This is phrased in a very deceptive way. There are lots of issues with the 'Unemployment' metric. It is indeed a deceptive metric. However, it is deliberately misleading to append 'True' to 'Unemployment Rate' with a custom definition intended to make an argument. You are stacking confusion on confusion instead of clarifying. If you want to create a different metric around a 'living wage,' then it should be defined in a way that makes that more clear.
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.
I agree that there is no "true" measure, just different measures.
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.
>They don't consider that most unemployed 58 year olds are not counted because they "retired," stopped seeking work or receive a disability benefit.
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?
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.
Collecting disability doesn’t necessarily mean you’re incapacitated or can’t work at all. Depression is a common disability, for example. It’s very common for veterans who served more than 4 years to get some amount of disability if they are persistent, and often not for crippling injuries (sleep apnea is a popular one)
Yes, it is truly scary. A large portion of them are in more rural areas that have been decimated. Also, IIRC states pay money to trainers/consultants that help people get on the national disability programs.
That number doesn't match what the SSA publishes in their annual reports.[1]. They put the figure on disability at 8.9 million disabled workers, with 11.2 million total beneficiaries once you include the disabled workers' children.)
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
No idea why this was downvoted into oblivion, so I vouched for it. It seems to state factual information and cites direct sources. The information presented is located on page 29. Maybe instead of just drive-by downvoting, you can state some reasoning for doing so.
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.
> reality is that "unemployment" is a highly visible metric.
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.
> Why should any of these people be considered "unemployed"?
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.
Well it's a spectrum. Many of those who are happily retired would be willing to go back to work if someone offered them enough money. As wages rise the labor force participation rate also goes up.
> As wages rise the labor force participation rate also goes up.
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.
Intuitively, printing money can't be the only cause at least at a non-macro level. 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. This demand-pull inflation against the goods and services we use to measure inflation would cause the measure of inflation to rise and everything that indexes against this measure would adjust.
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.
> Intuitively, printing money can't be the only cause
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.
I think we're talking past each other here. I don't disagree with you at all on a theoretical level. Yes you need more money chasing the same goods.
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.
> 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.
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.
> 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.
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.
> ...is changes in expectations about future needs or productivity.
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.
You can want a job, but not be looking for a job because your prior attempts to secure one have been unsuccessful. This is called discouraged unemployment and figures into the overall category of marginally-attached workers.
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
Yeah, but that information is captured under an different measure.
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.
>"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."
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.
Most people retire with an income stream that is enough to live one. Now I'll grant that enough to live on is low standard of living, but it will pay for food, health care (most get some form of medicare), your apartment, and you can afford a basic car. Of course if you live in a high cost of living area like San Francisco it isn't enough, but for most of the US you will live an nice enough life. You can always want more, but your needs are met.
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.
I think the bit you're missing is that there is a cohort of people who haven't retired, precisely because they lack an income stream that is enough to live on, but they are counted as retired by most measures of unemployment.
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.
How do you know he was counted as retired? BLS shares their survey and how they determine if someone is unemployed - they basically ask if they are available to work and actively seeking work. I didn’t see any cutoff for age.
I could definitely be wrong, but my understanding is that when unemployment benefits run out, so does one's status as unemployed, since they've lost the point of contact that enables them to ask those questions.
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.
Number of unemployment insurance claims is sometimes cited as an economic indicator, but it's definitely not the main measure of unemployment.
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.
Check out the link in my reply above, it's pretty interesting. It lays out exactly how they collect the unemployment statistics and calls out that they can't use unemployment insurance numbers for the exact reason you said - benefits run out, but people are still looking for work.
They basically survey 60,000 people and ask a specific set of questions to figure out which "bucket" people are in.
U-3 does not exclude those whose benefits have run out but are still actively looking for work. It relies on social insurance claims in part, but also uses surveys to estimate how many folks are looking for work that aren’t receiving unemployment.
>> Why should any of these people be considered "unemployed"?
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.
> "Why should any of these people be considered 'unemployed'?"
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).
> if you want to know how well we're allocating our (labor) resources as an economy
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.
>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.
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.
> right now they are "macromanaging" it away from a system that could possibly work
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.
that "we" is the whole of the citizens and residents of the country, not a central planning committee. the government is the power apparatus that is meant to express and realize our common good. as a power apparatus, it cuts both ways, and we must remain vigilant as citizens on keeping it aligned with our goals and desires.
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.
> that "we" is the whole of the citizens and residents of the country, not a central planning committee
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.
Yup, the occasional hedonistic adjustments and product substitutions that they do for CPI is already prime fodder for perpetual inflation conspiracy stories. It will be a disaster when they do even more subjective "degrees-of-unemployment weights".
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.
But the article's graph shows exactly the opposite. According to the "true unemployment rate", the job market has fully recovered from the COVID shock and is sitting at where it was in 2017-18, whereas the official unemployment rate indicates that there's still a problem. I assume we can agree that there is indeed still a problem, so it seems like the official statistics have it right here.
While this may be true, the article's premise that the BLS was somehow cooked up to hide the "true" unemployment rate rings hollow, mainly because the BLS also tracks and reports tons of other labor-related statistics, including for example "discouraged" workers, those working part-time but want to work full-time, overall labor force participation rate, etc.
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.
Question: which figures are reported more prominently by the BLS?
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).
BLS calls U-3 the "official unemployment rate" I guess, but they publish it in a table with 5 other measures that count different things. I'm not entirely sure it's fair to blame them for the fact that most people just focus on that one measurement.
The fault is with the US newsmedia, which very consistently always talks ONLY about the U-3 number, and in my years, has never acknowledged that their are other numbers worth discussing.
The BLS statistics are pretty much like the food labels: They'll slap a huge "0% fat" sticker on the front of the package to appease the public conscience. But you need to carefully read the fine-print on the back to find out what's that you're consuming.
>They'll slap a huge "0% fat" sticker on the front of the package to appease the public conscience. But you need to carefully read the fine-print on the back to find out what's that you're consuming.
...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?
> being "honest" by slapping a "contains scary sounding chemicals" sticker
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.
> People (including journalists, politicians... high stakes stuff) assume that unemployment captures most unemployment.
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.
What's the source of the general increase from 1960 to 2000? The trend away from couples having one member stay at home running the house toward having both members with outside employment?
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.
That dip is more than 4M people, so I think it's still unexplained. Perhaps due to a shift in response rates or another artifact of COVID churn in the survey methodology?
Yeah. I remember back in 2016, all the self-proclaimed fact checkers insisted that the official headline unemployment rate was the real unemployment rate, and that any claims about employment that didn't match up with it were lies by Trump. Now that he's the incumbent...
> 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
Would not "high stakes" non-dilettante observers know about, and review trends in, the labor participation rate and other metrics?
The “true” is a little sensationalist though I doubt they were expecting anyone to care about their investigations. They were still going for “a more true”. They’re not accounting for retired 65+ year olds. That’s a little suggestive of just wanting to quickly look away.
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.
>People (including journalists, politicians... high stakes stuff) assume that unemployment captures most unemployment.
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.
There's labor force participation and it is measured. It's just much more complex and can not really be understood as a single number - people can be out of workforce because they are retired, because they are sick, because they are wealthy, because they can't find work, because they are in prison, because they rely on somebody else to supply their income, etc. etc. Probably too complex for an average newspaper headline.
The statistic they are describing as the “True Rate of Unemployment” isn’t that. It’s the rate of which society is earning a poverty level wage or less. It’s a useful statistic and one that deserves discussion but it’s not the “True Rate of Unemployment”. They are just different.
I completely agree, and reports on unemployment rates are one of my biggest Internet peeves:
"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.
> A person who is looking for a full-time job that pays a living wage — but who can't find one — is unemployed
"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.
It's not that deep, or confusing. If you look at the unemployment chart, it has a caption.
Data: Ludwig Institute for Shared Economic Prosperity; Chart: Axios Visuals
The source for that data is a hyperlink to [1], which defines the living wage at $20,000 per year before taxes.
> 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].
> which defines the living wage at $20,000 per year before taxes.
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.
Did you read the second link I posted? Because that's spelled out on page 2 in the Methodology section. More generally, are you here for curious conversation? Because your comment is full of generalizations and cynicism rather and does not address anything I, or the linked study, said.
$20,000 was chosen because LISEP concluded that anything beneath that wage could fairly be considered a poverty wage, based on the U.S. poverty guidelines put out by the Department of Health and Human Services, which considers a three-person household to be in poverty if it has an income of less than $20,000 per year.
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.
I think you just explained the point of the article to yourself.
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.
Unemployment is not the only economic measure. Basically what you're advocating is fighting misleading claims by politicians by creating your own, even more misleading (at least the politicians talk about unemployment when they say "unemployment") metrics which makes even harder for the voter to understand what is going on because it mixes a half-dozen of different societal problems into one number.
> 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".
Retirement comes with medicare in the US, so there is somewhat reasonable health insurance.
> 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.
More than the vast majority of the world lives on, including many in first world countries. And this is pre govt transfers, which usually amount to quite a bit more in benefits.
Completely disagree. Yes there is some level of subjectivity here but the definition this article is using is muchcloser to the definition to what an uninformed person would assume whereas the traditional definition is intentionally deceptive.
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.
Yes, I completely agree with you.
The top comment, like many top comments on HN, fails to understand the bigger picture/message, and instead nitpicks one thing thus making everything "false". It's a really, really said phenomena amongst this hyper logical crowd.
People really get hung up on the name and I can't blame them. Calling it the "Employment Index" would be a better fit. It's only ever meant as an indicator and not to be a pat answer to very complex question.
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...)
Throws the ordinary unemployment rate into the category of 'false', which I agree with. To class 'any job' as employment is unhelpful and greatly misleading.
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 generally agree with you, but in this particular case, they defined "living wage" very conservatively as $20,000/year [1], which is $1667/month or $9.62/hr assuming a 40-hour week.
So, if anything, I'd say it's low-balling the number.
I thought the title was okay—I got exactly what I expected.
"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 think the problem that Unemployment has been a Key Performance Indicator for government that has now been completely gamed by the government to the point of being useless as an indicator.
I don't think that trying to come up with an improved metric which highlights the real situation on the ground is 'deceptive'.
Different Unemployment Rates are defined and calculated differently because they are different. Simply listing a number called the unemployment rate is in itself disingenuous as the context of what type of rate is important. But it's easy for an article to list a number that fits their narrative and not explain what the number means. The context matters, per usual.
I agree this is a weird way to measure it but I think we don't measure it correctly. We don't measure underemployment, meaning people who used to work full time but have stopped even looking for work (*and are not retired). I'd like to see unemployment measured more like total population minus those employed.
They do have a measure that also reflects underemployment. The broadest measure is called 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." That also include the U-5, "discouraged workers, a subset of the marginally attached, have given a job-market related reason for not currently looking for work."
The measures are available, and they're usually in the vicinity of twice the regularly-reported (U-3) rate.
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.
U-3 will still be useful for answering many questions even if it becomes a lesser-used stat among politicians, because it's been tracked for much longer and because it's tracked by almost every nation. You're not going to magically squeeze U-6 numbers out of Ireland in 1952.
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.
(I've scrolled 1/3rd down the page and am picking you at semi-random for this comment, so this isn't just a criticism of your framing, but of plenty I've seen so far)
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.
Fair enough. I should have been more specific. My intent is that it is people of working age. This needs to also account for status of school and retirement. However, we should be able to get trivial numbers for these from SS and college reporting to get an fairly accurate number.
Right - the second that they included 16-17 year olds in this, I started to pay less attention. I do want to go back to this and look further to see if I can glean out that demographic as well.
I can't assume where you are from but, as a non-American who lived in distinct parts of the US, I can tell you a bit about why a car is essential for living to many Americans.
Firstly, the US is different from many parts of the world. Not only it's massive, but swaths of American urbanization are shaped around cars as a basic necessity, especially with the adoption of suburbs. Most of the US outside of big cities are car-first towns both in infrastructure, planning, and services.
In turn, having a car for many Americans is more than an efficient way to get around, it is the only way to move safely and reliably.
Many parts of the US have no public transportation, no reliable ride-sharing, no safe way to bike (both the roads and the culture are hostile towards cyclists).
Europe has a population density twice that of the 48 lower US states. In addition, roughly a third of all people in the US live in a mere 500 cities (if you account for metro areas, that number increases). Even if those cities had great public transit, it would leave the remaining areas far less populated in reality. Less than 30 people per square mile is very common outside cities with a lot of midwest states having something like 5-7 people per square mile (or less).
It may be hard for people in many places to grasp, but even in eastern states there are many, many areas where you could pick a direction and walk many miles without seeing anyone.
Below a certain population density (likely in the hundreds to low thousands per square mile), public transportation simply is not feasible.
I don't think it's so much about density as it is about planning. Even in a massive area, the correct way to distrubute people in it is so that they can access what they need with ease. Let people live next to the store, their office, the bus stop and so on. How far apart clusters of people are will determine the overall density. Density doesn't say much about whether people are clustered or more evenly spread out however.
It should be noted that this was not an accident, but the result of a concerted effort by corporate interests with major influence in state and federal gov't via professional connections and their control of the labor market. This not only involved the dismantling of existing, car-agnostic infrastructure - clearly, as most major American cities existed and were designed to provide for the needs of its residents before the existence of the automobile - but also represented yet another chapter in the history of collusion between private and gov't entities in the interest of maintaining America's toxic race and class order.
>most major American cities existed and were designed to provide for the needs of its residents before the existence of the automobile
Most major American cities that existed before the car still have public transportation. NYC is a prime example of somewhere you can live without a car. Most other cities still have functioning bus systems, though not great.
It's the suburbs where you really need a car, and the development of suburbs was spurred in large part by the car. So you have your historical order wrong.
Suburbs aren't cities, though it's true that the modern suburb owes its existence to "urban renewal" initiatives which dovetailed with auto infrastructure development (hence the freeway which cuts through the historically black quarter of so many cities, which it connects to said suburbs). Additionally, many of the older small towns had public transit into cities via rail/streetcar.
Maybe that explains cities that were dense and got less dense.
But mostly it’s the suburbs and small towns where cars are totally necessary. Those areas were settled less densely because everyone already had a car. They never had subways and bus routes.
Are there any first world cities that substantially grew in area since 1920 that aren’t primary automotive cities?
Outside of a very small number of major metro areas, cities in America are not livable without a car.
And I say that as someone who really, really despises how required car ownership is, and who has spent a lot of time trying to find alternatives.
Even in reasonably large metro areas where there is a decent bus system, and a passable metro (Atlanta, in this case) a nice E-bike is still nowhere near enough to replace my car.
I've managed to replace the car for my daily commute with a ~40 minute Marta ride, and an additional 20 minutes on the bike (Would be an additional 40+ if I used the buses), but the metro doesn't come within 20 miles of either of my parents houses, nor does it get me to my brother who lives in Athens, GA. Nor does it get me anywhere close to my grandparents. I wouldn't have been able to visit my now wife while dating without a car.
I'm assuming you're not American, but if you haven't visited for a while, I suspect you're just wrong about any sense of scale you might have. Atlanta alone has a metro area of 8400 square miles. Houston is 10,000 square miles.
My wife's family has this problem. They're from Taiwan. When I first visited they warned me about a long car ride to see some family in the country. Long meant 40 minutes.
40 minutes barely gets you across Atlanta. 2 hours gets you to Athens if traffic is decent. 2 hours 30 minutes the a different direction will get you to my family in north GA (and Atlanta is already well in the north half of GA). I can drive south at 80 mph for 4 freaking hours and still be in GA.
> Outside of a very small number of major metro areas, cities in America are not livable without a car.
I guess NYC is one of the "very small number of major metro areas" and yet OP used it to show how you can't live comfortably without a car if you make $2k/month.
I understand how it can be a necessity to have a car, but we are talking about living, so before a car you need a roof, food, water, healthcare and heating.
Based on what I've seen those last few months, there are (a lot of) people that owns a car but don't have a roof or can't buy food or can't have healthcare.
So to me it's really weird to link "living comfortably" and "having a car".
> So to me it's really weird to link "living comfortably" and "having a car".
It depends on where you live. In the vast majority of the US, you simply cannot "live comfortably" without a car. You will be locked in your house/apartment unable to really do much other than get Amazon and some chain store food delivery options. There simply isn't infrastructure available for not having a car to be an option. In these areas, a car is worth more than a roof over your head if you still need it to get to work and other engagements.
In the few major cities in the US where you don't need a car - expenses are crazy. Chicago is considered cheap for a major US city, and is one of perhaps 3 to 6 cities you could say you don't need a vehicle to live in. Even here, you are spending considerable amount of money to be in a decent neighborhood within comfortable walking distance to reliable mass transit. You trade your $300/mo car payment for at least that much more in rent.
Cars are unfortunately a "good deal" in most of the US. They are incredibly cheap compared to many areas of the world, and the vast majority of our population requires them to economically sustain themselves. Very few times does the math work out in the other direction - a $3500 beater car is pretty cheap to maintain when it enables you to pay $1500/mo less in rent if you ignore all other quality of life metrics.
I live in Metro Atlanta (midtown) without a car, and I don't find it too bad. I'm walking distance from work and various amenities. Grocery delivery and Lyft makes it a whole lot easier, and the ~150$ a month saved not owning a car gets you a lot of Lyft, or a rental car if needed.
Camping and visiting family is definitely a bit tricky though.
You have to realize, using miles to convey the "sense of scale" to non-Americans is ironic because... we can't be bothered to understand how much 10000 square "miles" actually is.
For those with high school math ability, it's doable to notice that 10000 sqm is the area of a square with side 100 m, so about a patch of 160 km by 160 km.
>It's funny how many Americans conflate "living" with the possession of a car...
It's funny how out of touch many non-Americans (and to a greater than one would think extent, upper middle class Americans who live in a few select cities) are with the realities of day to day life in most of the US.
Except in a few select areas where transit is very good and the cost of owning a car is very high owning your own personal means of transportation goes hand in hand with a major quality of life improvement and it compounds your relative earning potential (by giving you more flexibility to work more lucrative jobs or reduce cost of living).
There's a reason it comes third after shelter and employment in the list of things you get as soon as you're out of jail (or a coma).
In many regions of the US, it's a simple necessity to have a car, just as it might be in more rural parts of Europe. I know people who work as farmers in the north of the Netherlands, and a car is as essential a commodity for them as it might be for a rural Midwesterner.
"just as it might be in more rural parts of Europe."
Even europeans often have this urban blindspot. In some places (eg netherlands), you may be able to live conveniently without a car. For a lot of places (eg >50% of ireland), not having a car is a major lifestyle inhibitor. Transport (or lack thereof) dictates a lot of your life... from work opportunities to whether or not you can access a supermarket.
Seriously, yes. There is a certain kind of "Professional Online European" who loves to come into discussions and talk about how things are different "in Europe" based on their existence within the Grachtengordel of Amsterdam or their lives in one of the nice bits of Paris. If you want to know the domestic political result of that kind of attitude, and one that is quite related to the issues of who needs a car or not - the Giles Jaunes are the perfect example.
Even in those European countries that generally have good public transportation, it is simply not the case that nobody needs a car. Many Dutch people I know who commute to work on their bikes also have cars. Anywhere outside the Randstad in NL, not having a car can be majorly inconvenient. In large parts of Groningen, Drenthe or Friesland it will be a substantial barrier to employment. Try living in Workum without a car. I hope you like Jopie Huisman because you're about to become reaaal familiar with his drawings as a sole form of entertainment.
In France, a political elite (btw all of whom do have cars) imposed a fuel tax increase on a population of outer-suburban and rural lower-middle-class workers who have to drive to work. Great result that had.
I think this is important for Americans to understand because if they have pinned their understanding of the art of the possible in terms of what has been done in Europe they should understand that putting in a better bus system is not a panacea and that some places are structurally just not going to be reachable with public transport.
A lot of this is just bad policies, and bad economics. Concepts like carbon taxation were intended to govern inter-country problems and large corporations. Applied to consumers, they often amount to simple regional and income discrimination. Country people drive more because they need to, and "pay up or consume less," applied is both heartless and not very efficient anyway. People drive because they need to, and prices must be exorbitant before these policies can eventually drive out the less fortunate.
I don't think most europeans are that fussy about "how" compared to americans. Car size issues, hybrids or electrics are all fine.
Btw, we should be having more pan-european political discourse. These policies are just bad, and unpopular. The fact that they've been "the gold standard" for so long is 50% lack of a decent feedback loop.
That's because Netherlands changed the country to not rely on cars. It used to rely on cars, just like most countries. It's still far from perfect; there's still loads of places where there are not enough options.
Car-only places is considered restrictive. Similarly, kids should be able to do things on their own. Seems nowadays kids rely on their parents to move them around. That's pretty crazy IMO.
Any other country could do the same. Also people in Netherlands complained that "government is going after cars", etc.
Sure. It's not like roads or tracks are a natural feature.
The problem arise when we "go after cars" without an alternative anywhere in sight. I'm pretty dubious of my government's (ireland) likelihood of achieving netherlands-like transport. I'm all for trying. But, the place to start is not by reducing rural car ownership. The reality is that electric cars will probably arrive before rural public transport... at least here.
In practice, there a lot of implicit and explicit anti-driving laws. Many/most of these take the form of economic "incentives." Most affect rural people more. Rural locals don't have much public transport. A lot of these policies are classist too. Changing vehicle standards affect old cars more, making driving unaffordable to poorer people. Same for petrol taxes. Implicit "policies" like allowing a broken insurance system also results in a lot of class discrimination.
In practice, in ireland, saying "you shouldn't own a car" is like saying you should move to dublin or "you shouldn't go anywhere." In cities it means "take the bus or cycle," but not everyone lives in a city.
Meanwhile, I didn't think it's fair that to have policies which essentially mean "poor people shouldn't drive," which many policies with a rural blindspot are.
I would be totally fine with severe anti-car policies in the city or anywhere alternatives exist.
The population density in the Netherlands is one of the highest in the world, higher than any American state and 14 times higher than the US as a whole. So public transportation infrastructure that makes sense in the Netherlands isn't necessarily going to be practical elsewhere.
While you are correct the Netherlands has a higher pop density it really doesn't matter, for a country as a whole.
See, Russia has a population density of 8.4/km2 (vs 33km2 in US).
But that doesn't stop Russian cities from building public transport. Just like how empty acreage and dessert wouldn't stop US cities from building decent public transport.
What matters is not the average density of the country, but the layouts of the cities.
A good example is NYC. According to your statement it shouldn't have public transport because the average of the country is too sparsely populated, but that doesn't really matter. Just like how the empty tundra in Russia doesn't prevent Moscow or St Peterburg from building public transport.
Indeed. You really have to look at settlement patterns and not just a single scalar density. What makes public transport difficult in the US is that suburbs are dense enough that a lot of people live there but not dense enough to put in efficient public transport. If you drew a histogram of the Russian population sorted by density, you would find that a very large % of the population lived in dense local areas and a relatively small population is spread over the vast rural parts of the country. Not even just tundra, even Russia West of the Urals is very sparsely populated for the most part.
And Canada has one of the lowest population densities, a tenth of the USA, and yet has considerably better public transit (though worse than most of Europe).
One major difference I noticed from the USA is that it's usually, at least in principle possible to get from any point A to any point B in a Canadian city over about 20,000 people, by public transit, because even small towns often have public transit systems in Canada. (It might take a couple hours, though.) In many US cities, it's simply not possible because there is no public transit system.
After all, in every developed country, most people live in cities. Government policy and funding seems to be most of the difference.
I'm not sure "technically runs a bus, which may or may not be practical to use" is the most useful metric here.
While I certainly agree there are substantial bright spots in parts of Canada for transit investment, there's also big and worsening issues.
Rural inter-city transit has been getting drastically worse out in much of country.
VIA Rail has mostly been in a long-term downward spiral of cuts/"service suspensions" outside the main Ontario/Quebec corridor.
Inter-city buses aren't much better. Recent years have had Greyhound giving up and quitting Western Canada, and Saskatchewan shutting down their inter-city bus company. The result being limited patchwork of services not coming anywhere close to the kind of service that used to be provided.
Having lived in both countries, I’m not sure there is that much of a difference. Pretty much all the large US cities have public transport. The only Canadian cities I’ve seen with something close to say NYC are Toronto and Montreal. Getting around mom Skytrain in Vancouver is doable, but painful from a lot of areas.
And of course Canada has one of the lowest population densities when you average the population across the swaths of uninhabited arctic. But 90% of Canadians live within 100 miles of the US border in a handful of cities.
Also, you just have to take reality as it exists to an extent. England's population density is high too, but public transport is what it is. They can make it better, if they can. We can't just look at population density, conclude that it could be like the netherlands and proceed as if it is. It isn't.
Regardless, reducing rural car ownership in most places means reducing quality of life. It also reduces economic well being. People have fewer employment options, can't access supermarkets and such...
The whole approach of "make driving expensive" as the main policy vehicle is heartless... The actual way it works is that only wealthier people can drive, and that driving is actually important to people's lives.
It's a totally different proposition in London and in the country. If England (scotland & Wales are more sparse) becomes the netherlands great... but losing your car without gaining regular bus routes is a genuine loss. People need to get around.
Some people tried to grab my young adult daughter.
Safe bet, if they had succeeded she would never have been seen again.
Human trafficking is alive and well in the United States.
Younger ones always go in pairs, and always with adult seeing them.
Crude we were out for a walk the Other day and one kid was several hundred feed in front of us. Car slowed down and was pulling up next to her. Car pulled away quickly when sibling came out of bushes.
I'm dutch, I live in the center of a big city that is extremely bike friendly. At the same time, people are surprised I don't own a car, and I've been considering getting one.
We don't need a car here for most things. But it is still extremely convenient to have one.
Move out of the bigger cities, and things change even more. Bikes are popular, and often used. But very rarely are bikes and public transport able to replace a car. I'd guess like 10% of people go without a car because they don't need it. At the same time, I think almost everyone here will own a bike for just general purpose.
Yeah I know. Most of the people who comment about biking and transit in the netherlands seem to miss the fact that the dutch story is pretty moderate.
20 year olds in cities don't have cars. 40 year olds with kids generally do, and a lot depends on where exactly you live. The Netherlands does a nice job of providing multiple options. The train and bus links ing rural areas are especially impressive, compared to what we (ireland) have. But... it doesn't replace cars. Cars still exist. People use them, just less. It's moderate.
This applies to most of the Nordics as well; once you get outside city limits getting around becomes quite difficult unless you have a car. Once you get further out, it's simply not possible. Many areas simply lack access to public transport, and while a 20 km bike ride can be nice during summer, it's not really an option during winter.
On the other hand, one could live in Copenhagen or Stockholm for an entire lifetime without actually _needing_ a car.
I can imagine the same applies for much of Eastern Europe as well.
I think it is important to note that this isn't just a problem related geography or sprawl. I live in Fairfax County just outside of DC. It's pretty populous (1.15 million) but getting anywhere is still a challenge if you don't live within walking distance of an Orange Line metro stop. This assumes that the metro hasn't caught on fire recently or that the line hasn't been shut down for multiple months for repairs. Bus timetables are so spread out that a 20 minute drive is a 2-3 hour bus ride in a lot of cases.
Sprawl certainly plays a part but lack of investment in public transport is big reason why cars are so essential.
It's certainly not a necessity in NYC though, which was the example given. In most big cities in the US you're better off not having a car if you're poor, since cars are a big ongoing expense. Hell, I'm very far from poor and I'm best off not having a car in NYC.
I think not having a car in NYC is more of a convenience issue than a cost issue(due to parking etc) to a larger degree.
The assumption here is that you are not just barely getting by.
It's both. Insurance and parking are very expensive. If you don't want to pay for parking then you need to budget several hours of your time each week just moving your car around to different parking spots.
..and thank you for reminding me I have to move my car this evening!
Insurance is costly compared to other states. I pay about $1200/year for full everything though(windshield damaged and highway touring).
A friend of mine was just quoted $3000/year for insurance on an Audi. For that I would ride a bicycle everywhere.
Exactly - in Poland there are some regions which are very poor by any definition, and yet every home will have 2-3 cars simply because it's impossible to get anywhere without one. Yeah there is some public transport, but it's often very infrequent or not going where people need to be.
I think it’s because of the way the country was built. Getting from A to B without a car is drastically worse, and it adds up to a proportionally bad quality of living unless you happen to live in a walkable older city (NYC, Boston for example). In some places like Florida your nearest store could be 4 miles away. The bus here is so underutilized and so inconvenient that I don’t think I’ve ever considered. A 30m drive is a 2h bus ride.
In a lot of rural areas, like where I am, there is no such thing as public transportation. If you don't have a car you can maybe make due during the spring and fall months where the temperatures are reasonable. But it's going to be hell during winter (gets cold enough and there's enough snow a bike won't work for you) and during summer it gets too hot.
I'm a 5 minute drive to the nearest grocery store. For a walk, that's about 3-ish miles. On a bike, not so bad, but also keep in mind there's no bike lane or anything so you're sharing the road with cars. There's some added risk to that.
A car isn't a requirement, but it makes a massive difference in your ability to live.
In many areas of the country it is very, very challenging to get anywhere without one. I don't think access to grocery store / work is necessarily trivial to life.
It's an absolute necessity, it's not a luxury contrary to the way it may be painted or viewed externally. Unless you want to diverge from efficiency expectations in modern society needed to work a job and instead move out to an Amish farm of sorts, you're going to need a car.
I'd love to have a viable efficient public transit system, infrastructure, or culture built around it but it simply doesn't exist for well over the vast majority of Americans. All other transit options simply aren't viable alternatives.
a personal car is a big expense. If you can live comfortably in a region with a personal car then it is a significantly different metric than you can live comfortably without a personal car.
Also the way the U.S is structured living comfortably without a personal car means you must be living somewhere where you can work without that personal car, which is a rare job to have, meaning that you can be locked into your employer. Or is that the funny part you're referring to?
on edit: I see lots of people made my second point as well.
You can get a low end new car with a payment of only around $200/mo and buying used is significantly cheaper still. You don't necessarily need to possess a car, but if you don't have the financial means to possess a car then you really can't afford anything beyond the absolute most basic necessities. In a developed nation, that's barely surviving, not living.
This is yet another surprising thing to a lot of people: cars can be very, very cheap in the US: insurance and gas can cost more than a reliable used car. I just sold a perfectly fine car for less than $2000, having bought it new 10 years ago. Someone else will probably buy that car, after a few cosmetic things are fixed, for $3000 or so. It's spent most of its life south of Pennsylvania, so it doesn't have road salt damage, and will probably last another 10 years or more with regular oil changes, etc.
Well, in most places in the US you literally can't go without a vehicle if you want employment and food. Even if you're physically proximate to food and other activities of daily living, there are often no sidewalks or paths to safely walk or bike there. There's also a social stigma of walking (the person must be poor or lost their license for drunk driving).
> Well, in most places in the US you literally can't go without a vehicle if you want employment and food.
That's due to zoning laws being the way that they are. If you'd change the way you'd build up and zone things it would be possible.
The YouTube channel "Not Just Bikes" goes into this in various videos. I couldn't find the exact video that explained the zoning laws, did find another: https://www.youtube.com/watch?v=ul_xzyCDT98 (kids in Netherlands go to school on their own).
Despite Netherlands being considered great for cyclists there's loads to improve. The channel goes into that detail as well, e.g. that major roads are being closed. See e.g. this video of a big road being closed in Utrecht: https://www.youtube.com/watch?v=fePpwYCs_JM (different channel)
I am an American that does not own a car since I live in a city and can live without one. However, for the vast majority of Americans a car is a necessity. There are places with no public transportation and no sidewalks. The only way to get around is to drive.
FTLW Unemployment Rate (FTLW: full-time living wage).
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.
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.
The book "Men Without Work: America's Invisible Crisis" by Nicholas Eberstadt also points to this too. Even though it's four years old, it uses BLS data to show the labor force participation rate and how it has been gradually declining for decades. There also isn't a clear solution since there are so many different causes that contribute to the high number.
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.
I agree, the structure of the argument in the Axios piece is misguided: BLS produces U6, and the journalists don't talk about it, so the BLS is doing something wrong (says journalist).
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.
It's tougher to say that people in high COL areas need to uproot themselves when they fall on hard times. Depending on the means testing scheme, this can actually come out more expensive for the welfare system. Sure it can spend less on rent, but now that you're 3000 miles away from Grandma it also has to buy childcare. Now that you're in a new place with no friends, maybe you get depressed and need mental health services. Etc, etc.
Rent is absolutely not nationally priced. It can vary 10x.
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.
I don’t know if participation rate is fair either. Largely because (a) the population is aging and is likely to retire (with wealth amassed and (b) this is really only possible because the government has started subsidizing pretty much everything (food, healthcare, housing, etc) either generally or for those “too poor”.
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 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"?
As someone who grew up relatively disadvantaged, I think I probably know a larger percentage of those “taking advantage” over the the “average” American. Further. I also used to volunteer regularly helping donate food, helping families, etc.
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).
I think it is really difficult to fix the issue where having a job is worse than not having one.
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.
yeah - but if you increase the minimum wage all you're doing is hurting the middle class. If i had a relatively Okay/good job that required some kind of education (phlebotomy, for instance) and get paid $20 an hour, I can live comfortably. Once you raise the minimum wage to $18 an hour, my pay isn't going to jump but you can bet inflation will.
> Benefits fraud is a thing, the good that benefits and welfare does to a society are much larger than the impact of fraud.
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.
The cost of fighting fraud often is more than the fraud you catch - because the act of fighting fraud means those who would commit fraud either don't, or hide their tracks. Thus the result isn't unexpected and doesn't say anything about if it is a good idea or not (which is a very complex argument that I don't know enough to get into)
> Have you ever lived on that lifestyle to check your assumption that they have "very little incentive to try and find a job"?
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.
People vastly and I mean vastly under estimate how poor of living conditions many will accept if they don't have to lift a finger to provide for themselves.
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.
The problem is it is hard to figure out what is required.
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.
The GP didn't imply nearly the level of judgement that you're projecting on him.
>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).
> 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.
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)
Feel free to read my other response. Generally, I agree you should be suspect of my statements. We should also be suspect if the statements you’re making.
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
I don’t see how your anecdotal data can be counted as more valuable than BLS data backed by payroll, benefits, and subsidy data from employers and providers.
It is concerning that the top comment on this article is an attempt to divert the argument from the substance and implications of the article to numbers. It is the equivalent of responding to a statement that "the ship is sinking" with a detailed analysis of the technique to measure the depth of water.
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.
The problem is the article isn't reporting a fabric of information. The article even calls their metric the "True Unemployment Rate". The name of the metric alone should give you pause when the situation is as complex as it is.
How do you know the “ship is sinking?” What unemployment number is necessary such that the ship is not sinking?
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.
The problem with unemployment numbers is that you only realize that the ship was sinking after the fact. The exact line of percent unemployment (and length of unemployment) at which a society falls apart isn’t a known factor.
I'd trust the article more if I were confident that it wasn't an attempt to sell another ship that may or may not have more holes than the current one.
The point I've always taken away from the US's faniciful unemployment numbers is that the USG could be doing A LOT more research in this area, but instead chooses not to. The Department of Labor, or some other government agency, could publish many different metrics that explore the issue of unemployment in many different ways. Because like any social phenomenom, there are lots of different ways to slice this pie.
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.
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.
The stats cited in this article are headline-worthy but they don't make much sense.
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?
Agreed, I am a freelancer making six figures married and my wife hasn't worked since we were dating. So according to their definition my wife is unemployed, not making a "living wage" and so am I. This is a perfect example of why I pay little attention to the news. They or their editor must have known this was bs but decided to publish it anyway for the clicks.
Whose definition are you referring to? The official BLS unemployment statistics only include people who are actively looking for work, so they wouldn't count your wife as unemployed.
Exactly. What is currently touted as an Unemployment number should be renamed: "% of those who are seeking full-time employment but not currently full-time employed". Perhaps "Unfulfilled Job Seekers" might be a better term than "Unemployed".
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"
When I looked at this a while ago I selected the male 25-54 years old population to remove situations like the one of your wife, schooling, and retirement.
> If you measure the "unemployed" as anybody over 16 years old who isn't earning a living wage...
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"?
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.
> a lot of people are at school / university and likely "funded" by their parents
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.
I agree with you, with different reasoning. The number of people without adequate employment (as in, they'd take a full time living wage job over their current situation) is a useful means of understanding the economic situation.
Counting a student who has reasonable expectations of living wage employment, post graduation, distorts that measure.
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.
Your definition differs from the one used in the article "A person who is looking for a full-time job that pays a living wage — but who can't find one — is unemployed"
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.
So why should we not include children of all ages and retied people as well then? They are also unemployed.
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.
What about retired people who aren't really retired, they are just drawing on their pension sooner than they'd like, as a desperate alternative to employment money to lengthen their rental runway to homelessness? Or they are drawing on a pension while doing food delivery gigs on the side to top it up to pay for essentials?
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.
Many full time students are employed throughout college. As someone who attended the state colleges my family could afford, most students had part time employment and many were working full time.
If they are "funded" by their parents - why would they need to earn any of that back? Is that really how it works in the US? It's a matter of course in other countries that parents fund the education of their children.
> It's a matter of course in other countries that parents fund the education of their children.
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.
You can't forget the HN demographic of upper middle class white men who pay for their children's education. I'd say most young adults entering college have a loan in their name.
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.
The post is titled "America's True Unemployment Rate," so it does make sense in this case to assume were talking about USA. I certainly was in my comment above.
Fair point about your comment, I'm just trying to make my point based on the original generalization I replied to: Part of it is simply wrong even for the US (see siblings), and the rest cannot stand as a generalization for the rest of the world, which "any statistics about students" doesn't account for.
Sorry, I worked through my entire undergrad as well.
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.
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.
That makes it a less useful statistic for talking about problems around unemployment. I think that's why the BLS has so many different measures of unemployment.
If I had enough money in the bank to live the rest of my life comfortably, there's no way I'd be employed.
“Unemployed: People who are involuntarily out of work considered as a group.”
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.
Why do we care that people are working? There are many reasons, probably, which is why there are different measures. I do think most of these measures (incorrectly) presume that having a job means you have a living wage, or at least at some level, that if you have a job you generally don't need so much assistance.
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.
Americans seem to have a deep resentment of being taken advantage of. They're not un-generous, but their generosity is only for the "worthy", and they're afraid that the un-worthy are benefitting.
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?"
That shouldn’t be a shocker to you, it comes down to fairness. If you have two 30 year old males, both capable of work and one works a full time job, pay 1/3 in taxes and the other guy chooses not to work and is effectively supported (in part) by the guy working, is that fair? I think most people would say no.
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?
If you want to talk about what's unfair, the low-hanging fruit is the increasing income inequality between executives and typical workers [0], or the executives paying a lower rate in taxes than their secretaries [1].
> People who can contribute but choose not to are pretty quickly pushed out.
"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.
That's a whole lot words that don't really address my point. It's a pretty universal human belief in "contributing to the common good". Even toddlers recognize fairness.
OP claimed it was some uniquely American belief. I haven't seen any evidence to support that.
If you have two 30 year old males, both capable of work and one works a full time job because they have to and another has a 10 million dollar inheritance from his family and wouldn't know what work is if it slapped him on the face, is that fair?
I care because I'm supporting them to my job. I have sympathy for those who can't work (or can but only minimal levels) - and I know a number of them. However I also know some who could work but are milking the system (less than the number who can't work).
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.
The pennies going towards our neighbors is probably negligible on the list of things getting between you and your new toys.
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.
Thanks for posting. Yours is the first comment that doesn't futz with the definition of a term and instead considers the effect of unemployment on actual people.
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 have recently been watching a documentary series by a Norwegian musician that grew up in the rustbelt in America in the 70'ies [0], but moved with his famliy to Norway in his youth. He has been going back, visiting family, friends and random people and interviewed them, and it is frankly heartbreaking to witness the struggle the the 'average joe' has to endure.
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.
You make a compelling point about health insurance being independent of employment status. In America it is mostly the opposite - health insurance is provided as a condition of employment - so that those who suffer unemployment experience a cruel double whammy of losing their ability to care for their families health just when they need it most.
Every country does things to minimise this number (that doesn’t make it right, just a fact that I wish weren’t true). I’m pretty convinced the UK’s push to make all 18+ education a 3+ year university qualification was to improve employment figures for that age category. Bit of a long con, eg: go to uni to study early years development with 3 contact hours a week and once that’s the only way to become a nursery school teacher charge £9k a year for uni fees for a job that pays maybe £20k a year. I know so many 25 year olds who’s student loan interest rate is higher than the amount that is deducted from their pay check by the student loans co earning in the mid 30k region
For Germany there are "training measures". You'll be put in some course for three months and by doing that you are no longer "unemployed". That's great for the statistics but that's about it. I've heard those training are not really great.
Am measure measures what is measures. Generally, measures like unemployment are useful in determining trends. Note how most of the unemployment measures are correlated.
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.
One thing I've noticed in America compared to Europe is that the top salaries pay more which allows more stay at home wives. In Europe a manager/doctor/tech worker doesn't earn as much and its more likely that the wife is also in full time employment. Its anecdotal so I can't be sure, but its what I see in my neighborhood.
The data doesn't really bear that out although some countries, e.g. in Scandinavia, are relatively higher. There's not a huge difference between Europe and the US in general: https://data.worldbank.org/indicator/SL.TLF.CACT.FE.NE.ZS
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.
This is also a question of tradition and choices. Speaking for eastern Germany, it was very common for women to work and this is also a choice of living, maybe encouraged by independency/emancipation
It's much less common in Western Germany, and the difference largely persists to this day. The Economist recently had a good article on that, non-paywall link: https://outline.com/DZyckV
Women worked in all countries in the Soviet block, as the communist ideology was generally anti-family, so anything that weakened family ties was seen as positive. Also, of course by having two people per family working for the state (and there were hardly any private jobs, state was the main employer), the state can squeeze more value out of them.
Anecdotally from the generation of people that lived in Eastern Germany, especially in rural areas, a sense of community, solidarity and purpose is what went missing after the Berlin wall came down.
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 have never thought of having more women in the workforce as "anti-family"
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.
As a teacher, I had the great benefit of staying home with my toddler over the summer, and I can decidedly tell you that my wife was far more chipper and ready to provide positive attention to our son in the evenings than I was.
Both parents are working, so the children are cared for by the state in Ganztagesschulen (Germany, literally Whole-Day-Schools). It's a mix of "we must raise the children because some parents are unwilling/unable to do it themselves" and necessity for average parents who cannot afford for one of them not to work full time.
That does not make current female employment unrelated to independency/emancipation, just like wester female employment is related to that too.
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 don't think that holds. Here's a data set of female/male work force ratio for a bunch of nations. The US at 85% isn't notably different from the rest of the industrialized world. It's a little bit lower than the UK but a little bit higher than Germany, etc...
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.
Staying at home is also religion related. Evangelical and conservative groups (of both genders) want to have women at home regardless of how rich they are.
German moms less likely to return to work then Americans. Moms in Switzerland also have difficulties to return to work, although I cant find statistics now. Where I live, programmers earn almost double average salary, so I am pretty sure that it would be possible for their wifes to stay at home if they wished financially.
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".
Additionally in some European countries (e.g. Finland, probably other Nordic countries as well) there isn't family taxation so 2 people earning 3000 a month is better than single person earning 6000.
The Arab world and india lead in numbers of stay at home wives / mothers. but not for long, as a lot more out of the house jobs for women (and husbands and fathers also) are now stay at home even in the rest of the world...
> If you measure the unemployed as anybody over 16 years old who isn't earning a living wage
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"
> A person who is looking for a full-time job that pays a living wage — but who can't find one — is unemployed.
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.
Yep. U5 and U6 are always bigger than U3, pretty much by definition.
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.
The problem with LFPP is you need to understand age demographic trends, institutionalization trends (both positive like higher-ed and negative like incarceration), and some other things to extract much meaning from it. A demographic bulge hitting retirement age and a wave of mass incarcerations and a massive surge in higher ed enrollments all can have the same manifestation in LFPP, and all the same as a massive wave of layoffs without replacement opportunities elsewhere in the economy, but I can't think of any purpose for which one would look at employment statistics, particularly as a policy guide, where you'd want to treat all those things as even approximately equivalent.
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.
“If you measure the unemployed as anybody over 16 years old who isn't earning a living wage, the rate rises even further, to 54.6%. For Black Americans, it's 59.2%.“
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.
If the current social turmoil in the US is any indication, we can assume a lot of disenfranchised people are currently hurting financially. When everyone works and has enough income to live the 'dream' such unrest is usually not present. As en example, after WWII industry was booming, and standard of living was very high.
> the true unemployment rate in the U.S. is a stunning 26.1%
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.
Yeah, but an article that just states that about 20% of the employed earn less than 20k/year (which is all that this article amounts to) is not going to get as many clicks, shares and HN comments.
Aside from the other cogent comments about how to effectively measure unemployment and what that might tell us about the economy, this article is pretty shite.
> "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.
Going back at least to the Clinton administration, and probably earlier, every president gets accused of manipulating unemployment rates by using U3 instead of U6 or some other metric. But as far as I know, it's always U3 used between administrations for comparisons but pundits will be pundits, switching their view depending on who is in office. It's the same with "plays too much golf", "uses Air Force One for campaigning" for every incumbent, and of course "goes on too many vacations". Just something to keep in mind no matter who is in office at any given time.
To be counted as unemployed, you must be engaging in job search.
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.
Goodheart's Law says that when a measure becomes a target, it ceases to be a good measure. Generally, that's because you start optimizing around improving the measurement rather than the conditions the measurement is supposed to depict. In other words, you start cramming for the test, rather than learning the subject.
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?
> If you measure the unemployed as anybody over 16 years old who isn't earning a living wage
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?
Exactly. There's a bit difference between the number of people who want to work but can't find a job, and the number of people who are doing something productive that just happens to be unpaid, because it's going to school or something else. These numbers mean different things and have different uses.
It's a sad place if you assume all the flaws in the article are obvious to everyone, then reduce everyones behavior to "orange man bad", and then complain about how it's a sad place.
Given that this is generally place of intelligent people, it should be concerning that they didn't pick up on the fact that the article is quite obviously using a massive portion of the population to inflate their argument (16-20 year olds). This is likely the effect of the argument fitting in with everyone's preferred narrative.
The article redefines unemployment to include underemployment.This is just one example of fudging terms, not trying to educate the public. Experts use difficult and precise terms so lets use our own.
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"
Ok so the article points out well known deficiencies in the widely used definition for unemployment and presents a nation wide figure using a magical undefined number called the living wage applied against a data set revealed only to Axios on HBO whatever that is.
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.
If everyone knows how the unemployment rate is built[0] is it so bad that it's built that way?
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.
>> an important new dataset shared exclusively with "Axios on HBO."
This doesn't seem trustworthy. Why not use BLS data?
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.
>To be classified as employed for LISEP’s true employment concept, an individual must either have a full-time job (35+ hours per week) or have a part-time job and no desire for a full-time job (e.g., students). The second stipulation is that an individual must earn at least $20,000 annually. This annual wage is adjusted for inflation, calculated in 2020 dollars. ($20,000 is chosen based on the U.S. poverty guidelines put out by the Department of Health and Human Services, which considers a three-person household to be in poverty if it has an income of less than $20,000 per year).
Commenters are arguing about U-3 versus U-x but the question is really: how should our population think our economy is doing? The rhetoric on the news since 2008 has been: oooh, look at those low unemployment numbers! But reality doesn't seem to have matched the claim that low-unemployment-means-people-are-doing-well... Unemployment was near record lows and wages weren't increasing much (even with a suitable time lag)? Whatever measure we're currently using, it doesn't seem to be serving the population well. Certainly is serving politicians well. How is labor force participation down so much over 20 years if we're doing so well?
(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...
I think the definition of unemployment has been contentious for as long as it exists.
Axios is choosing to go with the definition of 'People looking for work or working while earning less than 20,000 USD per year'.
The employment numbers are naturally going to be higher than when the definition is just 'People earning nothing and looking for work'.
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.
>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.
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.
His definition of unemployed maps perfectly to the good and often used term underemployed - basically people that want more hours and money and are unable to find them.
If you learn in 2020 that there are a lot of working poor, you haven't been paying attention in the last 12 years.
There's a good perpetual market for people peddling secret shocking truths that the powers don't want you to know, and everything is secretly much worse than you thought, about pretty much everything, AKA conspiracy theories.
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.
Governments often fiddle with the definition or use other benefits to hide the true rate - in the UK there was pressure in the (1980's) for NHS GP's to put older unemployed people on disability to reduce the headline unemployment rate.
> 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%
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.
Why we care about employment metrics anyways? Seems we should just be measuring people's revenu adjusted to their current geography.
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.
If I were ever to return to being a news junky, axios.com would be at the top of my source list.
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.
What matters is measuring consistency across time and across borders.
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 mean, sure, but why not add additional measures forever, right?
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.
"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.
Unemployment is just one of several metrics which need to be viewed together to get a proper picture.
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.
I've often thought we need many more metrics to gauge the economy. Wage data, actually employment, a much better sense of who is doing well financially. The main numbers shared in the news just aren't that useful, and have allowed a lot of discontent to flourish under our noses, with disastrous political results.
Felix Salmon has always been a pleasure to read. If you like his writing, you might enjoy him on the Slate Money podcast. https://slate.com/podcasts/slate-money
I have to wonder if a better way to look at this over time would be instead to look at the Employment Rate. What % of people have employment? Maybe have a rate that doesn't even factor out people "not in the workforce".
I am surprised that they don't show the unemployment rate as a map. I am sure that the rural / coastal unemployment rate is a strong driver of why political disagreements are so divided in the last decade.
I think a lot of contention in the comments would have gone away if, instead of calling it "True Unemployment Rate", Axios had chosen a different term.
"Dependent Rate" may have been a good alternative?
The other important number that is manipulated is inflation (CPI). When you add the manipulation of inflation and joblessness together along with encouraging financial asset bubbles you can pretend to have a great economy when there is actually a recession or even depression. [1]
The government has every incentive to manipulate the CPI: it even reduces their social security payouts.
I don’t know that the government excessively manipulates the CPI, given it shows constant steady inflation since the 1950s[1].
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!”
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.