I know we’ve mentioned this in other threads but its time we devote some discussion on the “alternative unemployment” figure. We hit 13.9% in the US last month. We past the alternate unemployment level of the 1980’s recession (13.5%). With all the cuts hapenning this month, it seems likely we will probably hit 15% before April. It should level off at that point. Atleast for a few months. For those wondering, the Great Depression was at 15.9% around the same time frame but the goverment did nothing for another year which made the rate rocket up to 23.6% by the end of 1932.
Various Alternative unemployment measures has some serious issues with it. That’s why it’s not used very much. The discouraged workers category is a joke.
I agree it has issues but its the closet measure we have to historical figures. The reported 7.6% today isn’t comparable to 7.6% in the 1980s or the 1930s.
Yeah, they keep redefining unemployment so it makes things look better than they are.
And to think that if weren’t for a bipartisan compromise, it would’ve been named “Welfare Royalty” by the Republicans!
why is that flowchart underwater?
Because we are drowning in unemployment and debt?
So what are we suggesting, that people who aren’t looking for a job should get benefits? Because otherwise arguing that we should include them in the unemployment figures is rather pointless. There are many reasons why someone might not be interested in being in the workforce. By that definition then stay at home parents are “unemployed” even though they may have made the choice to stay home.
Underemployed is a different issue, though I’m not sure how you are supposed to factor that in. I’m underemployed at the moment but am still able to get by on that, so even being in that situation doesn’t mean you need help from anyone. And since I had to make sacrifices to make that work, I certainly don’t think it would be fair for others to get some sort of benefit from claiming to be underemployed who didn’t also take a long hard look at what they needed versus what they wanted. When you start talking about “undermployment benefits” you are basically saying that there is a minimum standard of living that we all deserve. That sounds fine until you see things like people using their state issued benefits debit cards to buy video games.
The point isn’t necessarily who deserves benefits, but rather is the statistic meaningful when discussing the general health of the economy. Just because someone’s getting by on part time (which I honestly find amazing, unless they have subsidized housing) doesn’t mean they don’t want to be fully employed or that them being fully employed wouldn’t be better for the economy.
Sure, there’s homemakers that are “unemployed” but there’s also homeless people. If people have chosen to stop looking for work because they are discouraged, that’s not a good sign for the economy. If anything, your argument is that we should distinguish between homemakers and part time workers by choice and other unemployed persons, not that we shouldn’t count discouraged workers in our statistics.
Sure, but using people who aren’t actively looking for a job when there are jobs available is also misleading. Right now your arguments make a lot more sense then say five years ago. At that point most people who were “unemployed” either weren’t trying or weren’t willing to do what was available, because there were jobs out there or weren’t willing to go someplace where jobs are. And that was a time when the official rate that you say is misleading was almost half that of what it is right now. Why do you think so many immigrants keep coming here for work? Their standard of living expectations are not the same as ours and they find a way to make things work, even if it means they don’t have cable, don’t have their own apartments, don’t own a car for every adult in the family, have to make most of their food at home, etc. The problem is that by including people who don’t care to find a job (homemakers) or who don’t have realistic expectations of what they can find you are making things look worse then they are.
And it’s not that hard to get by on part time. I’m doing it by renting a room in a house rather than having my own place. I don’t have a mortgage, car payment (car’s paid off), etc. Not all of what I’m doing is possible for everyone, of course, but when you don’t have an ideal job it’s time to consider all your options, even those that you hate to have to consider. That might mean moving in with someone else, making more meals at home, cutting down on entertainment expenses, etc. And I can still afford a new game every month or so.
Perhaps. But by not including people who wish to work but cannot find jobs, regardless of whether they technically need them, you are making things look better than they actually are. Unemployment is not a raw indicator of poverty. It’s an indicator of the health of the job market.
Yeah but what does simply looking at how many workers you could potentially have compared to how many you actually have tell you about the health of the job market? Even if your economy is going gangbusters and is producing tons of excellent jobs, you will still have some people who, for whatever reason, aren’t working. Is that unemployment in a real sense? Technically it is, but when we talk about unemployment in general we are talking about people who want jobs not having them. The key there being “people who want jobs.” Then the question is how do you define those people when some of them are acting in ways that don’t show any real committment to having a job regardless of their claim to want one.
Let’s look at an example. Say you have someone living in the rural midwest. There aren’t many jobs in their area and the ones that are start a minimum wage. They don’t want to leave their area and they don’t want to take a minimum wage job because they get by better on various forms of assistance and family help then if they worked full-time. Are they really unemployed? Technically, but they are also choosing not to pursue all their options, so as an indicator of the overall health of the economy we aren’t really understanding much if they are statistically counted as “unemployed.”
During the Great Depression and other major economic downturns people moved to find work. That’s a textbook example of someone who wants to find a job.
Well, yeah, I agree. But it’s a tricky area. It’s not as easy to just move as you seem to suggest. Many of these people own homes, and selling/buying is not a great option right now, obviously. Deciding to up and move in this economy is not so easy. In the Depression, many people did not move, too. Today, many people have moved for jobs. I don’t think it’s as radically different as you suggest, except that we do have unemployment today, which allows people to subsist.
Surely we could find a way to determine how many of these people really would want a job if they could find one. Note that if they could technically find a job, but not a good one for them, they would still be underemployed, which still makes this chart. I mean I have problems with the chart too. It’s not perfect, that’s for sure. But it does seem to give a better indicator than the raw unemployment rate.
But this “unofficial” rate can be used on any yearly figure, not just this one. If we assume the real rate is 2.5 times the official rate, then the real unemployment figure a few years ago, when the economy was relatively booming, was actually 12.5%. And in fact, the same SGS stats that gave us 17.5% now, were claiming exactly that back in 2005: “an unemployment rate closer to 12-percent than five-percent.”. So boom time America had more than 50% worse unemployment than the first year after the great depression started, according to these figures.
Something not right here.
The difference is unemployment insurance, social security, and various welfare programs. A higher unemployment rate may have a lesser effect on the economy when there’s government to help pick up the slack. If the government wasn’t there, all these unemployed people (disability or otherwise) would have very little money to spend or would be on the street starting shanty towns.
Edit: The other problem is to just assume the real unemployment rate multiplier is always 2.5. That multiplier is likely pretty volatile based on economic conditions. Remember, full employment is considered a 4-5% unemployment rate. So we’re talking about a few percentage point change having a pretty big impact on the economy. So it all really matters where you start measuring, I’m sure it’s not all linear.
And part of the problem of constantly changing the way we measure it makes for good misinformation. Mark Levin goes on and on about how our numbers aren’t as bad as 1982 (or at least did), yet he’s not making an honest comparison because we’ve changed the way we measure unemployment.
Fixed.
It’s just pointing out that you can’t do an apples-to-apples comparision of the current unemployment rate with, say, the great depression, because the definition has changed. That this in retrospect makes recent boom years worse doesn’t mean they weren’t boom years, just that post-1970s booms haven’t been as hot shit as the ones before that.
For example, the employment-population ratio of today can’t be compared directly with what it was back then, as women worked far less. If you look at the near-vertical recent drop, however, it tells you something - the 1993 and 2000 downturns weren’t this bad.
Well, I don’t think anyone here is arguing that. This is at least the worst economic crisis since the late 70s/early 80s.
You’re right on the money with your comment about women entering the workforce, but you’ve completely misunderestimated the recent booms. The tech revolution of the 90s took a large, relatively stable economy and massively increased it. The earlier booms were working with a much smaller economy. Also, labor productivity massively increased as a result of the tech boom.
edit: gah, that graph sucked, getting a good one.
editx2: googling anything involving labor is an exercise in futility =/