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Low unemployment isn’t worth much if the jobs barely pay

brookings.edu

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Re: Low unemployment isn’t worth much if the jobs barely pay

#41
This is based off of 2016 data and an self admitted overly expansive view of what the proper cohort is.

(eg, they include college age students when they are usually left out because things like increase college enrollment would skew the numbers).

All their distributional data and numbers for what counts as low wage workers comes from a 2012-2016 Census Bureau survey. They then claim without much justification "we think it is unlikely our finding would change significantly if we considered more recent wage data" for the 2017-2019 period.

edits:

strangely enough they exclude graduate and professional student, but still include 18-24 year olds in high school or college. And they exclude self-employed for reasons similar to why you would want to exclude 18-24 year olds. And that 18-24 year old group accounts for only 4% of mid and high wage work, but 24.3% of low wage work, so it is clearly skewing the results.

And the largest category of low-wage workers (a plurality) is classified as "low-wage workers in a family with mid- to high- wage workers". I'm not really sure we care about that as much.

Reading more, they have some very strange inclusion/excisions, such as they exclude professional and grade students because they are seen as having a career path, they include "springboard jobs" because some might not transition out of them. That's just sloppy and lazy.

Sounds like some serious data hacking going on.

Re: Low unemployment isn’t worth much if the jobs barely pay

#43
post #5

Earlier quoted context omitted.

That is why we also track the labor force participation rate [0]. [0]: https://fred.stlouisfed.org/series/CIVPART

I can’t tell from your comment but I’m not sure this is what you expect. This is not people who have never had a job. This is a (now politically motivated) estimate of the number of employable people. Subtle difference.

I have never heard of the U.S. Bureau of Labor Statistics being politically motivated. This is a very new accusation. Do you have any reference?

Re: Low unemployment isn’t worth much if the jobs barely pay

#44
post #22

America has a weird sense of superiority about its lower unemployment numbers vs Canada. The difference is the US, you basically need a job, or else you're one broken ankle, complex childbirth, or infected hangnail away from complete financial ruin. People being able to take extra time to find the right job is a good thing for the economy. Better than being driven by an abject fear of not having a job.

I don't think it's terribly strange to view lower unemployment numbers as something to strive for. The idea that I might not need a job (when I haven't accumulated the resources to support myself without one) is totally foreign to me, and not attractive at all.

I grew tremendously as a person working jobs I didn't enjoy. I only work on what I want to now, and I couldn't imagine I'd be very satisfied with my life I didn't navigate to this position through hard work.

Re: Low unemployment isn’t worth much if the jobs barely pay

#45
post #22

America has a weird sense of superiority about its lower unemployment numbers vs Canada. The difference is the US, you basically need a job, or else you're one broken ankle, complex childbirth, or infected hangnail away from complete financial ruin. People being able to take extra time to find the right job is a good thing for the economy. Better than being driven by an abject fear of not having a job.

Your hypothesis does not hold up to the data. The unemployed in Canada experience the same penalty in life satisfaction as the unemployed in the United States:

> On average, the unemployed experience lower life satisfaction than the employed by about 0.3 standard deviations in Canada and the United States, by 0.32 standard deviations in the United Kingdom and by 0.47 standard deviations in Germany.[1]

Your claims relies on the assumption that unemployment in Canada is more tolerable than unemployment in the US. Yet large-scale surveys do not reflect that for the average jobseeker.

Therefore we can conclude that higher unemployment in Canada vis-a-vis the US is almost certainly driven by a lower supply of jobs, rather than as you posit a lower demand for employment. The same also holds true for the major Western European economies surveyed.

[1] https://www150.statcan.gc.ca/n1/pub/11f0019m/11f0019m2018408...

Re: Low unemployment isn’t worth much if the jobs barely pay

#46
post #44
post #22

America has a weird sense of superiority about its lower unemployment numbers vs Canada. The difference is the US, you basically need a job, or else you're one broken ankle, complex childbirth, or infected hangnail away from complete financial ruin. People being able to take extra time to find the right job is a good thing for the economy. Better than being driven by an abject fear of not having a job.

I don't think it's terribly strange to view lower unemployment numbers as something to strive for. The idea that I might not need a job (when I haven't accumulated the resources to support myself without one) is totally foreign to me, and not attractive at all. I grew tremendously as a person working jobs I didn't enjoy. I only work on what I want to now, and I couldn't imagine I'd be very satisfied with my life I di…

Do you think it's possible to work hard at something you enjoy?

Re: Low unemployment isn’t worth much if the jobs barely pay

#47
I would like to advance a different opinion. There are many that are proponents of Universal Basic Income (UBI). However, many state that one problem with UBI is that it comes at the expense of personal gratification and economic productivity.

I am of the opinion that low wage jobs are a form of UBI. In this manner, individuals are paid a basic income in exchange for their productivity. However, these jobs are not meant to create wealth. They're meant to provide subsistance. This is much the same goal of UBI.

For those that say that benefits (health, retirement, sick pay, family leave, vacation) are necessary in addition to low wage income which often does not supply many or any of these benefits, I would say that is the case for UBI as well.

For UBI to work, there must be a base of benefits to support the UBI. As such, I see UBI and low wage as fairly synonymous except that UBI is seen as providing income without any productivity required of the individual, and low wage being UBI with required productivity.

In many ways UBI and low wage work come at odds. The more that UBI is offered, the less that individuals would want to do low wage work. Rather than pushing up wages for low wage work, dis-incentivization of low wage will push employers towards automation. As such, low wage is a support of employment generally. The more that employers move towards automation, the more that low wage jobs are eliminated, the more that UBI becomes the only alternative to low wage. As such, low wage jobs do provide a necessary function in the economic system.

This is just food for thought.

Re: Low unemployment isn’t worth much if the jobs barely pay

#48

>53 million people earn low wages, with a median of just $10.22 per hour. That’s nearly half of the 18 to 64 workforce. 10.22 is just a number. It wouldn't be better if they earned $20.44 per hour because costs would double, too. It's like the SF housing market: people spend what they have. SF residents could live luxurious lives if they wouldn't outbid each other and kept prices low. Likewise, the lower half of the…

Doubling the minimum wage does not cause costs to double. This is a very flawed analysis- the minimum wage doesn't affect the entire population (less than half!) so raising that wage only raises the costs of things a small, proportional factor, if at all.

I find we tend to apply microeconomic theorems to macroeconomic activities far too often.

Re: Low unemployment isn’t worth much if the jobs barely pay

#49

I do not agree with that, having a job is always a good thing for mental health. It is always better than staying at home doing nothing.

When I was younger, I worked a job at a car wash. There was only one thing I really did all day long- vacuum cars and wipe them down.

This got repetitive quickly, and the managers got really upset whenever you slacked off in the lulls. Groups of more than three people chatting while we had "downtime" were more or less immediately disbanded. Checking your phone, even to text your family, was a big no-no on company time. There was no such thing as a "smoke break" (I don't smoke, but man a five-minute break occasionally would've been really nice.)

I hated that job. I dealt with a bout of depression because of that job. The turnover there- among people who were talented- was exceptionally high (I lasted about two months before I found a better job) because the job was so menial- and the managers so demeaning- that all joy in working was lost fairly regularly.

It would've been better than staying at home and playing games all day long, but I'm sure that I could've done something more productive, without pay than I did with pay.

Re: Low unemployment isn’t worth much if the jobs barely pay

#50

Low unemployment drives productivity gains that keep wages low and that contributes to increased unemployment. See the cycle play out here: https://fred.stlouisfed.org/graph/?g=pTTx Workers with skills that align add productivity see wage gains. Workers and entire businesses on the wrong side of the productivity wave end up dislocated. I'm sure UBI and other public policy efforts can correct this, right about the tim…

Low wage labor and UBI are actually two sides of the same coin. The less that low wage labor is available, the more that UBI would become necessary to support the economy. The more that low wage labor is available, the less that UBI becomes seen as a necessity. The more that UBI is offered, the less that individuals would seek low wage labor. The less that individuals seek low wage labor, the tighter the employment market for such service, which motivates employers to seek higher productivity and automation rather than increase wages, which furthers the cycle above.
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