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Discussion in 'Politics & Current Events' started by mongey, Mar 2, 2016.
Unemployment =/= Prosperity
THANK YOU. This needed to be said clearly.
While we're at it, the rate of job creation is slowing, too, based on the BLS jobs report data. YTD we've averaged 167k jobs a month, below 2018's average of 223k. Overall, Obama's second term saw jobs created at a rate just shy of 210k/mo average, while Trump has been more like 190k. Not radically different and I wouldn't necessarily argue the Trump administration is weaker here based on those two data points, but I think it IS pretty fair to say, based on the data, that for much of his term Trump has seen jobs creation at broadly the same rate as it was during Obama's second term, and that the most recent period is coming in materially below that rate. It's not exactly a flashing red light just yet, but the rate of job creation is something to keep an eye on.
Yeah, I probably wonked it up a little too much, talking about real wages, eh?
Employment is at an all time high... Sure. But how many of those people employed are doing the work they got educated or have the experience to do, and how many are doing work that is not of the level they should be getting just so that they can have a job and income? The blanket term, "Employement" is easily skewed to look better than it actually is. In April of this year unemployment was 5%. On the surface, that's a great number. But factor in underemployment at 13.5%. That's nearly 20% of the workforce not making what they should. 1/5 of the US population. This isn't what I would call a great economy with such a large population having to take jobs that pay less than they deserve in order to make it.
Unemployment among minorities was 0% prior to 1863.
While I don't disagree with your fundamental conclusion, the various "flavors" of unemployment are cumulative, not segmented. What you're referring to is "U-6" unemployment, which is all workers who are unemployed, employed part time for economic reasons but who would prefer to be employed full time, and "marginally attached" workers who are willing to work but have given up looking within the past 12 months, expressed as a percent of the workforce. This is the broadest measure of unemployment, although it does exclude "discouraged workers" who are unemployed and have given up on looking for a job for more than 12 months, so even it too is incomplete (discouraged workers are excluded from workforce, so they're neither part of the numerator nor denominator) Meanwhile, the headline Unemployment rate is U-3, the number of people without a job and actively seeking one, as a percentage of the workforce.
tl;dr - you can't add U-6 and U-3 to determine the number of people not working or working less than they want to, because U-3 is a component of U-6.
I'm also seeing different numbers than you, U-3 of 3.6% and U-6 of 7.0%, but I guess on the flip side neither level reflects the broader definition of "underemployment" where someone with a law degree they'd really love to use is working full time in a retail or other non-professional position while searching for a law degree, for example. Either way the "quality" of employment is lower than it should be, especially given the low absolute level of unemployment.
I just grabbed some quick numbers with a search engine. I don't know all of the definitions of the different types of "Unemployment". Which defining them under one blanket of unemployment seems exceedingly obtuse when trying acquire any sort of understanding or get any transparency on the subject. There's a reason a lot of people don't understand things in this country. We make things intentionally difficult to understand, seemingly to obfuscate the realities of situations. Different conversation though. You're obviously more well read on the subject than I am. Your final statement is exactly my point though. We use the low unemployment number to make it look as though the issue has be resolved, when we have a really shitty patch job happening. Lawyers gotta lawyer or law school debt will crush them.
Another thing I've seen, is that the requirements for getting an entry level position in literally ANYTHING have gotten absurd. Was looking at the requirements for being a Police officer in a couple places recently out of curiosity, and its prohibitive if you're past your mid-20s, because they want to know every time you've ever had contact with a Police Officer. Tickets, detained for questions (including as a witness), etc. I don't want to be a cop, but at 39, if I decided I did, I couldn't tell you every ticket/traffic stop I'd had over the last 23 years. The memes about job searches are apt. Are you no older than 23, have 2 PhDs, 15 years of experience, and 32 on your ACT? Then you qualify for a job as a librarian at the public library with a salary of $15k a year.
And even then (as someone with a doctoral degree), it's difficult for employers to see you as a contributor versus someone that takes up space. In my case, it's also been difficult because I didn't attend "the right" school for full time employment as a professor or lecturer, as well as the fact that many employers have told me I'm overqualified for a job I've selectively applied to. No right answers here unfortunately.
No, you said it fine. Just that the unemployment argument is pointless if the wages and cost of living are out of wack, as you and a few others have explained.
I promise that, as confusing as it seems at a glance, it's extremely useful to be able to segment them out to this degree of granularity, and that the fact we as a country make this level of data publicly available, for free, and that there's no serious concern about the data being manipulated for political aims, is fucking amazing.
That link is worth poking around - FRED is the St. Louis Federal Reserve's online database. I use this all the time at work - I can access a lot of it through a Bloomberg terminal, but honestly it's often easier to get at just here through the web. It also, in the case of the BLS statistics, hotlinks to the actual release.
That's exactly what I mean. People won't hire you because you're too good for a position. But you don't have what the market wants for the position you're qualified for. So even WELL educated and wanting work, you can fall through the cracks and end up on the street.
Oh, no complaint with getting granular and naming things. But calling them all unemployment is opaque at best and at worst a way for them to make it difficult to understand and muddy the waters. I just think more clear distinctions would make things easier to understand for the general populace.
For general purposes, when someone refers to "the unemployment rate," unless they specify otherwise it's essentially going to be U-3, which is people not working but actively seeking divided by total workforce.
There's a lot of important stuff baked into that that's important to keep in mind when interpreting it - the numerator only includes people with 1) no job and 2) actively seeking one, so it ignores people who are part time but want to be full time ("underemployed"), or who have stopped seeking ("discouraged workers"). The latter are also assumed to have dropped out of the workforce, so they're excluded from the denominator, as well (in practice, it's a sizable number of people, but we're in the 800k range last I saw so it doesn't hugelyimpact the size of the workforce). The bigger impact to the denominator is it excludes people who are not interested in working (not merely having given up on looking, but if they were offered a job they wouldn't want it) - people who have retired, who have chosen to stay home with the family, who are in school, who are in prison, who are handicapped or disabled or otherwise unable to work, etc. So, one of the more interesting things to watch in this recovery isn't the unemployment rate itself, but the participation rate, which is the workforce normalized by the working-age population.
It's down somewhat from 2000-ish highs and from the pre-Great Recession levels, and it probably should be down as there's a demographic bubble there thanks to the Baby Boomers where a disproportionate number of the population was prime working age and not potentially able to retire, but one of the real questions economists are trying to answer right now is how much "slack" is still out there in the workforce, meaning how many people uninterested in a job might be persuaded to change their mind and rejoin the workforce if the conditions were right. Or, in other words, how much of job creation is directed to an increasingly small number of unemployed workers where employers have to bid aggresively to hire them (which should push real wages up, and this isn't really happening), versus how much of it is instead pushing up the participation rate by encouraging people to change their miunds and re-enter the workforce. If this is where the preponderance of job growth is occurring, then that could potentially explain the lack of wage growth, and if that's the case then we need to grow the economy faster than we are. Of course, if we try to do that and we're wrong, and it's not labor slack but some other unknown reason keeping jobs down, then overheating the economy, spiking inflation, and eventually causing an economic crash as consumers suddenly get priced out is a very real risk.
I know this is WAY more info than you wanted, but I guess where I'm going with all of this is even fairly seemingly simple concepts like "the unemployment rate" have a lot of assumptions baked into them, and understanding those assumptions is really important when it comes to using those statistics. And there's definitely some odd stuff going on with the unemployment rate, and the traditional inverse relationship between U-3 and wage growth and inflation.
I'm following, and I agree with you. I still think that this is way over the heads and interest levels of the general populace. My point being, that most people hearing all this stuff glaze over. When they hear unemployment, they don't see the nuance, and generally don't care to. They want a stark image they can grasp quickly. So when we get into Trump saying that unemployment is at a 50 year low, what they hear is "All but 3.5% of able bodied people are working".
...and, honestly, presidents should not just be impeached but FUCKING BEHEADED for the treason of lying to the people if they want to use this bogus, tailored "U-3" number as a figure that proves national economic wellness
I dont use reddit at all, but thanks for assuming.
What about the fixation of the democrats on Russian collusion, which has been proven to not have happened yet there are still honest questions about the ukraine situation that Biden seems to be trying to cover up?
Regarding the TPP, the line youre using is more of the propaganda used by the Obama administration to get people on board with it. I can provide PLENTY of links (in Japanese) to prove that the TPP was evil and would have destroyed the entire middle class of japan.
With @MatiasTolkki on this one. The only country to get benefit out of the TPP was the US and even then it was a select group in the US.
You're welcome. "God Emporer" is the preferred way of referring to Trump over in r/TheDonald - if you're not a regular, you know people who are.
Close - it was not proved definitively that collusion did NOT occur, the Mueller report concluded there was a lot of really suspicious things that happened and both sides were taking actions to directly benefit the other, but there was not enough evidence to concretely determine any sort of agreement was in place (noting in doing so that part of the reason for this very well may have been the obstruction that Mueller determined there WAS pretty robust evidence for, and laid out ten instances of probable obstruction). Absence of proof is not proof of absence. It's enough to not get prosecuted, but it doesn't prove the whole thing was a made up witch hunt, either, much as Trump would like it to be. As far as Biden, his son taking a job on the board of a Ukranian firm was probably a bad idea, but the investigation was into tax fraud, not Biden's role in the firm, and Biden was pressuring the Ukranians to reopen the investigation, not close it. If you have a problem with the nepotism of Biden's son using his last name to get a consulting position, well, that's a conversation I'd be happy to have with a Trump supporter.
Again, with the TPP, you're talking about things completely irrelevant to the point that the OP was making, which was the TPP was intended to build a free trade network in China's back door and box them out with their neighbors, which would be vastly preferable to this clusterfuck of a tariff war we got instead.
I agree to a point, but I'd argue it's less U-3 is a bad measure (it isn't - if you used the broadest possible definition, then arguably you could see situations where an improving economy creates unemployment, where say increasingly people feel confident to drop out of the workforce for four years to get an advanced degree, or two-earner households determine they can afford to be one-earner ones, and that metric would paint an inaccurate picture, as well), so much as it's just dangerous to use any single metric to gauge the strength of the economy.
Unemployment is too narrow and too sensitive to how you define it, the stock market is very susceptable to investor confidence and as far as measuring a wealth effect is weighted pretty heavily to the very rich (who tend to have more of their assets in investment markets), GDP is backwards looking and isn't available until well after the close of a quarter... I'm personally biased a little more to looking at things like real wages, retail sales, and business confidence surveys if you need something to track month by month, but even these are very incomplete, and if you want to make an assessment on the health of the economy, you probably want to be looking at a lot of different variables.
tl;dr - economics is complicated.
I guess that's sort of unpacking what I'm trying to say. I think people are attempting to understand it painted with the broadest brush possible, and that leaves them open to being manipulated politically. Economics is incredibly complex. Such that the best minds that have studied it for years, have degrees, and write books on it can't always tell you exactly what is happening. A good friend of mine had a degree in Economics and we used to talk a lot about Macro Economics. Its fascinating stuff. But a quick gauge of the people hearing Trump say that things are going well based on that just aren't seeing the full picture and they aren't going to want to put in the work to get even a layman's grasp of it.
I mean, easy example here, but economics (and capital markets in general) are probably a lot like medicine in that respect, in that they're extremely complex fields that take a lot of engagement to really understand the full nuance of, yet a little knowledge and access to Web MD and suddenly everyone thinks they're an expert and also have cancer. These trading platform television ads always piss me off because the implicit point is that anyone can do it and the ticket to untold riches is simply signing up at the right trading platform. Long term investment is incredibly important, yes, but the 800 pound gorrilla in the room is virtually no one consistently beats the market on a risk-adjusted basis, so if you think you're going to pick stocks better than a room full of analysts at Goldman with Ivy League PhDs and the most powerful and sophisticated computing power at their disposal, you're probably deluding yourself. I'm not exactly losing sleep over it, and thankfully the market has been pretty directional for the last decade, but there's probably a whole lot more people day trading and not really understanding what they're doing than their would be without E-Trade ads, just like all those "ask your doctor about..." ads are funneling people towards drugs they probably don't need, often with messy side-effects.
*gets off soapbox*