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The True Rate of Unemployment

lisep.org

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Re: The True Rate of Unemployment

#11

Post by pknomad »

I am not an economist but I do follow economic policies, usually in the form of blogs written by economists such as Noah Smith, Greg Mankiw, et al.

I will leave this here: https://www.reddit.com/r/badeconomics/comments/jd3p0l/axios_...

to show why LISEP's measure of unemployment is problematic. I haven't had chance to look at the methodology for this particular piece but I suspect it's also got few holes/unmentioned bias in there (as so many of these think-tanks do).

BLS also has different measures of unemployment (see: https://www.bls.gov/news.release/empsit.t15.htm) and what LISEP is citing as "headline unemployment" is U3. Not all metrics are perfect and I think it's important to understand the methodology and the nuances of how to apply these different metrics.

Re: The True Rate of Unemployment

#12

Post by bryanlarsen »

tomcar288 wrote: post #7

I think what's going on is, we're having period of high inflation. Here's my theorey: this high inflation is effectively lowering the minimum wage level because minimum wage isn't keeping pace with the real rate of inflation. and because minimum wage is decreasing in real terms, this opens up lots of new positions that were made illegal by minimum wage. and so more and more people are finding jobs at the low end of t…

Wages have been increasing faster than inflation for the last 10 months.

Re: The True Rate of Unemployment

#13

Post by xnx »

voidwtf wrote: post #6
jeffbee wrote: post #3

Earlier quoted context omitted.

Looking at the first graph, it doesn't seem like this is a "shadowstats" group of cranks trying to tell you that the economy is worse than it is. According to their "true rate", the unemployment situation (as they define it) is now better than it has ever been. The "true" stats look better than the real ones.

Sometimes I wonder if we’re tracking the wrong thing and we’ve lost sight of why we even started tracking these type of stats to begin with. Are Americans prospering? Can they afford minimum needs like food and housing? Is the average American quality of life remaining consistent or increasing? I want to see America as a whole do better and sometimes I wonder if stats are being deliberately reported in a way that obs…

GDP is definitely suffering from Goodhart's law.

There's a whole zoo of alternatives, but I don't know if anyone takes them seriously.

Human Development Index (HDI)

Genuine Progress Indicator (GPI)

Better Life Index (BLI)

Gross National Happiness (GNH)

Re: The True Rate of Unemployment

#14

Post by WheatMillington »

bryanlarsen wrote: post #12
tomcar288 wrote: post #7

I think what's going on is, we're having period of high inflation. Here's my theorey: this high inflation is effectively lowering the minimum wage level because minimum wage isn't keeping pace with the real rate of inflation. and because minimum wage is decreasing in real terms, this opens up lots of new positions that were made illegal by minimum wage. and so more and more people are finding jobs at the low end of t…

Wages have been increasing faster than inflation for the last 10 months.

Across all earnings brackets, or only some? We know for a fact that the parent comment was correct that minimum wage has not kept up with inflation, and I'd like to see how earnings have compared to inflation across brackets rather than in aggregate.

Re: The True Rate of Unemployment

#15

Post by bryanlarsen »

WheatMillington wrote: post #14
bryanlarsen wrote: post #12

Earlier quoted context omitted.

Wages have been increasing faster than inflation for the last 10 months.

Across all earnings brackets, or only some? We know for a fact that the parent comment was correct that minimum wage has not kept up with inflation, and I'd like to see how earnings have compared to inflation across brackets rather than in aggregate.

average across all brackets. And it's per person. So specific jobs haven't increased that much, the big gains are in people switching employers.

The biggest increases have been in the bottom 10% and the top 10%, union members and job hoppers.

https://www.statista.com/statistics/1351276/wage-growth-vs-i...

Re: The True Rate of Unemployment

#17

Post by okaram »

tomcar288 wrote: post #7

I think what's going on is, we're having period of high inflation. Here's my theorey: this high inflation is effectively lowering the minimum wage level because minimum wage isn't keeping pace with the real rate of inflation. and because minimum wage is decreasing in real terms, this opens up lots of new positions that were made illegal by minimum wage. and so more and more people are finding jobs at the low end of t…

Sorry, we are NOT having high inflation any more, regardless of what you feel or think.

Re: The True Rate of Unemployment

#18

Post by CardenB »

bryanlarsen wrote: post #12
tomcar288 wrote: post #7

I think what's going on is, we're having period of high inflation. Here's my theorey: this high inflation is effectively lowering the minimum wage level because minimum wage isn't keeping pace with the real rate of inflation. and because minimum wage is decreasing in real terms, this opens up lots of new positions that were made illegal by minimum wage. and so more and more people are finding jobs at the low end of t…

Wages have been increasing faster than inflation for the last 10 months.

Bottom 25th percentile has been zero or negative growth at least back to 1998. This would include minimum wage and support the original argument. This doesn't seem to correct for inflation, so zero or negative wage growth is punished completely by inflation.

source: https://www.atlantafed.org/chcs/wage-growth-tracker#Tab3

Re: The True Rate of Unemployment

#19

Post by skellington »

zzleeper wrote: post #9

If this data is correct, then ONE THIRD of the population was unemployed in 1995. Is this reasonable? Also, why include people with no jobs? That would include stay-at-home parents and even FIRE folks that retired early

Politically editorialized data. They just redefine what unemployed/underemployed means.

But the official numbers are undercounting the unemployed because they also changed the way they interpret the numbers.

The real unemployment rate using the old measurement methods is probably around 8% which isn't good, but it's not 23% which would be deep depression type numbers.

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