reflect societal expectations over time (e.g. regarding retirement or multiple income households).
...as opposed to what? being "honest" by slapping a "contains scary sounding chemicals" sticker on the front of the package? how can a manufacturer possibly know what people would hate, considering that people can hate literally any ingredient?
You don't even have to go to "scary chemicals" and conspiracy theories. Have you ever checked how many "0% fat" foods are heavy on refined carbs, and vice-versa?
> how can a manufacturer possibly know what people would hate, considering that people can hate literally any ingredient?
Have you ever heard about market research? The promoted cherry-picked facts are not there because people are unpredictable and the manufacturers are clueless, but because people are predictable and the manufacturers have researched their behaviour.
No, this is intentional deception. The party out of power talks about "real" inflation rates and "real" unemployment rates, and the party in power touts the official numbers.
The best number to go by for unemployment has always been the prime age employment (not unemployment) rate, and all honest discussions of the current state of employment start with it.
Did you mean 65? Only teachers and a few other public union members regularly retire at 55 in the US, and even for them many choose to continue working to earn a fatter pension.
Except, of course, for the rare people disciplined enough to be frugal and invested a lot of every pay check, and became self made multi millionaires.
https://fred.stlouisfed.org/series/TOTLL2564
Until I realized it's likely due to COVID-19 deaths.
But I am curious about that drop.
Edit: It would be interesting to compare this to an up-to-date graph of US deaths (all kinds), if one exists.
So it only includes people who are working or looking for work. This kind of distinction is the key to the OP.
So thankfully the dip is mostly not deaths, but for example
- a second earner in a household who lost a job in April but hasn't looked for new work since, due to child care commitments
- a cook who was furloughed but knows there are no new kitchen jobs going right now, but isn't yet willing to do something else, so isn't looking
- a person who lost a job one year out from retirement and is just retiring early
This article is one of MANY that recognize this, and it's by a journalist, and I've seen politicians note it as well....
Basically, there are no surprises here. Everyone uses the numbers that favor them and hurt their opponents. Everyone.
They looked at people that are structurally unemployed or stopped looking because they were disillusioned after some time; they also tried averaging a national rent gauge (yeah, regional would’ve been better - so that means approving them grant funding) to better understand the cost of living and who can afford to survive off their wage/salary. So they drew a line across the chart saying people below $X can’t even afford surviving in America right now. There’s some PBS specials on rural American single moms unable to feed their kids mid COVID - enter school lunch funding issues - and Twitter also has its share of people posting their anecdotes of plight.
Is that the case? A journalist covering an economic story will know and be familiar with U3 and U6. Maybe a local politician like a city council person, mayor, or potentially a freshman state rep in some American state might not know, since some of them are really just used car salesmen or local lawyers who've convinced their local party to put them in as their candidate but even then I suspect that they learn the conceptual if not the technical difference very quickly. I am not familiar with the political systems of all countries of course but I think you would struggle to find, say, a Dutch of British MP who would not know this.
Several of them do measure underemployment.
The government and media largely rely on U-3 (IIRC) when reporting unemployment. The upside is consistency - they all use the same number. The downside is this figure may not be fully representative of the economy.
I would argue that U-5 or U-6 better represent the state of the economy (as it relates to employment), as both included some set of under-employed and recently-given-up would-be workers.
But, we'd have to make a concerted effort to cut over to those numbers to avoid confusion.
Examples:
"How bad is our current recession compared to the great depression for the workforce?"
"How might raising the top marginal income tax bracket to 70% affect the labor market?"
"How does relaxing strict immigration policies contribute to job loss in a nation (if at all)?"
But, given an increasing income disparity between the top ~5% and bottom half, and a continuing sense of "being left behind" by many workers in labor-intensive industries, it seems doing a better job of describing those disenchanted workers (whether they be part-time at AutoZone, or recently given up looking, etc) would be beneficial to all.
For one of those disenchanted employees, seeing "Unemployment is at all-time lows! The DOW is at a record high!" on the evening news (while they're working 3 part-time jobs for $9/hour and zero benefits) isn't just unhelpful, it's insulting.
The measures are available, and they're usually in the vicinity of twice the regularly-reported (U-3) rate.
A lot of comments here are heavily biased towards accurately accounting for the retirement end of life, without considering the other end - people who are intentionally not working or are under-employed for some other reason. The one I had mainly in mind was highschool and college-aged students who are working part-time: they'd get included in under-employment, but aren't necessarily looking for a living wage yet because they have other priorities, so they don't get included in unemployment counts.
Also,
> I'd like to see unemployment measured more like total population minus those employed.
This measure would include children who can't even work part-time.
Done. Wasn't that hard.
Now let's not get carried away with dodging the issue, and get back to the topic of real deception, happily perpetuated, treated as gospel, by the powers that be, since time immemorial.
Depends on state and family status, but probably not. Someone making $28k/yr is paying pretty much FICA taxes and not much else federally speaking.
If they happen to have any dependents then they are probably paying negative tax rates via the EITC. Sometimes substantially so.
Source: I do taxes for a about a dozen folks "back home" growing up in a more economically disadvantaged area than average.
I'd prefer a measure of total working class income perhaps, maybe a ratio with cost of living. Then we'd know what all these jobs add up to exactly. Counting heads is hardly a 'true' rate of employment.
I really doubt this to be true. You would almost have to choose to live in a place with no opportunity to advance upward for this to be the case .
I think living on about this income is common for grad students, who mostly live in areas with "opportunity to advance upward".
I wouldn't wish living in SF on my worst enemy.
Weird how you assimilate living comfortably and having a car.
https://www.bls.gov/charts/employment-situation/civilian-lab...
You can see that starting 2013 and continuing on even under trump African American + Latinx labor force participation has made relative gains compared to White+Asian. I believe this is why some claim that Trump has been good for African Americans, though really the trend started under Obama. (And I'll concede who knows what really is the causal factor...)
https://www.bls.gov/charts/employment-situation/civilian-lab...
IMO Labor Participation Rate is also useful because it helps illustrate what percentage of the population is bearing the labor load of the society.
"The official unemployment rate is artificially depressed by excluding people who might be earning only a few dollars a week."
This reads like paranoia. Regardless of how U-3 originated, U-3 reflects an international standard of defining "unemployment". If different countries use different definitions of unemployment in their studies, then meaningfully comparing unemployment statistics among countries is futile (or just really really difficult).
I guess one could argue that, say, U-6 should be the international standard. But whatever definition one uses doesn't actually change anything in the real world. The different measures are trying to describe reality, not define the magical all-true unemployment rate. The point is to look at many different definitions to identify trends. Attempts to blindly point at U-6 and say that this is more "real" than U-3 is just as deceptive as claiming success over lowering the U-3 rate (even if it's because people are leaving the labor force).
It should be up to outlets like Axios to explain these nuances rather than argue that one measure is more "true" than another.
> A person who is looking for a full-time job that pays a living wage — but who can't find one — is unemployed. If you accept that definition, the true unemployment rate in the U.S. is a stunning 26.1%
I admit the word "true" in the title is kind of misleading, but the article itself isn't.
"living wage" here adds a layer of confusion. Some argue "living wage" is at least $15 an hour, some argue even more. Certainly living in San Francisco on $15 an hour wage, even working fulltime, would be a challenge. However, this has nothing to do with "unemployment" as it is commonly understood. This is just confusing separate economic and societal problems to arrive at flashy number that actually doesn't mean much, as it is a result of different people having different economic and personal challenges.
Data: Ludwig Institute for Shared Economic Prosperity; Chart: Axios Visuals
> What is the “True Rate of Unemployment”? The True Rate of Unemployment, as defined by the Ludwig Institute for Shared Economic Prosperity (LISEP), measures the percentage of the U.S. labor force that is functionally unemployed.
> Using data compiled by the federal government’s Bureau of Labor Statistics, the True Rate of Unemployment tracks the percentage of the U.S. labor force that does not have a full-time job (35+ hours a week) but wants one, has no job, or does not earn a living wage, conservatively pegged at $20,000 annually before taxes.
> Just as an accurate census is a prerequisite to funding American communities equitably, policymakers depend on economic indicators to shape economic policy. LISEP developed the True Rate of Unemployment to provide analysts and decision-makers with a more accurate measure of Americans’ financial well-being.
> For a more in-depth explanation of the True Rate of Unemployment, please reference this white paper[2].
[2] https://assets.website-files.com/5f67c16a6ca3251ecc11eca7/5f...
But why? Just an arbitrary number? What that number means? Defining "functionally unemployed" as "earning less than an arbitrary number we pulled out of our noses" is hugely misleading. Maybe that person can't earn more because they don't have skills, or have personal issues that prevent them from being more productive, or maybe earning high wage is not their priority right now (e.g. internship or apprenticeship). Unemployment has specific meaning - e.g. that by creating more employment opportunities you could fix it. Stuffing anybody that is not earning over $20K, for any reason whatsoever, under the term, just confuses the matters.
I get that it looks flashy - "the government is lying to you, the Real Truth is only available from us!" - but it's not useful to just change definitions of established terms because it sounds good in a soundbite. There are many other terms - like "labor participation", "underemployment", "economical hardship", "working poor", etc. - one could coin many more. Redefining existing one while slapping the misleading label "true" to it is not helping.
Which underlines my point - poverty is not the same as unemployment. For starters, not all people live in three-persons households, especially ones that earn low wages (e.g. single young people just starting their professional careers). Secondly, defining every poor person as "unemployed" is making the term meaningless - just say "poor" then.
> Because your comment is full of generalizations and cynicism
I raised very specific issues with this methodology, and with the terminology specifically, but if all you can do is dismiss them as "cynicism" (do you even know what it means? it doesn't match any part of my objections) then fine, whatever.
I am objecting to the use of an established term to mean something this term is not supposed to mean. There's nothing "cynical" about it.
That when a politician brags about unemployment being so low to a voter, they're doing so to fool the voter, who likely associate unemployment rate as a measure of how well off everyone is doing, while in reality it doesn't, because if you look at the "true" unemployment, i.e., what that voter is thinking, which is how poor are Americans overall, well you'd actually see a pretty glooming picture with a large number of Americans living below poverty and the number growing year over year.
> if you look at the "true" unemployment, i.e., what that voter is thinking, which is how poor are Americans overall
Unemployment is not a measure how poor people are. While unemployment can lead to poverty, it's not the same as poverty. It's like saying "we'll add a number of sick people, obese people, people not working out, old people, people eating too much sugar, people not eating enough vegetables, people who smoke and people who drink alcohol - and call it 'true health index' and will demand to treat this number as if all these people were actually sick". Somehow you think it's more clear this way?
> well you'd actually see a pretty glooming picture with a large number of Americans living below poverty
There already are statistical measures of poverty. You don't need to call them "true unemployment". Call them "measures of poverty".
So no, it is not "the one true unemployment rate" but it is a lot truer as perceived by the average person than the standard definition.
So, if anything, I'd say it's low-balling the number.
"True Unemployment Rate" implies "I don't think our standard measure of employment accurately captures the state of the economy" which then implies "I'm going to provide my own metric, and explain why it's different and why I think it's better."
I don't think that trying to come up with an improved metric which highlights the real situation on the ground is 'deceptive'.
https://www.bls.gov/charts/employment-situation/civilian-lab...
The article crafts a nice shocking headline, but the substance is disappointing. The BLS measures unemployment many different ways (U1-U6)[1] plus the civilian labor force participation rate, so the official data also shows these higher unemployment rates as U6, and has tracked them over time. Of course politicians and the media like to pick apart that data and focus on whichever part of it best supports the narrative they intend to tell. But the data is all there for all of us to see and interpret for ourselves.
I personally know a significant number (at least 10-15) that exclusively live from government handouts (this is beyond simple social security). They have little incentive to try and find a job, frankly and many actively live with food stamps, housing subsidies, free healthcare, and just kinda bum around.
I will be very honest: this is a very unsubstantiated claim, even if you know personally 10-15 people who are just bumming around and living on benefits that is a very small portion of benefits claim in society and this kind of behaviour will always exist. Benefits fraud is a thing, the good that benefits and welfare does to a society are much larger than the impact of fraud.
Do you really believe that someone who lives with handouts from the government have very little incentive to get better? Do you believe that this almost less-than-baseline level of living is enough to make a significant portion of the populace unwilling to work? To the level where participation rate would become unfair? Have you ever lived on that lifestyle to check your assumption that they have "very little incentive to try and find a job"?
I don’t think people realize how good “baseline” really is, compared to even 2-3 decades ago. Just as an example, most people can get free housing from the state provided some paperwork (again I helped quite a few people, including family members, with this.).
I actually stopped volunteering in this space, BECAUSE I saw it being taken advantage of. Probably 75% of the people I assisted were capable of working physically. Now, mental faculties are a bit of a different issue, only probably 50% had the mental disposition to work a regular job.
That being said most people can contribute something in exchange for wages. Unfortunately, many don’t because it’ll either cut their incentives there’s a valley between maintaining life quality off the state and the minimum wage. You have to make significantly more than minimum wage to have the same quality of life in some cases. You can even see stories of this with the pandemic (people making more on unemployment, so they don’t work).
I’m also not arguing if it’s a good thing or a bad thing. Just that, at least from my experience, it appears to be a thing. I also don’t think we are collecting good data on this, particularly for political reasons (or incompetence). If we had the real stats I’m sure people who need these programs would also be left without them (because programs would be cut). I really don’t know a good solution. Just that it really should be explored, because many people have an inaccurate understanding (again from my experience).
If you make sure the benefits are below what the market more or less defines as minimum wage, then people on benefits are going to have a dreadful time.
If you try to smooth the benefits loss, then you mostly end up subsidising employers. (I can reduce wages because the state will pick up the difference.)
If you increase the minimum wage, then you increase the numbers of people who "can contribute something" but not enough to make sense economically speaking.
To back this up, Florida implemented drug testing for some welfare [1] and the cost of the testing _far_ outweighed the money lost via fraud. It may be hard to believe for some, but there are a staggering amount of needy families that wouldn't be able to survive without assistance. I concur with the article about living wage being an issue, but that number is very region-specific.
1 - https://www.tampabay.com/news/courts/florida-didnt-save-mone...
More than half our federal budget goes to aid programs, from social security, medicare and medicaid, to thousands of assistance programs. States then add to this total. People routinely complain that the government does not do enough to aid the poor but what they fail to understand just how much is already spent and that a good portion is misdirected; too much ends up as jobs programs for friends and family of politicians.
I knew a lady (she died of old age 15 years ago) who was able to work 20 hours a week - not quite enough to live on - but when she went over 25 hours a week had a mental breakdown and spent 6 months in the mental hospital. It took many repeats of the cycle before it was even realized that 20 hours was her limit, but those responsible for her case didn't have options to help her because she could partially support herself normally and appeared able to do more.
The above is but one case - probably unique to just her, but I know of many other unique cases each with a different situation. The point is we cannot treat the poor alike. However not being able to treat them alike means there will be fraud anytime someone figures out how to work the system.
>this is a very unsubstantiated claim, even if you know personally 10-15 people who are just bumming around and living on benefits that is a very small portion of benefits claim in society and this kind of behaviour will always exist.
I know a little under ten people who do the same. Nobody so far in this thread is claiming they aren't a small portion of benefits claims. Nobody is claiming they won't always exist in some number. You're the first person so far to even use the word "fraud" here. Nobody is even saying they should be cut off. People are only saying that they don't fit cleanly into the existing unemployment metrics.
>Do you really believe that someone who lives with handouts from the government have very little incentive to get better?
What good is the incentive if you don't really have the life skills to work towards that end. It's the same kind of incentive that a plumber has to start the next Google and retire as a multimillionaire. Sure it would be nice but all of these people I know are not in a practical position to improve their situation through work.
>Do you believe that this almost less-than-baseline level of living is enough to make a significant portion of the populace unwilling to work? To the level where participation rate would become unfair? Have you ever lived on that lifestyle to check your assumption that they have "very little incentive to try and find a job"?
Unwilling is a strong word. It's not so much an unwillingness in that their existence is stable and they're not gonna rock that boat too much let alone run the rat race just to get inches ahead. These people, in my observation tend to do under the table work or deal drugs to increase their income since those paths are readily available whereas entry points into a career are far more foreign to them. (And before anyone projects their own biases on me, I consider small time drug dealers to be legitimate businesses and I don't think there's anything unethical about an under the table wage laborer job.) It's foolish to expect these people to get McJobs in light of their options and how their benefits tend to interact with income and how little that would improve their situation. The money goes right back out anyway. The value proposition of constantly working harder just isn't there.
These people's incentive to work a job is a lot like a middle age upper middle class white collar professional with a family and a mortgage's incentive to start their own business. Sure you can do it and you might make substantially more money doing it but it's a hell of a lot of work compared to what you're doing now and it comes with risk and since you're stable in your current situation you're probably gonna stay there.
I'm not sure whether there's enough of these people to be an issue for unemployment numbers but there's definitely a lot of them out there (which is regrettable).
Yes, I've lived and clawed my way out of that lifestyle. And yes, I absolutely feel most have very little incentive to do so.
I am told these days welfare benefits fraud is something at some tiny fraction of less than 1%, but my experience and those of my friends who have grown up similarly really shows a vastly stark difference between lived experience and statistics.
If you'd have asked me growing up I would have told you benefits fraud was rampant and the norm. Now I'm not so sure, but I am absolutely certain the definition of fraud has changed. Fraud to me and many others is "someone who could otherwise get a job but puts no effort into doing so or improving themselves towards being a self sufficient person" - where to others it seems more outright fraud in a white collar sense like claiming too many dependents.
It's a difficult topic for me because the "science" so jarringly conflicts with my lived experience.
Like the sibling commenter, I find your post very suspect, mainly because (in the US at least) if you are a non-disabled person without children between the ages of 20 and 55 it is extremely difficult, if not impossible, to get enough gov't benefits to survive (at least outside of covid-times)
The reality is that neither of us have solid stats because, in my opinion, politically no one wants to investigate how often the system is taken advantage of. Frankly, it’s hard to determine “can someone work” is a nearly impossible question to answer. Instead it’s, “how much money do you make a year” for many of these programs
The Axios article is highlighting the problem, but is going about it in the wrong way by conflating terms and not offering any further insight into the issue. If they mentioned the participation rate or the types of measurement that you noted, it would be a much stronger piece. But I want to underline your point that the data is available and anyone curious should look at it to see the trends for themselves.
The idea of a national living wage is ridiculous, given the vast disparities in the cost of living.
If you move to San Francisco, you should know that your money isn't going to go as far; conversely if you move to Tulsa you should reasonably be able to take advantage of the low cost of living to build up your savings. If you're residing in Tulsa and still only just surviving, you're not earning a living wage.
Then there's the fact that besides food and rent pretty much everything we buy nowadays is nationally priced - amazon doesn't give you a discount for moving to a low cost of living area; and you don't get to pay lower taxes because cost of living is higher.
But beyond all this, the disparities arise almost exclusively because of a few outliers - maybe 5% of people in the country can live comfortably on less than $20k/yr and less than 10% require substantially more; the vast majority of Americans are close to the average.
Because we don't want to set a baseline unemployment statistic which counts people as unemployed when they are earning enough to live in a decent apartment, while the same wage would leave them homeless in a city. By setting higher minimum wages, we effectively raise the cost of living everywhere, as the price for the slow changing supply of housing rises. As the cost of living rises, the comparative advantage of goods produced in the USA is further reduced in comparison to countries with lower costs of living. This results in less manufacturing occurring in the country, and eventually more real unemployment.
What we should be doing is allow for the creation of more low cost of living areas, where what is globally a decent salary is sufficient.
The truth is not a number, but a fabric of information. There have been frequent articles describing the large number of layoffs due to the pandemic, and a number of articles reporting that a substantial number of Americans cannot afford an unexpected bill of $300.
If you are one of the fortunate people who make a living wage as defined in the Axios article you might well consider what it means if in fact half or more of the people around you do not.
This article admits that the true number has been relatively much higher for nearly the entire history that unemployment has been measured by the federal government.
Instead the USG deliberately chooses not to, because they don't want the issue of unemployment explored. Congress could mandate that unemployment metrics be gathered in dozens of different ways, with dozens of different definitions for what it means to be unemployed. But they don't. This is the point, and really the only point that matters.
https://www.bls.gov/news.release/empsit.t15.htm
I would argue the number they report to press is the wrong one (U-3 vs U-5 or U-6), but a single figure is used for consistency and ease of consumption.
That reporting is wrong.
https://www.bloomberg.com/opinion/articles/2019-06-04/the-40...
If you think about what employment means in the context of labor and wage earning, until the early 1900s, most in America would now be counted as unemployed, since they were rather "employed" in agriculture and domestic work, neither of which would be counted as a living wage today. In addition, most women, a large part of today's workforce, did not actively participate in the labor pool (looking for full-time employment as the BLS cites for employment), however that drastically changed in the 1960s and onwards.
As such, the current definition of employment is rooted in the realities of where employment was in the early 1900s. Today's definition might not jive with what the Axios article is stating, but what the Axios article is stating is not really about Employment, but rather about Income generation.
The notion of generating income must be separated from the idea of full-time employment. In the gig economy, side hustle world, most gig workers would not be counted in the employment rolls. As such, do the employment numbers matter and do we need something distinct to measure what Axios is stating here, which has more to do with income earning than full time employment?
The other measure should be "% of working age Households where household income is not at or above average living wage adjusted by region". Then that is a measure of income and poverty and not a measure of "who has a full time job"
Graphs are a bit old:
http://guerby.org/blog/index.php/2010/01/31/211-larry-summer...
Over 16 years old, a lot of people are at school / university and likely "funded" by their parents. And those who work in order to study because their parents can't/don't help them, they don't obviously pretend to earn more than 20K... they work simply to survive while they study but when they are graduated, it's another story... Is it all counted as "unemployed"?
For all practical purposes, all university students should always show up as "unemployed" in any statistics, because they are -- and they'll need to earn all of that cash back and then some extra, at some point in their lifetime.
In some countries. In others (such as Australia), students take out an interest-free loan from the government, and are expected to pay it back, with or without the help of their parents.
Cursory research [0] says
>Today, roughly 70% of American students end up taking out loans to go to college. The average graduate leaves school with around $30,000 in debt and all told, some 45 million Americans owe $1.6 trillion in student loans — and counting.
[0] https://www.marketplace.org/2019/09/30/70-of-college-student...
The reason you don't include full time students is the same for children and retired people. They are on their way to becoming productive citizens or have done their part for society.
I'd suggest a useful definition of "unemployed" for the purpose of evaluating if there's a problem is: "needs a job but can't get one".
That covers retired-but-not-really people, and students who need to work for a living at the same time but are between jobs. But not children, or students with enough to live on from their parents.
I expect there's value in the statistic of everyone who lacks a full time job (unemployment in the sense you mention), but a student who has reasonable prospects of employment in X years, post graduation, is significantly different than someone failing to find an adequate job right now.
That’s funny because I worked the entirety of my time as an undergrad, as did many of my peers.
I meant we should never exclude young adults from unemployment metrics. If they aren't employed at a living wage, they aren't employed, being a student should not "bypass" that metric in any way.
That's true only for kids of upper middle class families, and thus a vanishing component for a whole-workforce number like this. Kids of families whose parents bring home something close to the median household income ($70k or so) are not being "funded" at school in any meaningful way, certainly not at a number comparable to employment.
No measure tells you everything, and measures that try obfuscate everything. Is it useful to know what portion of the population is working, what percentage of 16-22 yos are working?
An increase in employment rate among women might mean more good jobs are available. It might mean that times are tough and women (or men) with small children need to work more. It might mean people can't afford to retire, or that 60+ people are having trouble finding a job, etc.
IMO the problem is an obsession with creating a measure that maps perfectly to an imprecise term. "Unemployment," in the abstract, is not a perfectly defined thing. The measure should not define the thing. Measures should be used to understand the thing.
Counting a student who has reasonable expectations of living wage employment, post graduation, distorts that measure.
Well are they employed by anyone? No. So they're unemployed. It's perfectly valid to be unemployed while studying... but you're still unemployed.
I think it’s misleading to classify these people as unemployed, since many of them choose to not work. If they wouldn’t have had a job anyways, it skews the statistic.
If I had enough money in the bank to live the rest of my life comfortably, there's no way I'd be employed.
This is especially important to note given that unemployment skews towards younger people.
A college student may be considered unemployed if it is actively looking for a job, but does not have one. Similarly, it may be considered employed if it does have a job.
Maybe that was true at some point in history, but it is not today. Most minimum wages across the US are not a living wage. Many necessary benefits are tied to full time employment only. Unemployment rates with no context attached don't have such a strong meaning.
There are examples in this thread, where the poster personally knows people who do not wish to work and are somehow living the high life off of their taxes. The implication is that it's worth eliminating the program in order to avoid that; the abstraction of other deserving people who need it is less important. They wouldn't necessarily mind a system that managed to remove all of the malingerers, but even a very tiny number of them invalidates a system.
As you say, we can easily afford it: the country produces over $60,000 per person each year. It's more a matter of fairness than resources: people resent a system they perceive as unfair to them even more than they resent a system in which unfortunate people suffer.
That's certainly not unique to Americans, but from what I've seen, it dominates the thinking here more than in many other parts of the world. When you describe, say the UK's NHS or a UBI, the American mind seems to go first to "How many people must be abusing that system?"
And I don’t think it’s unique to capitalism. Even in the Soviet Union they had “social parasites” who refused to contribute to society. Same with communal societies without a monetary system. People who can contribute but choose not to are pretty quickly pushed out.
And I see a lot of comments on HN about paying taxes as the cost of enjoying the benefits of society. Even if you ignore the unfairness of one laborer paying for another laborer to be idle (even though they can work), isn’t it unfair to society for someone to not contribute to the system they benefit so greatly from?
And I’m not even an American.
0 - https://www.epi.org/publication/ceo-compensation-2018/
1 - https://money.cnn.com/2013/03/04/news/economy/buffett-secret...
That's not a conversation and it certainly isn't an interesting conversation. It's what reddit or twitter are optimizing for.
"Pushed out" meaning what exactly? Shamed? Debtors' prison? Homeless? No medical care? Left to starve? Euthanized? Plenty of options, none befitting a decent society.
Also, fairness (which literally everyone supports) depends greatly on framing:
1. Alice pays taxes, Bob doesn't, Bob gets free stuff from the government, so Alice is paying for Bob's selfish laziness.
2. Alice and Bob both pay 30% of their income in taxes. The government guarantees all its citizens a decent standard of living, and so gives Bob, who falls below some threshold, assistance.
3. Alice is physically and mentally healthy, so she compounds her advantages and resources. A portion of her financial gains go to the government as taxes. Bob isn't so lucky, struggles with physical or mental illness, experiences personal or family tragedies, etc. He struggles to stay financially afloat, and can't consistently accumulate a safety net to weather multiple bad outcomes. He turns to the government for help sometimes.
It comes down to whether you'd rather punish the guilty and innocent alike or would rather help the downtrodden and seemingly slothful alike. I choose to be kind, but I get that it's hard to act that way if you feel threatened.
OP claimed it was some uniquely American belief. I haven't seen any evidence to support that.
Every penny taken out of my income to support someone else is a penny I can't apply to my own dreams. My dreams are (in no order - in fact the order changes day to day): retire early, buy more toys, pay for my kids' education, take more exotic vacations. I have enough to live on, and even by US standards I'm doing very well, but there is always more, and the money going to someone else is money I work for that I can't enjoy.
I suggest directing your callousness towards our employers, who are keeping our wages down [0], as they are milking the system far more. It also doesn't help that a conservative court consistently rules against us [1], but there's little we can do about that now.
0 - https://www.forbes.com/sites/joshbersin/2018/10/31/why-arent...
1 - https://scholarship.law.georgetown.edu/cgi/viewcontent.cgi?a...
Imagine being a daddy or a mommy with no way to earn enough this month to bring up your kids halfway to what you were taught is decent.
I'm living well below the poverty line here in Norway, but it is nothing compared to being poor in America. I do not need to worry about health care or expensive insurance. Me and my partner own an old but nice house with a big garden in a semi-rural community (15min from the nearest city), and can afford all the basic necessities by being frugal. In America, we would have lived in constant fear of becoming ill, seeing a doctor or going to the hospital. The idea that you have no real safety net to help you in tough times is terrifying. I can only begin to imagine the stress that goes with it.
I have great sympathy for regular people who are struggling, that voted for Trump. They have long been ignored, neglected and forgotten, and I am sure many voted for him either in desperation or to defy the system they rightly feel have left them behind. People in Norway couldn't imagine how the American people could vote for such an obvious clown and a demagogue, but we have not seen the extent of the suffering and hardship before recently. We see the Hollywood version of your culture for the most part, and are shocked when we find out that American women actually have to pay the hospital when giving birth ("wtf, it isn't covered by paying taxes?").
I really hope that it gets better, but am afraid it has to get worse first.
[0]: https://tv.nrk.no/serie/uxa-thomas-seltzers-amerika (Norwegian language, but many segments are in English)
How many great companies died in the womb because someone just couldn't risk losing their health insurance.
OTOH, it may be wrong (eg) over very long periods. If underlying behavioural changes happen (eg employment seeking behaviour, drifting of underemployment/unemployment ratios) it may miss long term trends.
The problems start (almost immediately) when when the measure becomes the definition. Measures are tightly defined, objective and legible. That's attractive. So, we start to define (eg) unemployment as "that which IQ tests measure." This is totally off track, if the measures weaknesses are (they usually are) justified by arguing the measure is just for trend detection. Definition and trend detection are different purposes.
In any case, the only way to get a less superficial understanding to define the measure in terms of what it actually measures, not what it's trying to measure. "people trying to find work" is an actually useful thing to pay attention to. It just isn't "unemployment" in the widest sense of the term.
Personally, I hate the "index/metric" solution. This is chasing the rabbit down a hole. We can't have a measure that perfectly maps to unemployment (or financial wellbeing, or whatever). Efforts to do so end up measuring something even more abstract and difficult to understand.
The alternative is to just use these measures as incomplete. We can look at "job seeker" rates, nonemployment rates, etc. No measure will tell us what's really happening. That's up to us human intellect to determine.
https://data.worldbank.org/indicator/SL.TLF.CACT.FM.NE.ZS
That doesn't falsify your specific claim, which is about a very small fraction of the population (six figure salaries put families into the top 3% or so), but it's reasonable evidence.
Broadly: you're taking a cultural point about upper middle class "America" and extending it to the whole society. Most people don't (can't) live like that.
That just means that contemporary woman is not seen as shirking her mom responsibilities when working. While the children are definitely seen as mothers primary responsibility, working is part of that. It also means that there is less expectation on women to be artificially nice or helpless and dependent compared to American stereotypes.
Unlike in America, woman working is not interpreted as woman being anti-family. Unlike in Germany, mom working is not interpreted as mom failing her kids.
Also, it is not like the first women stepped into Russian factory only after revolution. The women did worked prior that, obviously. Whether on rural farms in villages or in factories or as cleaners or selling stuff at marker etc. The aristocracy expected women to not work, but generally Russians have been poor and had to do stuff to survive.
I have never thought of having more women in the workforce as "anti-family", and will definitely research on that, but personally I am happy to have a more diverse workforce and not stigmatize men if they want to stay at home.
I dont think Eastern Europe is the place more accepting of men staying with children at home.
In lieu of their mothers, children need to be looked after by professional caretakers. This weakens their bond with the mother. And even in the evenings, when mother is back from the job, she's beat and can't give the same level of attention to their children.
Childcare price is issue too and sometimes pushes opposite way. Poor families in America sometimes have to stay at home, because childcare is expensive.
Staying at home is not just function of how much you earn, probably not even primary. There are also practical aspects of "is it expected of me", "is it possible to manage school, activities and work" and "do I want to stay at home".
You'd also really have to look at the breakdown by income level. Worldwide, female participation in the workforce is actually higher at higher income levels.
Uh, a lot of 17 year old's don't work during the school year. And they don't define "living wage" in this article - does that mean minimum wage for 17 year old's? Minimum wage for 18+? $15/hr? Something else?
This is basically "if you take this ridiculous metric that nobody uses, you can get to 55% unemployment! 59% for $MARGINALIZED_GROUP!!!1"
Yes, if you add at least underemployment by an arbitrary and probably contentious “living wage” standard to traditional unemployment, the number is bigger than you are used to hearing and sounds scarier. Of course, all the historical numbers you've heard are also using the traditional measure, so while the number sounds scarier, you'll also need to erase your memory and replace it with a different data series to have the right context, which will then probably make the current value of the new measure seem a lot less scary. Or not? While arguments for a different headline unemployment number than is currently employed often put a lot of emphasis on how much bigger the current measure would be using the proposed changes, they rarely out that current level in historical perspective.
> The official unemployment ... also excludes anybody who has stopped looking for work or is discouraged by a lack of jobs or by the demands of child care during the coronavirus crisis.
So does the definition you just presented, which excludes anyone who isn't looking for work, whatever the reason. Or are you now defining “looking for a full-time job that pays a living wage” to include people that aren’t, in fact, looking for a job of any kind? But it's the relative movement not the a absolute level that drives most policy responses, so aside from a bigger number, what different actionable insight does the proposal provide? The article doesn't even begin to make an argument that this number is more useful for any practical purpose, even if it was coherent, which the contradictions in the first couple paragraphs seems to indicate that it is not.
You speak of historic perspective; let’s try getting some numbers! A quick Internet has led me to https://www.macrotrends.net/1377/u6-unemployment-rate (I’m on my phone so it’s harder to get the original sources linked but I assume that’s just the BLS numbers either way).
They all track each other pretty well. A trend in one is a trend in all of them. If you want to expand your understanding then following the changes in something like labor force participation trends is probably more interesting than just switching among these U series.
https://www.bls.gov/charts/employment-situation/civilian-lab...
The fact that U-seried generally track together is a good thing, it says that they are indeed different measures related to the same underlying concept. It also makes the points where they do diverge interesting and noteworthy.
A large portion of high school students, stay-at-home spouses, college students, under-the-table workers, and the retired will likely fit into this category.
I was excited about this article but it just isn’t compelling.
Not so anymore.
A look at the chart in the article contradicts the "stunning" element: It seems that this measure has been in the mid-to-high 20%s for at least two decades. So, while this number might inform certain policy decisions, it doesn't appear to be far outside the norm.
> "Axios on HBO."
What does that even mean? this is literally out of Idiocracy. -brought to you by Carl's Junior
> author of Capital
First line under the headline contains a link to marketing material with a prominent sign-up link. gotta pump up those conversion numbers, i guess.
> rate rises even further, to 54.6%. For Black Americans, it's 59.2%
this is such a bullshit, zeitgeisty move. provides no useful info, is a non-sequitur solely for the purposes trying to ride the BLM wave. grab that emotional engagement.
> A person who is looking for a full-time job that pays a living wage — but who can't find one — is unemployed. If you accept that definition, the true unemployment rate in the U.S. is a stunning 26.1%
as others have said, the ability to not find any job and whether or not you are above the poverty line is a very different thing. muddling these two makes me strongly doubt the clarity of sight from the author and guarantees i wouldnt sign up for anything related to his opinions.
In all other cases, the individual must have been engaged in at least one active job search activity in the 4 weeks preceding the interview and be available for work (except for temporary illness) in order to be counted as unemployed.
Otherwise, you’re just idle.
That’s why we have various unemployment indexes such as U1, U3, U5 and U6.
Me think the author of article is conflating various terms.
https://www.thoughtco.com/statistical-measures-of-unemployme...
Half serious, half modest proposal: would it be useful for the BLS or OECD, or whoever, to periodically and unexpectedly change how unemployment is measured and calculated, in order to minimize the tendency observed in Goodheart's Law?
That seems like it will give you a really bad number because they are for sure unemployed but a lot of people in the age 16-20something will go to school.
I didn't earn a living wage until I was 22, but I also earn pretty well nowadays and pay a more taxes than most of my friends.
Seems like the author has come to a conclusion before writing the article. A pretty dishonest piece imo. Because if you include students, why not include children and retired people as well?
When you point out the very obvious flaws, it gets you downvoted as well because orange man bad. HN has become a sad place just like everywhere else.
BIS has 6 different measures for labor underutilization. The widest is U-6: "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"
U-6 is 12.8%
So what to make of this? That the unemployment figure doesn’t reflect the actual experience of job seeking in the USA...
We know this and there’s nothing in this article adding to our intuition.
No matter how you build a single number to represent a really complex problem (i.e. what is "living wage", what is "really wants one[job]"?) you'll get a bad answer.
This makes the current economic situation look better then the official Unemployment Rate. When looking at the official rate it goes from 3.6% to 7.9% When looking at the "True White Unemployment Rate" it goes from about 20% to 23.6%, that seems far less severe. Not to mention they don't break the Official Unemployment up by race(this is present in the official Unemployment Situation Report output by the BLS), so you can't do an accurate comparison. All indicators can be gamed, and no single indicator paints the entire picture, but most people can't spend a lot of time comparing different numbers, and this new indicators seem to be correlated, so what is the point? They aren't normalized seasonally, that makes it even more confusing. They haven't strayed too much as far as the graph goes back, so this is not a new issue. The data from this article is suspect, and it gives us no new information.
I have still more questions but here is more details on their methodology and details for things like self-employment. https://assets.website-files.com/5f67c16a6ca3251ecc11eca7/5f... Looks pretty grim and I can't say I disagree.
(As raised in the comments, it's good to use universal-ish standards so that countries are comparable.)
And I'm not classic "liberal" or "progressive" (I lean (proper, not movement) conservative). This is intended to portray a fairly balanced view of BLS stats...
If one takes the living wage as a measure of unemployment, it should also include place of residence IMO. I heard living wage in the bay area is > 100K USD.
I'm not advocating for anything and have no stake. But all these statistics are proxies for how citizens are doing. In general, hardships increase as unemployment goes up, whatever way you measure it. It's usually better to look at all of them jointly, and focus on differences instead of the absolute rates of a statistic.
Well stated.
We see the same issues with GDP; people claiming it doesn't capture a country's well-being. This is not surprising, since it's a measure of economic output. But we know there's a correlation between economic output and societal quality-of-life.
In general, more GDP > less GDP. If you find anomalies that raise interesting questions (ie Canada vs US) you can compare other measures.
I graduated right in middle of 2008 crisis and for various reasons never found a full time job (all my work was owning my own contracting companies or startups) so for example my government (Brazil) doesn't count me as unemployed and doesn't let me have some benefits. But many employers instead see my empty employment registry (in Brazil theoretically everyone has one) to interpret I never worked so they refuse to hire me in first place because I might lack experience.
Interviews don't go much better, for example Amazon interview all of the interviewers asked questions about conflict resolution in large teams I worked with in the past. I suspect the reason I was not hired was this question, since was the only one I couldn't answer at all.
If you learn in 2020 that there are a lot of working poor, you haven't been paying attention in the last 12 years.
Economic conspiracy stories tend to be somewhat less outrageous than those about vaccines or Bill Gates, so the same people who point and laugh at people who believe the later could easily believe stuff from shadowstats, conspiracies around the Private Ownership of the Federal Reserve, or the perpetual unemployment-is-actually-super-high.
The mundane Truth About Unemployment is that the current measures are relatively easy to measure in standard way without too much subjectivity (they just ask a bunch of people if they're available for work and looking for work, but couldn't find any). The official docs are pretty clear about what they measure, but they're pretty dry and don't make for good clickbait/blog/youtube stories https://www.bls.gov/opub/hom/cps/pdf/cps.pdf. There's no grand conspiracy to suppress the truth at the BLS, it's just a bunch of boring civil servant jobs.
But they actually measured "isn't paid a living wage" (by their definition), and just assumed "looking, but can't find one". That assumption is absolutely false - high school kids, college kids, independently wealthy, non-working spouses, and retired people. The article's methodology doesn't implement their definition. The conclusions are therefore worthless by their own standard.
Though I would argue against the adjustment for geography. It holds true when we're talking about day to day expense, like rent, but generally doesn't when we're talking about life expenses like healthcare. At least we need to be careful how we adjust for geography. If we consider someone is able to pay rent and eat, that seems not good enough, it should also adjust for: and they'd be able to afford cancer treatment and sending children to university as a minimum.
Notice the objective to the point layout, and link to the data source. My only quibble is axios did not link directly to the white paper explaining the methodology, but that link is prominent on the linked page. So, 2 clicks away from the explanation of the numbers. Much better than the vast majority of articles, whether MSM or blogger, that get thrown around as evidence for this or that.
As has been pointed out, the article title is rather click-baity. No information source is perfect...and it is all narrative.
Also this ignores the nuance provided by the different numbers like U1 through U6 but they’re mainly complaining about U3 and ignore the others exist at all.
I read the "whitepaper" on the LISEP website. They don't even bother comparing their custom measure to U6 which is the broadest rate internationally recognised and collected by the BLS. Literally, no mention. If your thesis is "current measures of unemployment" are not adequate and you want to convince people of that, you should really include what those measures actually are or you will look like a crank.
We already know the pandemic and the response have been disastrous for unemployment. If you aren’t in the top 1%, good luck.
"Furthermore, LISEP calculates the “True Rate of UnemploymentOut ofPopulation”, using the same statistical definition of True Rate of Employment, but instead taking this number from the entire working-age population (aged 16+) rather than the BLS-defined labor force."
So am I right that this includes retirees, college students, kids still in high school, stay-at-home parents, etc? Doesn't seem super useful.
Labour participation, Unemployment, underemployment, e& need to be considered at the same time.
low unemployment, but low labour participation? -> people have stopped bothering to look for a job not good. low unemployment, but high underemployment? -> people are desperate and looking for anything, not good either.
he maintains it by following pre-clinton era methodology so its relatively less gamed.
"Dependent Rate" may have been a good alternative?
The government has every incentive to manipulate the CPI: it even reduces their social security payouts.
[1] https://www.georgegammon.com/will-there-be-a-great-depressio...
My sense is merely that the metric is focused on “cost to survive” measures and does not reflect the changes in “cost to thrive.” Food, clothing, transportation, and technology are actually getting cheaper over time. But it’s hard to care when housing, education, and healthcare costs are skyrocketing.
Also, as a footnote, I was interested to read the article you linked, but I seriously distrust any information presented as a video under the headline “shocking answer revealed!”