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The True Rate of Unemployment

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Re: The True Rate of Unemployment

#31

Post by ta2234234242 »

milesskorpen wrote: post #24
okaram wrote: post #17

Earlier quoted context omitted.

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

Sure, inflation rates have come down from their highs, but we don't have deflation so $1 today is still worth less than $1 from 2020 — which means $15/hr minimum wage is worth less today than in 2020.

But that's always true, and forever will be as long as the fed believes that gentle inflation is the way to spin the economy. And most serious economists, even the freshwater kind, don't want that to change.

If you think deflation is better, ie money in the bank should be worth more over time, just look at what happened to Japan with their deflationary economy. Some call it the "Lost Decade".

Re: The True Rate of Unemployment

#32

Post by strix_varius »

comte7092 wrote: post #2

>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 $25,000 annually before taxes. So many discussions online about unemployment take a framing like this, implying not so subtly tha…

It's easy to use data to mislead; you see this all the time in organizations of any size, but especially in larger organizations - why would you expect the government to be the sole exception?

For example, it's been demonstrated that workers on disability is inversely correlated with unemployment: https://apps.npr.org/unfit-for-work/

West Virginia, Mississippi, and Kentucky all have almost 20% of their adult populations on disability:

https://www.statista.com/statistics/794278/disabled-populati...

Meanwhile, on kentucky.gov:

> Today, Gov. Andy Beshear announced that Kentucky set the lowest annual unemployment rate in state history for 2022 at 3.9%

https://www.kentucky.gov/Pages/Activity-stream.aspx?n=Govern...

Would you say that the Kentucky government patting itself on the back for unemployment rates of 3.9%, while in fact real unemployment is at minimum 21.6%, is something other than the government lying about what unemployment actually is?

Re: The True Rate of Unemployment

#33

Post by williamcotton »

strix_varius wrote: post #32
comte7092 wrote: post #2

>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 $25,000 annually before taxes. So many discussions online about unemployment take a framing like this, implying not so subtly tha…

It's easy to use data to mislead; you see this all the time in organizations of any size, but especially in larger organizations - why would you expect the government to be the sole exception? For example, it's been demonstrated that workers on disability is inversely correlated with unemployment: https://apps.npr.org/unfit-for-work/ West Virginia, Mississippi, and Kentucky all have almost 20% of their adult populati…

A politician is not the government.

Re: The True Rate of Unemployment

#34

Post by janalsncm »

ta2234234242 wrote: post #29
CardenB wrote: post #18

Earlier quoted context omitted.

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

Sure but not everyone stays in the bottom 25%. College students would be one category that you would expect this to be true of. I was certainly in the poverty level in college, but not anymore. What we really care about are the people who are persistently in poverty and whether or not that number grows or shrinks. If it shrinks the economy is helping real people, if it's not, it's helping the well off.

I don’t think college students would be counted in this metric because it only counts people who want a full time job. A full time college student likely does not.

Re: The True Rate of Unemployment

#35

Post by nickff »

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…

This is basically Keynes' theory of wages and prices.

https://en.wikipedia.org/wiki/Keynes%27s_theory_of_wages_and...

Re: The True Rate of Unemployment

#36

Post by ta2234234242 »

its_bbq wrote: post #25
jrflowers wrote: post #23

Earlier quoted context omitted.

Whenever I hear people complain about rent or groceries I always politely inform them that the Δ Δ of their rent is quite low this month and that means the economy is in fact good

I'm sure that helps them pay their rent and put food on the table.

Some people believe a bad economy spurs skills development as people look to develop higher paying skills.

They go back to college, they develop new skills, they do some training, etc, etc.

That's what makes economics hard is that we're dealing with 400M walking talking humans in the US.

Re: The True Rate of Unemployment

#37

Post by CardenB »

ta2234234242 wrote: post #29
CardenB wrote: post #18

Earlier quoted context omitted.

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

Sure but not everyone stays in the bottom 25%. College students would be one category that you would expect this to be true of. I was certainly in the poverty level in college, but not anymore. What we really care about are the people who are persistently in poverty and whether or not that number grows or shrinks. If it shrinks the economy is helping real people, if it's not, it's helping the well off.

So you are arguing that there is increasing mobility?

Or do you argue that people are bouncing between jobs with lower wage growth and higher wage growth, so the bottom 25% of wages are getting worse and worse, yet they are only temporary?

It seems pretty clear that 25% of earners experience no growth or negative growth YoY while 25% of earners see wage growth that outpaces inflation. Unless they are swapping places constantly, it's not really healthy for this to occur over a long period of time (as it has).

Re: The True Rate of Unemployment

#38

Post by lmm »

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

> If this data is correct, then ONE THIRD of the population was unemployed in 1995. Is this reasonable?

1/3 of the population "unemployed by modern standards" in 1995 doesn't sound unreasonable to me. Back then one stay-at-home-parent was a lot more normal.

Re: The True Rate of Unemployment

#39

Post by voxl »

strix_varius wrote: post #32
comte7092 wrote: post #2

>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 $25,000 annually before taxes. So many discussions online about unemployment take a framing like this, implying not so subtly tha…

It's easy to use data to mislead; you see this all the time in organizations of any size, but especially in larger organizations - why would you expect the government to be the sole exception? For example, it's been demonstrated that workers on disability is inversely correlated with unemployment: https://apps.npr.org/unfit-for-work/ West Virginia, Mississippi, and Kentucky all have almost 20% of their adult populati…

Being disabled does not preclude you from being employed.

Re: The True Rate of Unemployment

#40

Post by ta2234234242 »

CardenB wrote: post #37
ta2234234242 wrote: post #29

Earlier quoted context omitted.

Sure but not everyone stays in the bottom 25%. College students would be one category that you would expect this to be true of. I was certainly in the poverty level in college, but not anymore. What we really care about are the people who are persistently in poverty and whether or not that number grows or shrinks. If it shrinks the economy is helping real people, if it's not, it's helping the well off.

So you are arguing that there is increasing mobility? Or do you argue that people are bouncing between jobs with lower wage growth and higher wage growth, so the bottom 25% of wages are getting worse and worse, yet they are only temporary? It seems pretty clear that 25% of earners experience no growth or negative growth YoY while 25% of earners see wage growth that outpaces inflation. Unless they are swapping places…

Are you arguing there's not increasing mobility, with this new fangled internet and the series of tubes and what have you? Upward mobility has never been more available across all income brackets.

Again... you want to look at the number of people in poverty. That's the true metric of an economy, not the unemployment number.

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