>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 that the government is lying about what unemployment _actually_ is. But the feds are publishing all of this data and being transparent about it. Nothing about having some arbitrary cap at salaries below 25,000 make this a “truer” metric.
The Bureau of Labor Statistics literally publishes six different unemployment rates, each of which includes different combinations of unemployed, discouraged people who are not job searching, "marginally attached workers", and people working part time who want to be full time.
Here is the table of 2023 averages by state for each of these six rates:
The "True unemployment rate" from the link is basically U-6, except they use $25k as a cutoff to define marginally attached workers. It isn't immediately obvious how BLS defines marginally attached workers, so that might be different. It's not some government secret!
Yeah, it's just downright misleading to qualify someone working a full time job making $24k/yr as unemployed. The US national minimum wage, believe it or not, only amounts to $15k/yr for full time employment (40 hrs/wk!).
I think you could certainly call these people "poor", but not unemployed. That word means something different.
Sure the term might not be ideal but it serves a purpose. Living in the current US with 24k a year is miserable (more or less depending on location).
When people bring up unemployment in terms of public policy, they generally are discussing actionable problems. Like "the unemployment rate is 6% so the gov should make incentives to hire more people".
These discussions could (ought to) include people that can't afford a car in the non-walkable US, or who have to live with relatives or roommates because affordable housing is a fantasy. "Maybe someone working full time should be able to afford their own place and eat more than rice and ramen"
Someone making 15k a year working 40 hours is functionlly unemployed, in every sense of the phrase imo
> Someone making 15k a year working 40 hours is functionlly unemployed, in every sense of the phrase imo
We have a much better metric for that though, which is the poverty rate.
You can be employed and in poverty and you can be unemployed and not be in poverty. You can even be earning less than a living wage and be out of poverty if you have savings or other financial assistance from family, etc.
Tracking unemployment for what it is makes sense. Muddling the term doesn’t.
> Like "the unemployment rate is 6% so the gov should make incentives to hire more people".
So like, to make those people earning under 24k get a second job?
I don't see how you can use unemployment rate to justify making jobs when it already includes people who have jobs. The two need to be split up so the real number can be used for that argument.
That's earning federal minimum wage. 29 States, including many of the most populous states, have higher minimum wages.
> The CPS does not determine whether workers are covered by the minimum wage provisions of the federal Fair Labor Standards Act (FLSA) or by individual state or local minimum wage laws. The estimates of workers paid at or below the federal minimum wage are based solely on the hourly wage that respondents report (which does not include overtime pay, tips, or commissions). It should be noted that some respondents might round their hourly earnings when answering survey questions. As a result, some workers might be reported as having hourly earnings above or below the federal minimum wage when, in fact, they earn the minimum wage.
> Some workers reported as earning at or below the prevailing federal minimum wage may not in fact be covered by federal or state minimum wage laws because of exclusions and exemptions in the statutes. Thus, the presence of workers with hourly earnings below the federal minimum wage does not necessarily indicate violations of the FLSA or state statutes in cases where such standards apply.
> Estimates of the number of minimum wage workers in this report pertain only to workers who are paid hourly rates. Salaried workers and other workers who are not paid by the hour are excluded, even though some have earnings that, if converted to hourly rates, would be at or below the federal minimum wage. Consequently, the estimates presented in this report likely underestimate the actual number of workers with hourly earnings at or below the minimum wage. BLS does not routinely estimate the hourly earnings of workers not paid by the hour because of data quality concerns associated with constructing such an estimate.
> Several states have established minimum wage rates that exceed the federal level. (Information on state minimum wage laws is available at https://www.dol.gov/agencies/whd/minimum-wage/state.) Users should be cautious about comparing state estimates with CPS estimates in this report because of differing statutory minimum wages. It also should be noted that the CPS sample is based on residence; workers report their earnings on their job, which may not be located in the same state in which they live. In addition, the degree of sampling error may be quite large for some state estimates.
The word is underemployed and for the author's purposes are still job-seekers who quality for government benefits. The practical difference between them and actual unemployed people isn't much when it comes to policy.
Then why are saying they're measuring "unemployment" when they're actually measuring underemployment? Words mean things and they're choosing the wrong words specifically in order to mislead.
Also, tracking poverty is more meaningful than tracking underemployment. There are millions of stay at home parents in this country who would qualify as underemployed, but who aren't in poverty because their spouse or possibly other family member supports them.
No you're not. It means you're removed from both the numerator and the denominator. By no means does it mean you count as employed; that would be silly.
Another way of phrasing this is 23% want a job earning more than 25K per year and are incapable of finding one. I can’t imagine living on 25K per year. While I would technically be “employed” I wouldn’t be happy about it. What is the purpose of measuring employment? I think satisfaction with one’s living circumstances is certainly part of the reason. From that perspective, the measure proposed in TFA makes some sense.
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 obscures the truth of the matter.
I once got downvoted into oblivion on this very website for advocating for a society with 90% unemployment. The stats are just stats but they're not necessarily what we should be chasing.
I believe the goal of humanity should be that pushing a button for food pellets all day long is not a moral imperative or a necessity for survival. 100% unemployment should be the goal, and the end of scarcity that would require its feasibility.
There would still be jobs. People want to eat more than food pellets. People want massages and the robot ones aren’t as good. People will make music, paint paintings, read books, and watch movies.
There may not be money, but there will be some economy for services and non-physical goods.
Social status will always be scarce because it's a zero-sum game; in order for one person to rise another must fall. Even if basic necessities were free the majority of people would choose to work in order to have more than their peers. This is just human nature.
How is social status a zero-sum game? If someone dives into a lake to save a drowning child and people label them a hero, elevating their social standing, whose social standing has declined as a direct result? Likewise for a scientist making a discovery, or an artist creating a masterpiece, or a youtuber becoming a niche internet celebrity, or a neighbor getting a new pool. Social status can be created out of thin air and allotted arbitrarily.
And in a post scarcity world, why would having more than your peers confer social status to any degree, nonetheless enough to justify the various drawbacks of laboring for such possessions?
Social status is not about deciding with whom to allocate your time, and people don't generally choose how they allocate time based on how many hours of labor someone else does nor do most people labor to get other people to allocate more time with them. Indeed, people generally spend time apart from the people they want to allocate their time to in order to labor.
>Indeed, people generally spend time apart from the people they want to allocate their time to in order to labor.
Only because they cannot get everything they need from the people they want to spend time with, so they have to trade outside that group.
This game begins all the way when kids are deciding who to sit next to at lunch in elementary school. It’s a simple fact that time and attention are limited, so there have to be cuts made once demand exceeds supply.
Actually, it might even begin earlier, as I currently have a breastfeeding toddler who is always keeping an eye on who his mom is allocating her time to, and ensures that he is number one…much to the chagrin of his sister and me.
If you were laboring to buy a seat next to someone at lunch, you had a very messed up childhood.
Again, that is not what the term social status refers to, nor is it the goal of most people's labor, nor is it something that would logically be acquired by labor.
Your breastfeeding toddler does not wish to monopolize your partner's time because of her high social status which was elevated by her labor; he wants a secure source of food. Children will probably always want their mothers, but in a post scarcity world no one needs to worry about where their next meal is coming from.
Social status is multi-dimensional, especially in this day and age. I am near the top of the hierarchy for <obscure hobby> in <my town>. I am closer to the bottom for many others.
I disagree that it is human nature. At least not generally speaking.
There are people who are innately competitive. And there are people who don't care.
I'd argue that a lot of people are apparently competitive because of social pressures. You'll have to discount the effects of modern society on people's minds before you could make a claim on what human nature actually is like.
Modern society only exists because pre-modern people were so competitive. While a minority might not care, the majority of people in every society constantly compete for status. Always have, always will.
There are other forms of social status. Under communism people could be nominally wealthy, but party status carried a lot more weight.
However I would note many, many people are not motivated by status. I for one would rather be unknown and my relative status compared to anyone else is about the last thing I will ever concern myself with. I’m not alone, even if the status seekers stand out for all their attention seeking.
If you renamed it "applying some artistic license to motivate the populace" instead of "lying" could we then talk about it without being called cranks?
Anything stated by the government about the economy has an effect on said economy, so it makes sense to massage the metrics. But what makes the government's chosen cutoff truer than another one?
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?
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?
Being on disability - which is what this data shows - precludes you being employed 99% of the time. It also legally limits how much you can be employed.
The rules are complex, but for every $1 you earn you lose roughly $0.50 in benefits, until they quickly reach $0 for even a modest job.
> Fewer than 1 percent of those who were on the federal program for disabled workers at the beginning of 2011 have returned to the workforce since
That's an astounding amount of hair splitting to claim that the people in charge of governing - literally with the title "govern-or" - are not "the government."
I am describing how a democratic republic works. It is government by the people, for the people. There are government representatives, who if elected are partisan, and who are otherwise appointed or employed. The government of a republic is separate from these individuals and has an agenda of its own.
One of those agendas is publishing numerous economic data.
The individuals in service of the government and the media outlets that they talk to are where the proverbial cherry-picking takes place.
Partisan politicians and partisan media, not some incoherent notion of “the government.”
>But the feds are publishing all of this data and being transparent about it.
So?
If you're happy that the feds are "publishing all of this data and being transparent about it", then you should be happy for what the TFA does too (even if you disagree with their conclusion): they use this published data in a way that they think is more insightful.
Should the feds conclusions and choice of criteria be unchallenged just because they publish their data?
>Nothing about having some arbitrary cap at salaries below 25,000 make this a “truer” metric.
The Bureau of Labor Statistics also has all manner of "arbitrary cutoff points".
The number they use is not meant to be magical constant of the universe, it's just supposed to be a more insightful cutoff to understand the real impact of unemployment.
Besides, the main job of government agencies is to make the government and their managers look good.
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 the spectrum just above minimum wage and it's why the official reported Unemployment rates are so low and yet we have one hell of a sluggish economy.
Conclusion:
the low official Unemployment rates are not a reflection of a healthy economy, they are a reflection of decreasing minimum wages.
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.
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).
Are you sure that this chart shows bottom 25% of wages and not the bottom 25% of wage change?
They provide this definition: Wage Growth Tracker is a measure of the nominal wage growth of individuals. It is constructed using microdata from the Current Population Survey (CPS), and is the median percent change in the hourly wage of individuals observed 12 months apart.
Chart 1 plots the time series of the median, along with the mean, and the 75th and 25th percentiles of the individual wage growth distribution
I believe this chart will almost always show little or negative numbers for the bottom 25% of wage growth. By definition.
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.
True metric of an economy is not just poverty rate.
I can have 3x the income of monthly food budget (poverty threshold). What happens when housing per month is also 3x the cost of food per month?
Poverty threshold is a poor indicator of the economic health. Poverty can lower while the ability for the average citizen to support a family continues to drop.
> Are you arguing there's not increasing mobility, with this new fangled internet and the series of tubes and what have you?
That's not an argument. Technological improvements can result in consolidation of capital and rising inequality. Something like that would be indicated by... top 25% of wage earners outpacing inflation while bottom 25% continue to stagnate or fall behind.
EDIT: The last poverty rate publication showed the supplemental poverty rate rising (taking into account more factors that traditional poverty rate). Previous to the pandemic, they were largely correlated. We will have to wait until the 2024 results to see if the inversion holds true.
One way to think of an economy is GDP/stock market/etc. Another way to think of it is: "What is the maximum level of poverty before there's a revolution?" Moving people from the poverty class to the middle class should be a basic goal for any economy -- because it's likely to affect the most citizens.
> That's not an argument.
So if you're in small town Nebraska in 1910/20/30/40/50/60/70/80/90's, it was super hard to learn calculus (one example) unless you enrolled in college and traveled to the university/college, etc. Why? No one else knew it, nor could they teach it.
Back before 2000's era, people were held back, mostly based upon where they were born. In the internet era, you can be a millionaire/billionaire without having to travel to the shit hole that is silicon valley. Amazing!
Edit:
I saw your edit, and yes, you would expect poverty to go up in a down turn economy. But you would also expect it to go down if economic gains are truly affecting everyone, and not just the rich or upper middle class.
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.
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.
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".
No one argued that deflation is better. But it is obviously true that inflation-adjusted minimum wages are much (20%+!) lower than they were a couple years ago.
But that's not even the highest level of inflation in my lifetime. 1980 had 14% (!) inflation. There are probably people in your life that remember the gas lines from the 1970's.
The point I have is when looked from 20 years from now, it will be a blip. It's not the great depression, it's not the gas crisis of the 1970's. It's not even as bad as 2008.
Yes it sucks in the moment, but it won't in a few years when wages catch up finally.
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
You're in good company. When President Nixon was campaigning for reelection in 1972 he told voters that the third derivative of inflation was decreasing.
This is a valuable way of looking at employment in the US. Unfortunately in the current political climate this will probably be immediately weaponized instead of getting the nuanced discussion that it deserves.
The white paper linked on the site suggests they use the same denominator as the BLS, so only people with a job or seeking a job. Given that, I'd assume the numerator doesn't include the categories you mention.
I think it's very reasonable. I knew a lot of people, of all ages, who lived with or were supported by family members, while working part-time and going to school or just having fun being unemployed. I think that those with jobs had a lot more purchasing power with which they could support others.
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.
> 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.
>>Back then one stay-at-home-parent was a lot more normal.
"a lot more" is doing a bunch of heavy lifting there...
I was about 30 back then, and 2 working parents was considered 'normal'. One working parent was considered 'the dream'...
edit: the fact "latch key kids" was basically coined for gen-x kids would seem indicate 2 working parents was common.
sorry - I should have clarified that gen-x kids were a 70s/80s thing, so by the 90s it was even more common.
Its late and I'm going to bed, but a quick search did turn up a bit more concrete data [0], it appears by 1988, 40+% of families were 'dual worker families'. It appears to be about 65% currently[1]. I'm guessing that would put it around 50% of families in the mid/late 1990s, so about a 15% change in ~30 years. I'd say 50+ percent counts as 'pervasive' in both cases.
edit: I guess the point I was trying to make is that both parents having to work is a pretty old trend, with the majority of families needing dual incomes going back decades - and really doesn't seem to be getting any better.
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.
That reddit comment is itself opinionated. The poster says that you don't want to count people who are disabled or who don't want to work.
I'd argue we should count those people. If someone has failed to find a job they want for a long time, they might give up. That reduces the numerator and denominator each by 1, reducing the calculated unemployment rate. Does that make any sense?
18.7% of West Virginians are on disability, so aren't counted as unemployed. Meanwhile only 10.5% of New Jerseyans are. Are West Virginians really almost twice as likely to be physically disabled as their near-neighbors in NJ?
I was thinking of this article when I wrote my comment, but didn't bother to search for it. Thanks for reading my mind and taking the time to find the article!
So many discussions online about unemployment take a framing like this, implying not so subtly that the government is lying about what unemployment _actually_ is. But the feds are publishing all of this data and being transparent about it. Nothing about having some arbitrary cap at salaries below 25,000 make this a “truer” metric.