Standard econ neither classical or Keynesian has a good explanation for this but they still denounce MMT which does!
2
This is a statistical con game for all the reasons people are stating here. There are so many people not being counted and who may finally be getting employment in low wage jobs with little or no benefits and frequently without needed healthcare coverage. I also cringe when people claim the economy is doing better under Trump than Obama /Biden because unemployment numbers are at historic lows. When Obama took office unemployment topped at 10% and he handed Trump unemployment at 4.7 %--a 53% decrease!. Since 2017 under Trump, it went down from 4.7 to 3.6 -- an 11% decrease more and so how is that is better than 53% decrease? The media has just as short a memory as the public and do a disservice by lying that the economy is doing better under Trump--these graphs and other data show the economy did better under Obama/Biden than Trump!
Another blurb on how great the economy has become, and how much greater it could be, without a single mention of the huge deficit the US government is currently running. It may not matter in the immediate future, but it will eventually matter.
Keep kicking that can down the road, and you eventually run out of road.
1
"Facts all come with points of view..." Talking Heads
If we look at how more and more 'employed workers' are forced to live day by day, hugging the lines of poverty, we'd get a more accurate POV inasmuch as it would reflect the majority of Americans.
Considering that if there were an actual full employment of the 25-54 year olds we would be at negative 10% unemployment, and the paltry number of living wage jobs, these statistic seem as if they were conjured by the current White House.
Unfortunately these 'labor statistics' are always being finagled by the White House.
1
Wait 'til AI and robotics break out of the manufacturing sector and fully take hold across the economy. They will decimate low-paying manual and gig jobs the way they've decimated manufacturing jobs. The vast majority of low-paying manual and gig jobs can be done by robots; things like, stacking shelves, mowing lawns, retail cash register/checkout, janitorial, transport of virtually all descriptions (Uber/Lyft/local delivery driving/long-haul trucking).
The local supermarket now has a robot patrolling the isles. The first time it rolled by it was like the first time someone in the early 1900's saw a car go by. It was a weird experience but a harbinger of vast, unimaginable changes to come.
The sad thing is that there's enough wealth to go around. The increased productivity provided by computers and automation increased company profits by a huge amount. Why not share those profits with workers?
The Walton family is worth over $180 BILLION. The fortunes of 6 people are growing faster than they can EVER spend it. The dividends they collect from Walmart stock have increased dramatically over the past decade. Worker wages at Walmart have not. Many are ket on part-time status so the company does not have to pay benefits. Walmart provides its workers with information on how to apply for food stamps.
A few hundred people are worth more than the rest of the US population combined. Those people earn a significant amount of their income collecting dividends on stocks. Dividends are increased by reducing costs - meaning cutting employee counts and wages. The wealthy get wealthier by cutting wages and reducing head counts.
An inheritance tax - and limits on tax-exempt foundations - would go a long way to ending the situation we see.
Wow! Trump took us from 9.9% unemployment to 3.7% as he engineered the "strongest US economy ever".
What if the rich paid the poor without work? Why is working required? I think it's dumb
Mainstream economics tells us that all three of the following factors should have driven up inflation:
Low unemployment
Low interest rates
An enormous influx of money from the FED in 2009 - 2010 to the banking system.
What did the economists get wrong?
In https://www.stlouisfed.org/on-the-economy/2014/september/what-does-money-velocity-tell-us-about-low-inflation-in-the-us the authors show that the velocity of money has plunged since 2008, and this is responsible for the persistently low inflation. The velocity of a dollar is how frequently it changes hands in domestic commerce, or how useful it is.
The authors say the reason for the fall in velocity is that people are hoarding money for various reasons. I think the reason is wealth inequality. It is a fact that the Rich spend a smaller portion of their wealth in domestic commerce than those who are not rich. They use a much greater portion in financial speculation. The huge rise in the stock market is just one manifestation of this. In fact, historically there is a correlation between inequality & financial speculation that goes back many decades. Money chasing itself in financial speculation has a low velocity since it is not being used in domestic commerce at all. The concentration of wealth has been rising since about 1980 while the velocity of money has fallen.
High velocity money tends to raise prices, but is also tends to increase demand which then tends to increase production which tends to lower prices.
3
@Len Charlap I think that's a good observation and evaluation. You don't hear much about velocity of money outside of a macro-econ classroom.
1
Many commenters have already noted that the unemployment rate is practically meaningless as an indicator of the health of the economy.
Here are some stats that aren't meaningless:
- 42% of U.S. workers earn less than $15 per hour.
- 5 years from now, 30% of U.S. renters will spend half of their income on rent.
- The bottom 90% of households have only 22.8% of the wealth in the U.S. today.
- At the current pace, the top 10% will have all the wealth in the U.S. 33 years from now.
I would like to thank God, my family, and the University of Houston system. The great adversary was met and conquered during that period. Great to be on the other side of it.
So, under the Trump administration, the unemployment rate has declined a little over 1%.
Got it.
1
I get so tired of hearing about our so-called "great economy."
If the economy is so great, then why are millions of homeless people living on the streets of American cities and towns?
And why are so many people under-employed or juggling several gigs without health insurance?
We are being sold a bill of goods about our so called "great economy." This economy is only good for the wealthy and the super wealthy.
1
I worked in a Fortune 100 co where any gains went to the top 3 execs via stock options, while the rest of us were continually asked to do more and more for less and less, w no bonuses or salary increases, and the continual threat of job cuts, which of course Wall Street rewarded, further boosting earnings for the top 3. It was like a bad game of musical chairs...
So this doesn't confuse me at all... The low unemployment and low inflation stats tell the darker story of rising inequality and the capture of our economy by the .001%. With stagnant of falling wages for everyone else, rising costs in key areas like housing, health care and education, and over-employment for many, often being forced to take on extra jobs, to bridge the ever-widening chasm between the rich and everyone else...
It's not sustainable...
2
Too bad the jobs don't pay a living wage.
1
I got so excited about this article, that I ran to all my grown children's bedrooms to give them the news, but they were all away at work.
3
Employment rates without wage data is highly misleading. To use a macabre example, it's reminiscent of Vietnam-era generals toting up the number of enemy soldiers KIA (the infamous body counts) without mentioning American battle deaths.
As so many commenters have pointed out, there are job openings galore, but few are full-time, hardly any offer health care benefits, vacation or other job-related benefits, and are mostly fast food or gig economy positions.
Which is why jobs reports have not been greeted with hallelulyas ringing across the land.
1
I would like to know how many of these employed people are working more than one job. How many are working those jobs not by choice but because they can't find a 40 hr per week job and/or they can't make ends meet with a single 40 hr per week job. Without that information the unemployment rate has ceased to be a useful metric
The same is true for number of jobs created. If 20K jobs are created and 18K of them are at Walmart are those good numbers? I would say no. Jobs that don't pay a living wage should be excluded from the "jobs created" number.
1
The college where I work was ranked a "Great Place to Work" for the tenth time this year.
Of course, they only ask full time employees, so very few of the professors hired in the past ten years were asked to rate their workplace. For the past three years virtually none of the professord hired to teach receive a fulltime job with benefits. So it's a great place to push a pencil or a mop, but the teachers all have two jobs.
The national employment rate is a sham.
6
These charts are a joke. It takes more time to understand them than it would to read a text composed of just one or two sentences. Please don't overdo it with the unnecessary data science.
1
This follows many corporate crony capitalists who have pre-defined ranges of the salaries they want to pay. Rather than letting the markets define the compensation based on supply and demand.
On one hand, these crony capitalists can't handle a free market to acquire strong talent. On the other hand, they argue the free market is the center of a strong economy.
Unfortunately, this important article indicates these crony capitalists have gotten to those at the top of the Federal Reserve!
3
@Concerned American
The Federal Reserve Bank was created by the top bankers in NY and has been staffed by them since its creation. The Fed is privately owned by member banks and always has been.
The story is long and convoluted but does much to explain who serves who and why. Jefferson predicted all that is coming to pass.
"If the American people ever allow private banks to control the issue of their currency, first by inflation, then by deflation, the banks and corporations that will grow up around [the banks] will deprive the people of all property until their children wake-up homeless on the continent their fathers conquered." - Thomas Jefferson
2
One thing to mention here. While wages are rising slowly benefits are not. Medical costs to employers have risen a lot faster than inflation. When benefits like FMLA are added they have real costs to employers. There’s a lot more to the cost of an employee than wages.
2
Why, when most of us must work long past the age of 54, is the prime age considered to lie between the ages of 25 to 54?
Why hasn't the way we count work hours changed to reflect what has been going on with the job market for the last 30 years?
Why do our officials refuse to understand that the employment rate does not tell or encompass the full story of what is happening to many adult Americans from the ages of 18 onwards?
I ask these questions because I was downsized from a good job three months shy of my 55th birthday. It's been nearly 6.5 years and finding a job has been harder than surviving being beaten by my parents on a regular basis. Two jobs ended because the funding ran out. Another was a temp job that took me 15 months to find and lasted only 5 months. I just got very lucky and found a decent job. There are too many Americans of all ages who are living through this type of horror. Too often they wind up in debt trying to survive on less than nothing. Then they are penalized during the background checks.
Our country's employers have contributed to the creation of a large group of unemployable people based upon age, experience, indebtedness, health status, etc. Therefore what we're seeing here is not reflective of what is actually happening in America.
4
@hen3ry
Soylent Green was set in 2022
I wonder how long it ill be before the state opens voluntary 'Death Centers' because it sure seems like our government is doing all it can to put an 'expiration date' on people.
We've been seeing countless neighbors laid off just as they reached what should have been peak earnings years. They're out of work for 2,3,4,5 or more years. IF they find job it pays half of what their old job paid. And this is happening just as people's children are starting college - and before most have pid off their mortgage.
1
Fed says High Wages=Inflation or indicator of it. When it happens Fed says it is time for it to clamp down by raising interest rates. So much for the 99%, they will NEVER get a raise! And they haven't for the last 3 decades.
Meanwhile the 1% are enjoying their investment returns of around 20% based on corporate profits PER YEAR, EVERY YEAR.
In addition, they get to use their money to bribe Republicans and some democrats to cut taxes and change inheritance laws so they could keep their hoard in perpetuity. Money out of circulation guaranteed a contrived smoke and mirrors numbers, using the multi trillion dollar tax payer fund secretly stashed by congress during the 2009 bailout to enable that.
It seems to explain the workings of the US Economy for that last 40 years.
Hey 99% keep peddling the wheel or you will drown.
2
Was the "pre-holiday" hiring that usually disappears in February taken into account???
1
So much needless suffering. Resign.
1
Notice how the graph gradually and steadily declines, beginning in at least 2010, all the way through Obama's presidency and steadily into Trump's?
Trump inherited this economy. Plain and simple. Let that fact drive him absolutely bonkers.
2
What would be better...low unemployment and high inflation? While the news wrings its hands about robots taking skilled labor jobs, they say nothing about enterprise software eliminating millions of middle management jobs.
The workforce changes are and will be seismic and no one knows where this is going. No one.
2
@RonRich
The pattern has been established.
Our current version of Capitalism has been freed from former national constraints. Global corporations are free to search anywhere in the world for the cheapest possible labor costs.
The have done so with manufacturing and assembly - so called 'blue collar' jobs have been cut to a minimal level in this country. Now 'white collar' jobs are being shipped overseas on a wholesale basis - data processing has been followed by accounting functions. Many mid level positions have been replaced by computer algorithms, Not many people doing currency trading anymore.
The problem that corporations fail to see is that by using cheaper and cheaper labor, those that are employed do not have funds to 'consume'. In time it matters little how inexpensive things are because nobody but the very few at the top of the income pyramid can afford to purchase anything.
Sir James Goldsmith predicted all thins in 1994 during an interview with Charlie Rose just before GATT was passed.
3
Trump's economy booms while more people go hungry, lose health coverage, are in deeper debt, have to work multiple jobs.
In today's America, why work one job to live comfortably when trump offers three poorly paid jobs just to barely make ends meet while staying in debt for life? Indeed, working additional poor paying jobs are needed to pay the taxes the wealthy elites evade paying.
The answer to the yesterday's opinion piece "How to Get Americans to Love Capitalism Again" is simple. Pay workers a livable wage that allows them to pay for their own food, shelter, education, health care and, oh yes, taxes without going broke or requiring government help. Watch taxes actually drop! Problem is the wealthy are wealthy because they reap the most benefit from cutting wages and letting others pay for and pick up the pieces - like tax payers and the government.
It's a Republican trump world now.
2
I just re-read the opinion piece referenced in my previous comment by Henry Paulson Jr. and Erskine Bowles entitled "How to Get Americans to Love Capitalism Again" - https://nyti.ms/2PyWXPf
I'm surprised there wasn't a comment tab to respond to the many flaws in their reasoning and rehashing of what got us to the current predicament. Short on characters left, I can address only their first solution:
"First, we must aggressively invest in our human capital." Why? So the highly educated experts in their field can be so poorly paid they need food stamps, subsidized housing, Medicaid to go along with their lifelong college debt?
"provide more students the option to obtain a high-quality education" for a poor quality paycheck.
"This ensures that more American workers have the skills they need to compete in a global economy." Really? The skills set are essentially equivalent overseas and the educational cost to get those same skills is a lot cheaper. So the real race, then, is to the bottom of the pay scale, not a race towards perfected skills that put you in lifelong debt to get.
"investing in education will increase economic productivity, which will help drive the wage growth needed to reduce income inequality." How naive! Or just misleading? Any increase in productivity goes strictly to those at the top! What wage growth? Productivity increased as all wage increases were skimmed off for the rich.
Plentiful poorly paid jobs restrains inflation enriching the wealthy further.
3
Boomer ruminations:
The good news is that you're alive.
The bad news is that you're broke.
Or!
The good news is that you're flush.
The bad news is that you're dead.
Take your pick!
1
Drop the H-1B numbers to 2,000 per year, double their minimum salary, and require that no country account for more than fifteen percent of the visas. Presently there are over half a million H-1B’s in our country, over eighty percent of whom come from India, and whose minimum salary is $60k. They are not geniuses, they are not diverse, they possess no unique skills, and they are brought in solely to drive out American citizens working in high tech and drive down salaries of those American citizens remaining in the field.
H-1B visa holders did not put a rover on Mars: American citizens did.
1
I wonder how they come up with their data? When they count the numbers of unemployed, do they go tent to tent?
4
By the way we are headed to a world of oligopolies.
Cell phones , Apple, Samsung , and Google
Social media - Facebook and Instagram control 95%
Amazon and Walmart are decimating competition.
Bezos worth $135 billion and Walmart grandchildren $200 billion.
Microsoft , Oracle, and Amazon the cloud.
They will all cannibalize the competition that they will start promoting oligopolies and monopoly control.
We are nearing the end phase of real competition.
3
@Ralph Petrillo
And how do allow one individual to have even $1B? What on Earth will they do with it?
Mr. Bezos can singlehandedly finance the nations infrastructure projects and STILL have plenty left over for a fabulous life.
There should be no billionaires.
2
@caljn
Have to agree but are current situation is worse. Amazon can see profitable and popular businesses and then simply compete with them without a profit. Look at all the empty stores . It is the Amazon effect. Apple uses slave labor through contractors in China and just raises their dividend. The world is dominated by a new group of organized hi tech companies that do not necessarily believe in individual freedoms if it is a threat to their power and profit.
2
@caljn
The problem is inherited wealth and private foundations where the wealthy control how fortunes are spent while avoiding taxes.
Those that inherit fortunes are obsessed with not just preserving but expanding their wealth - not having a clue how hard the rest of the world has to work to earn a fraction of what they were given.
I think we need a new definition of "employment". A person working 30 hours a week for $10.00 an hour and no benefits, may be class as employed, but cannot survive on what he makes for his family. This new economy bursting is filled with those jobs. I think this is a negative trend and a pointless "positive" statistic. American workers are truly becoming wage slaves. They have no options. Without health insurance, paid time off for child rearing, and no vacations, America has been reduced to a working man or woman's hell.
4
What a bunch of clueless bunch charlatans and fools. Yet they continue to feel free to make far-reaching public policy, one that affects all our lives -- and those of people around the world -- with nary an apology nor an iota of humility.
Is it any wonder that people are sick and tired of, almost contemptuous towards, these "experts"?
3
@Whatever
You have to understand WHO they are working for. hint: It is NOT the American people.
The Federal Reserve is a PRIVATE corporation owned by PRIVATE banks. That's why the Fed took care of the financial industry and banks during the financial crisis.
People forget that most of mankind toiled in poverty or slavery throughout most of history. The concept of individual rights and freedom existed for only a few centuries. The wealthy are focused on restoring the old system and increasing their wealth even more. They no longer need lots of people to staff their armies and grow the food to feed those armies. We are 'useless eaters' in this new world.
If you don't think a few can control the fates off many read about Cecil Rhodes.
1
What idiotic framing of an article, with flat wages, worsening benefits and part-time and worthless "gig economy" labor counting towards these statistics. Times, you're complicit in the shell game corporations and the Fed have played on America.
2
When will the Times stop reporting such biased, status quo stories about employment and unemployment?
Are the preponderance of commenters who share experiences so glaringly in contradiction to this article--and so many like it we see here so regularly--truly living somewhere on another planet?
2
DUH.......
Government statistics are bogus and have been since the late 70's.
Unemployment, CPI and GDP have all been HIGHLY manipulated.'
This is NOT hard to see. Alternate numbers exist on other sites like shadowstats.com
Unemployment has been over 20% since 2009.
Constantly touting positive statistics is part of a strategy titled 'MOPE' - management fo perception economics. Repeat something often enough and maybe people will believe it.
1
The Fed has not 'misunderstood' the labor market. Everyone involved - our government and the Fed (which is NOT part of our government) - has been lying like mad about these numbers.
They have been fudged and altered to make things look better than they are - to the point where official numbers do not reflect reality.
The NYT and other media sources have been complicit in this charade by touting 'great' numbers without any questioning.
Plenty of other people have had this figured out for years.
1
US politicians have been leaders in spurring changes in the definition and calculation of their economic statistics to improve the picture. You don't count your unemployed correctly and your inflation rate is biased downwards. The labor participation drop alone is probably responsible for up to a 3% fictitious drop in the unemployment rate since the end of 2009 so that the real number is more around 6%+.
As for inflation, it's no secret that Greenspan & al made major changes in calculating the rate in the mid 1990s. The CPI is no longer a fixed weighted index and that has opened up a door to massive abuse in the its calculation, including (but not limited to) substitution (chicken vs beef kind of thing), frequent changes in weightings, and "quality adjustments" which inexplicably always seem to yield lower adjusted prices. Regardless of the statistical (definitional) validity of these calculations, the overall result has been to make the official inflation statistics less and less related to the experience of ordinary folks.
The writers of this article should have covered that angle better. We're nowhere near full employment and inflation is not nearly as low as advertised. The loss of faith should be with the numbers we're being presented with.
1
Full employment at minimum wage.
2
One only needs to read the comment section here to see what the true state of the economy is. Far too many jobs do not pay enough money to provide a basic, decent standard of living.
3
Jobs that don't gross over $45,000 / year should not be counted at all, except maybe in flyover states where you can still buy a house for under 300,000 dollars. Humans are a ridiculous species—we need help being fed for the first 21 years of life and the last 21 years of life…possibly even more years, as it's easy to see that everyone is effectively blackballed from productive employment once hair turns grey (now we're talking about potentially four decades at the end where you will spend more than you can earn). Massive redistribution of wealth through progressive taxation and traditional, all-American safety net programs are the only way to make those years work.
1
"If joblessness falls too low for too long, it could speed up wage and price growth. As a result, the Fed has typically lifted rates as the labor market heated to prevent things from getting out of control."
Now doesn't that sound like a piece of capitalistic nonsense and corruption! We don't want wages too get too high right! Too much "heat" in the labor market might mess up the billionaires, the 1 percenters ewho are rolling in money! You know, give those ordinary workers too much cash and they will just have a ball and might invade one of your 6 homes!
Capitalism is a failure and its about time we admit it.
3
The jobs that are offered offer a miserly, hourly wage and certainly no health benefits. It’s all smoke & mirrors
2
"Consider prime-age men, those from the ages of 25 to 54. These men are generally well past their schooling and well before their retirement. Yet this group has also been exiting the labor force. In 1950, only 4 percent of prime-age men were not working or looking for work. Today, that figure is 11 percent."
https://www.nytimes.com/2018/06/15/business/men-unemployment-jobs.html
1
The Federal Reserve almost seems like they now obey Trump. Let’s go over the facts. We have annual
deficits of over one trillion. Interest rates are extremely low with the unemployment rate at 3.5%.
If the stock market goes down, don’t worry Trump will yell at them and they will shiver and lower rates. We need new leadership at the Fed for they seem almost moronic. Retired individuals hardly get any return on their bonds. The Fed is so poorly run that I would not be surprised in a few years that information will come out that they disclosed information with Reoubkucan insiders. Will the Fed care next year for the deficit is $1.5 trillion. They seem clueless.
2
@Ralph Petrillo
Do not believe that the Fed follows the dictates of any politician. The Fed is a PRIVATELY owned corporation - owned by private banks that serves its owner's needs. The Republican Party panders to those same banks and financial institutions but don't confuse who serves who.
Low(er) wage crummy part time and gig jobs with no benefits and security. Yay.
2
somebody, please resurrect Paul Volcker, post haste.
thank you.
2
I read yesterday that some owner of a real estate firm in the USA gave his staff Christmas bonuses based on how long they had been with the firm and the average payment was $50,000! (Might have been some place called Maryland) Then on the other side of Santa will be the Christmas Grinch who only pays his workers a measly $5 an hour and no bonus.
2
OOW (Out Of Work) for almost 4 years. Seek employment thru Multiple networks, Professional Recruiters, Got multiple FTF (face to face) interviews, but no offers because they tried to save $$$ by hired an internal employee who works there.
I am a professional who is seeking work with any employer who is willing to offer me a job to support my family of 4.
My friends who attended every week at MSFT, Meetup, job fairs. We cannot find work!
So please let me the truth about the rate of unemployment is low. That is the liar!
1
In my economic training some years ago we were taught that frictional unemployment, that is, the rate of unemployment that allowed for natural job changing and hiring times, was 3 - 4%. All those who were proclaiming full employment at (much) higher rates were self-aggrandizing, acting the ultimate experts to get headlines. Facts be dammed.
1
And all it took was a self-interested Republican president to convince these fools of what they should have known all along.
Economies are complex organisms. On the surface, ours looks presently strong.
These numbers ironically point to one or Rumps early arguments in the Obama administration. The unemployment numbers were not as accurate as we thought, too many people left the labor market. they are trickling back in, this explains the growing jobs numbers but little movement in the historic downward shift in unemployment.
But other numbers should have use concerned.
the "trump boom" has been led by consumer spending, not his trickle down tax cuts.
Debt from consumers, businesses and government are way up.
Wages are rising lowly because of wage pressures, but too much of the money generated in new growth is going to the top 3%
Infrastructure development is nowhere, and degrading fast.
education is behind what the economy needs as far as "modern adaptable workers"
Climate change is being ignored and it WILL effect all areas of the economy.
And of course our deficit is growing like a cancer.
In 1929 people were praising a permanent prosperity.
What stupid creatures we are
1
A different perspective: I’ve owned a small business for the last ten years and we’ve never had a harder time getting folks hired than in the last year. No experience or formal education necessary. We offer paid training. Full time work. Work outside in a beautiful state. Tips. Room for advancement.
It’s been a struggle to maintain what little staff we have. If my employees make any more $$ than they need to pay the bills, they ask for time off. Hardly anyone will work a full five days in a row. Ghosting interviews. Ghosting the first day of work.
The most stressful part of my job? Hiring and keeping good people!
Wow; how do we combine record unemployment with record inequality?
For starters: the gig economy, minimum wage real decline in purchasing power, legally crippled unions, unbridled monopolies/duopolies.
And a political class that represents rich corporate, and human persons, "creates" corporate intellectual property from government-funded research, and uses draconian law enforcement against the poor and minorities.
When corporations steal billions the SEC fines them and they must promise to stop while neither admitting or denying wrong-doing.
Rob a 7-11 and do hard time.
3
All low paying jobs like being an uber driver with no health care benefits does not make a strong economy. That is why interest rates were lowered, the economy is weak.
3
The quoted employment rate is inaccurate. It needs a new definition that corresponds to current reality.
2
It's all smoke and mirrors.
I haven't worked since 2008, age 57. Auto worker.
But did work nearly continuously from 1967 and thank everyone for Social Security and Medicare. Lost my pension in a non-union shop.
I just reviewed all unemployment since 1929. WWII was below 2%. 1969 was 3.5% and was paid $1.40.
Pay is too low for most jobs where I live.
Recession is coming, I can smell it. Smells like fear...
2
We now have overemployment. If good jobs were available for many, there'd be more people either staying home looking after the kids, or furthering their education, or just spending more time between jobs looking for the best opportunity. I wonder if a lot of people have the financial security to pursue such options lately.
2
We now have overemployment. If good jobs were available for many, there'd be more people either staying home looking after the kids, or furthering their education, or just spending more time between jobs looking for the best opportunity. I wonder if a lot of people have the financial security to pursue such options lately.
Per CBO, about half the prime aged (25-54) men not working men is due to illness or disability; for women it’s caregiving. We can increase growth and employment by addressing these causes, via affordable healthcare and daycare.
The relationships of unemployment to inflation or wage growth (aka the Phillips Curve) now requires consideration of a third factor, which is the share of prime-aged (25 to 54) workers employed. That number was taken as a given in the old models, but declined post-crisis.
Wage growth can be more accurately predicted substituting (1-prime aged employment rate), the New Phillips Curve.
1
I'm a 45 year old white male and I cannot find anything viable to do for a living. Sure, I can pull together a part-time thing in my field, the best offer so far being $15 a hour, 24 hours a week with absolutely no benefits, or I can move out of state and try my luck, but I have not been able to find a "normal", full time job in over 5 years. Luckily, I was successful early in my career (the 1990s), parlayed that money into tech stocks and real estate at just the right time (pure luck) and have enough capital to live on. I have literally no idea how Millennials or anyone else is making it on these kind of jobs. Meanwhile, the top 0.01% have doubled and tripled their net worth since '09. It's enough to make you want to riot.
4
Yes, unemployment is low, if you count all the underemployed, part-time and gig workers. Yes, inflation is low, if you don't count health care and housing. Wages are stagnant, and the cost of living is going up. Yet we are supposed to be happy with this "recovery" because a flawed model of employment says the labor market is great, and a flawed model of inflation says it is low.
3
Once you stop counting prisoners and soldiers and people who don’t look for work because of age, disability, or addiction, you probably are ignoring over 15% of the able-bodied population. That is before looking at people who are working more than one job or cash workers. But more critical is wage stagnation and the growing rift between the super-rich and everybody else.
1
It’s not about the # of jobs,it’s the quality of the jobs. How many people are working “gigs” without benefits or unemployment insurance? How can they track unemployment IF the nature of work is changing and there s a growing % of workforce that would never qualify for unemployment. ALSO, it’s not the # of jobs but the quality of them. How many adults are working retail jobs that were previously mainly filled by college student. They want to show employment growth, they need to show 3 separate points of data that support it. How is HH income growth tracking over past 10 years?
Consumer debt/savings for same time frame??
2
When Trump took over, the unemployment rate 4.3. As of last month, it is 3.6. The difference is less than a point and it is logical to think that this small reduction is due to the inertia of movement of the market. The reason why there has not been greater inflation and wage increase is that there continues to be a large number of unemployed still seeking work, preventing therefore labor shortage. It is interesting that the one sector in which labor shortage has resulted in wage increase is in the restaurant industry where one can see an appreciable increase in wages. Stores are now offering hourly rates around $11, above the $8.21 for people 25 years and over. In general, there seems to be enough work to keep people from complaining but not enough to solve their problems.
1
I graduated in December 2017 with a BA in Economics from a state school and had +5 years of experience in customer service. I spent 12 full months interviewing but was never hired. I felt like my only options after a year were to apply at my local Walmart OR go back to school. I was recently accepted to another public university and it's computer science program and start this January.
This labor market is not for the workers. There are far too few jobs with promise and too many employers cutting back for the sake of short-term gains.
4
@Notadog
I hope you're not getting in debt for another degree. And adding a degree may make you more 'overqualified' Comp Sci isn't the guarantee it used to be.
Frankly you'd be better off going to 2 year tech school and becoming an HVAC tech, electrician or plumber. Even auto mechanics do pretty well.
The way our world is going, becoming a blacksmith might be a good career move.
3
The NYT should look at labor force participation numbers as well.
We have a low labor force participation rate - which should be a red flag. Numbers are particularly bad for young adults.
But look at long term numbers and ask why our economy was so robust back in the early 60's with a participation rate far lower than now. We transitioned into a two income economy where families NEEDED two incomes as wages fell farther and farther behind inflation even though productivity INCREASED. Increased profits were NOT shared with workers.
Going through the comments it is clear that MOPE - management of perspective economics - does work in influencing people's attitudes even if it does nothing to improve the economy. An amazing number of people accept government statistics at face value without any questioning.
2
The Fed was not incompetent.
The definition of full employment as the lowest level compatible with (something like) price stability makes the number float around as workers are more or less aggressive in seeking wage increases, and indirectly, the rate of inflation. A range of 5% down to 3.5%, as in the article, is quite reasonable.
Unemployment is related to wage changes by the Phillips Curve: the more unemployment, the more docile the workers. The less unemployment, the feistier.
But the Phillips Curve shifts around as workers have undergone shattering or angering experiences. It is this shifting that makes for variations in full-employment.
The experience since 2008 has been shattering. Labor remains hesitant to fight after the lessons of unemployed desperation of the last decade. Thus, the labor market can now get quite tight before workers become aggressive. Let's say, down to only 3.5% unemployment.
Before 2008, the workers were cockier and would become aggressive in the face of quite a bit more unemployment. Thus, wage stability would cease at a higher level of unemployment, say 5%.
This is back of the envelope stuff, but might be all the analytic complexity appropriate to this problem.
Perhaps the reason inflation is so low is because the basket of goods selected to measure inflation is not representative? Certain goods are highly automated (like agricultural product) or imported; and their prices doesn't go up as much. However, domestically produced goods, such as health-care, childcare/education, land/housing, the price of these has greatly exceed inflation figures. If labor scarcity does not produce higher wages, perhaps there are structural problem in preventing labor liquidity?
1
@H.Tran
ALL government statistics are manipulated to present the most positive view possible.
REAL inflation has been over 10% in most major urban areas for the last decade. Anyone that's been grocery shopping sees this. A rib roast costs a fortune. Pickles in my local market have gone from $1 to $1.50 to $1.79 in the last 18 months. At the same time manufacturers are reducing volumes and weights to hide cost increases. Sugar is now in 4lb bags instead of 5lbs. Pretzels and Chips come in bags that are half air. Soap has a big gouge out of the back.
We're seeing DEFLATION in the prices of things we DON'T need. You don't need a big flat screen TV. You don't need a new computer. You don't need a new SUV or high end clothes. You DO need heating oil and gasoline. You DO need food.
This is a classic set-up for severe inflation in the long run.
And btw - REAL unemployment is over 20% - little changed since 2009.
Things make perfect sense if you look at REAL numbers.
1
2008, percent of population looking for work. was 66%. The best ever was 67.1% in 2000 when unemployment was 4%. In 2008 it was still 66%.
Now it is 63.2%. Granted, part of this is our aging population, but not all. That is why the unemployment is so low.
Looking at it another way, the percent of population employed in 2000 was 64.4%, 62.2% in 2008 and today only 61%.
1
It would've been nice had the chart also been available in one static image without the "clever" feature of the green line progressing as one scrolls down.
2
People like myself repeatedly remind the NYTimes that the standard reporting of the U3 unemployment number is a hoax by design. It does not count long-term unemployed workers. It does not take into account the quality of the job. And, perhaps most amazing, someone counts as employed if they worked as little as one hour during the reference week!
The U6 number, that takes into account long-term unemployed and discouraged workers is not perfect, but is much better than U3 at giving a sense of the actual economy.
4
Inflation, in the larger sense, hasn't happened because the only thing that's been inflated over the past couple decades are CEO salaries.
3
One does not agitate for something better if one believes this is the best there is, and too many Americans have been brainwashed into accepting the Right's view that an unregulated market, notwithstanding the gross inequity and inequality it generates, is the best of all possible economic systems and that seeking an alternative offering greater fairness will only put us on a slippery slope to the incentive-killing, soul-deadening government-enforced equality of the Right's caricature of socialism.
4
What is the point of declaring full employment when many millions of people are not making a living wage. These statistics should include what pay grade everyone is at. That would give us a realistic view of how good the economy really is.
In addition, there is huge inflation in rents and housing costs, as well as utilities, cable, telephone bills, transportation and health care. We might as well forget about higher education for our children. Food has been increasing every six months.
The Fed needs to look at how much everything costs to live and then break that into a yearly salary and report how many employed people are actually making enough money to live on without working two jobs.
This would be a much clearer picture of the economy.
2
As I tell people, all the gains went into the stock market, not into wage increases. Want more money? Put your money in the stock market.
That's why all the presidential candidates want to tax the rich and create some new government programs. Don't want to share profits with workers? No problem, the politicians will pass laws to "encourage" you to do it, the old fashioned way...with taxes.
1
I'm not an economist, though I have spent a lot of with them in academic and business ventures I wonder if the constructs being used to evaluate trends and statistics are out of step with the reality of the times. Internet based business and international transactions may not be acting the way models predicted. Still, economists' tools and analysis are steeped in brick and mortar assumptions. Perhaps they are using a yard stick to measure something that should be done with the metric system.
2
Actual employment, number of jobs created (and filled) and lost--pretty much any employment numbers, don't seem to be particularly solid. It's not like the actually go out and count them all--they use a polling method (so it is an estimate).
People worry about "inflation" on the common idea/perception that, if labor is short and manufacturers have to increase wages to get labor, the assumption is that they will raise the price of their good. It is a "common sense" explanation that makes sense but isn't necessarily true.
it assumes a static tech/manufacturing base and it also assumes that producers will rely upon margin rather than quantity.
Also, significant amounts of manufacturing no longer occur in the country and so are not impacted by US employment number or wages.
Under these conditions, inflation is more likely to arise by too much money chasing fewer goods--but modern manufacturing technology reduces this possibility (except in new demand items where they underestimate demand--and only for short periods of time).
The one area where we ARE seeing a LOT of inflation is in the stock market... because there IS a lot of money looking for a place to go.
Wages are essentially static--and consumer spending static along with it--which means growth is being driven either by conditions external to the US market (world demand) or baseline population growth, rather than increases in per unit consumer demand.
1
Have any of the elitists at the Fed ever considered the negative impact of low interest rates on unemployed folks or those with low incomes?
I was in this group and the lack of interest on my small savings hurt me much more than higher rates would affect the typical Wall Street investor. It seems to me that bernancke, yellen and powell catered only to Wall Street interests while ignoring the impact on everyone else.
1
This is the most ambiguous of the economic indicators reported each month. One needs to look at salary increases, the number of people that are no longer looking for employment and not yet on the government payroll (SS), and GDP. All reported unemployment numbers do is give a POTUS reason to beat his chest. A 0.10% change month to month don't mean much from a big picture prospective. The indicators are at a plateau. There is something fishy going on and I believe soon we are going to see a large change in the numbers and that unemployment number will blow up. But it depends on so much.
2
Unemployment below traditional "full employment" is not at all a good thing for domestic production and growth. I am in sales selling custom made furniture from North Carolina. The factory, for over four years now, has had a help wanted sign out as well as employing two agencencies to send them workers willing to work.
All but an exception of people not working, that say they want to work, end up being "unemployable". The factory hires people after a two hour interview, they work half a day, then fail to show up the next day. With fast food outlets and the local grocery store offering increasing wages to find help any help, THERE IS NO WILLING LABOR to work in a furniture factory. Without a steady supply of hungry and willing labor, (read immigrant labor) willing to work hard, all day, 5-6 days a week, taking pride in their work with a desire to improve their life and families', we will never return the manufacturing jobs to this country that we so desperately need.
1
I think we need to start including people who work Part-time because they can’t find a full time job. Also if workers were so hard to find, wages should have risen. I know a few people who took pay cuts during the 2008 crash simply because employers knew how scarce jobs were
2
This is a meaningless report, or worse, it's as misleading as the US methodology of tracking supposed employment rates. As is often stated, these figures leave out wide swaths of long-term unemployed citizens who have given up, accepted intermittent part-time work, or who otherwise don't "count."
1
Its nice to hear the President of the Fed acknowledge that higher wages are their key warning sign.
That is, we can't have the perennially disadvantaged earning enough to live on, can we?
I wish now he'd acknowledge the non-economic drivers of higher employment: the death of unions, the advent of no-commitment employment-at-will, the effective shuttering of OSHA and other watchdogs, and the open capitulation of SCOTUS to corporate interests.
It's why, as Trump falsely hoots it up over the lowest unemployment rate in the history of the nation, not all that many people are celebrating.
The Fed and, as evidenced by the authors of today's op ed "Let's force the poor to love capitalism" haven't a clue.
People need to live. They need security. The need housing and food and education. And medical care. They need a modicum of real respect and the ability to participate in decisions.
People have been cheated of their educations by Republicans and the likes of Trump, but they're smarter than ever before.
They know we can afford social supports, single payer healthcare, housing, education, college for those who demonstrate thy can handle it. They know many others already do.
And they know for certain that those in charge choose not to. They choose to lavish more on those who have plenty more.
Its become clear up and down the income ladder that America chooses to treat people this way as other, better free market/Capitalist societies see it for the tragic mistake it is.
1
They ignored what many have recognized for years. The unemployment rate is artificially low because, for years, people have left the job market in frustration. In this one respect Donald Trump was right, he merely overstated its magnitude by many times. And, now that he's the one held accountable for the unemployment rate he can't help crowing about the numbers.
Regardless, many remain uncounted by the index. The still frustrated, the underemployed, members of the gig economy. Employment is not what it was a generation ago, and unrecognizable to those over fifty. Employers' attitudes toward employees must change, begin to recognize that a good employee is to be valued, not treated like a fungible piece of a machine.
2
Unemployment drops from 10% to 4.7 in 8 years...and continues to drop as a continuation of that momentum??
All I can say is THANKS, PRESIDENT OBAMA!
3
In October/November 1941 the number of people employed finally reached the level it had been at in 1929. In those 12 years the potential workforce had expanded at about one million a year. So though employment was at where it had been in 1941 but the amount of slack was still astronomically huge. But in December the Japanese bombed Pearl Harbor and the U.S. entered world war II. The armed forces alone expanded by 12 million people. Millions more went into government work and millions more went to work armaments factories.
It seems that slack in employment isn't really well measured. American society found ways to fill the defense roles, the government roles and those for industry - there was a lot more slack labor there than what they originally thought.
I think we need to shift policy bias back to the demand side again. Towards that we should have a higher target inflation rate and see how much more employment we can generate and the consequential increase in wages. Ultimately, wages is what creates demand, wages create the middle class and middle class is where decency resides in nearly ever respect of the word. You want to get rid of the Grotesque Trump? Create a middle class that would find him grotesque. That means paying workers more. Opps!
1
The unemployment rate has always had flaws. It doesn’t count disgruntled workers who have given up on finding work. Also, it doesn’t calculate the quality of one’s job. Do we only care if someone has a job, not how much they are paid or if it offers a decent standard of living? If they calculated the level of happiness people have in our society, it would be dire...
4
How can we have 'low unemployment' when so many companies are continuing to lay off hundreds or even thousands. JP Morgan and Morgan Stanley have laid off large numbers. Retail, the lowest rung on the employment ladder, is seeing companies go belly up on a regular basis.
Here in NY burbs I've seen countless people laid off as they just start what should have been peak earning years. They're out of work 2, 3 or even 5 years before finding work (IF they find work) and their new job is likely to pay half what they had been making.
More than a few are still looking.
Government statistics are deliberately manipulated (and have been starting in the early 1980's) to provide the most positive view possible. Plenty of people see this. Other sites manage to come up with accurate numbers.
REAL unemployment has been over 20% since 2009.'
The question is:
Why has the NYT continued to tout what are obviously bad statistics?
4
Full employment doesn’t create inflation pressure when most of the jobs are low-wage with few or no benefits.
Some employers not only offer low wages, but limit employees’ work hours to less than the number of hours that would be considered a full time job to avoid paying benefits. They find it is cheaper to hire two or more low-paid part time employees to do the work of one full time employee. Many employers pay employment agencies for temp workers to avoid hiring; temp workers are disposable, have few or no benefits and usually are not well paid. Many workers hold two or more jobs because the income from one job isn’t enough to live on.
Although the raw employment figures look good, the numbers don’t reflect the quality of the jobs. That is a serious defect in the statistics. Since inflation is low despite full employment, that strongly argues that many workers are underpaid.
2
I'm 68. Despite my degrees I am deeply in debt and never expect to retire. Many of my patients are looking for work but not officially measured as "unemployed" because they have never been official "employees", working what gigs they can get without insurance. I think the official unemployment rate continues to underestimate actual unemployment.
5
How can we be at full employment when so many people are working 2-3 jobs? Many people I know in their 50s and 60s are also underemployed. They are working but at a job that pays far less than what they were making before a layoff or a merger or whatever. Many of them will never get back to what they were making. So perhaps the numbers say we are at full employment but the reality is very different.
3
Let me post this again
The labor force participation rate is a measure of an economy's active workforce. It is the sum of all workers who are employed or actively seeking employment divided by the total noninstitutionalized, civilian working-age population.
And here are the numbers for the US
The civilian labour participation rate of the US, in 2008 was 66%. It fell until 2015 where it reached 62.7% and has since very slightly increased to 62.9%
That it is down by 3.1% sounds like a small number but given but it corresponds to 8.06 Milion American less in the labour market than in 2008
That is there is a reservoir of 8 million, IF the jobs would be as they were in 2008
BUT, economists know that the labour force participation rate is the closest measure they have to the quality of a job (pay, job security, fringe benefits)
It is high when the jobs are good and low when they are lousy. The jobs in the US have continued to degrade chiefly due to continued outsourcing (google Lordstown)
For comparison, it is 82% in Iceland
3
Employment at $7-10 per hour may help statistics but it’s certainly not a living wage. With people forced to work two or more jobs in order to live, the need for a national minimum wage is crucial. Even at $20 per hour it’s hard to cover all expenses in the US today
2
When you are talking about economics based on an outdated economic model, then it is no surprise that "full employment" is being redefined. I'm just surprised that it took this long or longer for the Fed to figure that out. The question that the Fed should be looking at is what happens if our interest rates go negative like they have in some European countries?
2
um, yeah. Economists have made the same "loss of faith" in full employment every single business cycle since the 1960s. They simply never predict it going to 3+% unemployment.
But the figures are ever changing and this unemployment figure is perhaps the most disingenuous since the business cycle began after World War II. The labor participation rate is well below what it was in 2007, and until that changes, this particular unemployment rate does not measure the people out of work at all, it is simply an artifact that can be gamed by powers that be to suit their particular arguments, political or labor.
2
Some answers that should be given with this data:
What counts as 'employed' or 'unemployed'?
Who is counted as 'seeking employment'?
What percentage of 'employed' individuals earn a living wage in their jurisdiction?
What percentage of 'unemployed' individuals are actually doing domestic work that doesn't earn money?
What percentage of 'employed' individuals earn minimum wage in their jurisdiction?
Considering the level of anger in this country from people who are barely scraping by, the unemployment rate is obviously a very poor metric by which to judge economic strength.
2
1. BLS has tweaked the methodology for measuring unemployment through the years. We should really be paying attention to "U6", which counts "discouraged workers" among others as part of the work force.
2. The classic definition of "full employment" has been 5% unemployment. A number lower than 5% is generally a sign of a stagnating economy, where people feel stuck in the jobs they have and do not quit to either seek more gainful employment or embark on entrepreneurship.
3. The Fed's congressional mandate as enshrined in the Federal Reserve Act calls for "stable prices", yet the so-called "low inflation" years since 1980 have still seen 157% cumulative inflation (that is, it takes $257 in 2019 money to purchase what cost a mere $100 in 1980). The Fed is not only wrong on employment, it has for decades failed its mandate to maintain stable prices.
2
This is such bunk. The problem is that the United States does not measure unemployment correctly. It remains near 10% (and is much higher in some regions), when the statistics count those who have stopped looking for work because there has been none to be found, and those who are no longer wanted in the workforce, for lack of a steady employment history. Add to this that nearly half the jobs in this country (43%) do not pay a living wage and do not supply useful health insurance, so that people are working many jobs to still struggle, and the true picture emerges. Employers can continue to offer lots of unfilled jobs for the struggling to add to their resumes, while the real unemployment and underemployment remain unchanged. Wages do not rise when people scramble for underemployment.
2
Inflation is down because there hasn’t been any real wage growth since 1979.
1
So President Trump has been vindicated for his browbeating of Fed Chairman Powell.
For the past 50 years the Fed has been operating on the fallacy that 5% unemployment is full employment. The Fed appears to have arrived at this number because when unemployment is below 5% workers have some bargaining power to demand wage increases, but when unemployment is above that level employers have all the leverage.
Even worse, the Fed used 5% unemployment as the floor, below which the Fed aggressively raised interest rates to stymie worker bargaining power. Is it any wonder that wages stagnated for 50 years?
1
Finding skilled workers is not the problem. The problem is failure to train workers, even if they are female, black, or hispanic. Refusal to pay market wages also explains open jobs. The refusal to honor either of those propositions opens the doors for productivity losses and immigrants.
Someday hiring officials might get honest or realistic about labor force improvement and expansion.
3
This is not full employment since wages have not kept pace with the cost of living, and wages, except for very specifically skilled, experienced professions in specific markets Maintaining the minimum wage at historically low levels, as compared to the cost of living, depresses the wages of in experienced, unskilled, and semi-skilled workers. Too many people cannot afford to live on a single job and are working 2 or more jobs or a full time job and side gigs. But that is what the oligarchs want, distracted, overworked minions to support an idle moneyed class.
4
I support the premise that woman entering the workforce are still a factor. When my kids were small (early 90's) we lived in Toronto. On our suburban street almost every Mom worked a full time job - we had care givers or parents minding the kids after school - some parents split shifts. But we all worked. Moved to PA in the 90's and I was the only executive working Mom on our street, and there was one Mom that was a teacher. All the other Moms, and a lot with kids in my children' classes did not have an outside job. This is a big pool of women who could have come back into the workforce after their kids hit high school or left, and they were never counted in the "unemployed" numbers.
This should be the final nail in the coffin of talking about a gamed unemployment rate -- it doesn't count people who are so marginalized and dispirited that they've stopped looking for jobs -- rather than the labor participation rate, which is the percentage of working age people who have full-time work.
The labor participation rate remains low by historical standards, that is, since before the U.S. started gaming the unemployment statistics. A low labor participation rate is unhealthy economically, socially, and politically, and we continue to risk our future by failing to confront the implications of a low labor participation rate in terms of economic growth, productivity, and income inequality, among other issues.
Crucially for today's polarized politics, we cannot set a sustainable, humane immigration policy while we pretend that we have "full employment," ignoring the waste of human capital throughout American society.
1
1) Underemployment (people working part-time)
2) People working two or more jobs
3) People who have stopped looking (mainly older workers, like me)
4) The gig economy
Add to that workers who are working at poorly-paid jobs and receiving government subsidies to survive (barely)
2
Just to add that the article mentions is the U-3 rate of unemployment.
It is the most commonly reported rate of unemployment in the US and represents the number of people actively seeking a job.
Each month the Bureau of Labor Statistics releases 6 rates of unemployment, from U-1 to U-6
The U-6 rate includes underemployed, unemployed, part of discouraged workers (less than a year) in the country, and provides a broader picture of the underutilization of labor in the country.
Currently the U-6 rate is 6,9%
But it is still not the big picture, a lot of other persons are not counted, like discouraged for more than a year or incarcerated people (which accounts for more than 1% of the workforce...), etc..
For more info on the topic I advise you to have a look on the well informed shadowstats website.
1
We can talk about low unemployment, but I have yet to see anyone making MAJOR improvements in their salary since 2009. Most of my raises have been below inflation. I like my job. I like where I work. I could leave for some place else to work but seems like higher paying jobs are just jobs that are meant for 2-3 people to do and they pay you more for double the work.
Also, I wonder how many Boomers are working past "normal" retirement. Some have to work, but I know plenty of Boomers in corporate jobs over the age of 65 who are happily working - and have PLENTY for retirement. While everyone can choose their own life, in a way this kind of hurts younger people because the Boomer is taking up a job that otherwise a younger person could be doing (and raises we would be getting).
64
@Empire Money for nothing.
@Empire Very good points. I've been in my current job of 8 years and have received yearly raises and one promotion... comparing that to inflation I'm barely keeping up.
A lot of people staying in the work force after retirement age do so for the health benefits. Private health insurance will eat into retirement funds.
71
I am supporting both of my children because they do not make enough to live a middle class lifestyle. I pay for ones car and the others loan to get out of credit card debt.
12
This should worry us all. Can you think of a time when unemployment was at 4.2% and the president said: "Unemployment...is widely disappearing...We in America today are nearer to the final triumph over poverty than ever before..."? This was 1928 and the president was Herbert Hoover. What we are witnessing now is a bubble for the ages. Interest rates near zero, deficit spending out of hand and debt is skyrocketing. By the time the ripple comes, there won't be many tools left to deal with it.
The fact that unemployment is so low and inflation is not high means that jobs are not paying enough. This is not a good thing. Remember that a system with indentured servitude can sustain almost 100% employment with no fear of inflation since the servants aren't paid much.
The real conundrum isn't that we suddenly realized we can have more jobs without increasing inflation. The real conundrum is how is it possible that so many people are STILL willing to exchange their labor for small wages and benefits. That is what is truly perplexing. Part of the answer may be the loss of unionization/labor power and an increase in corporate power. Part of it is simply that after nearly 4 decades of neo-liberal policies and government underspending, workers have lost the knowledge that they can actually have a much larger share of the pie.
140
@grusilag
Immigration both legal and illegal supplies the business world with as much workers as needed.
I'm shocked at how little some folks are willing to accept for their efforts.
Inflation as per the FED is not real. They don't count very important items and use hedonics in many other cases.
10
@grusilag
So true. I see that labor of all kinds is shockingly undervalued. Consider the wage differential between labor and management and how it has grown. Cashiers, office staff and others used to be able to make a living, with few frills, but a living. Now their jobs are predominantly part time, and irregular. People who can use fairly sophisticated software (Excel, for example) are considered “unskilled” labor.
9
@grusilag Another reason that people accept lower paying jobs is that may be their only path to health care. The need for work provided health care plans is another way to make a person stay where they are not being paid well or are otherwise unhappy. It leads to a kind of indirect indentured servitude.
19
The Fed is wrong a lot.
It may be quite eye opening when we all learn that the Fed selling Treasury's with the left hand (every two week auctions) and buying them with the right hand (supporting the REPO market at night).....is wrong and....
is some kind of fake and make operation that is a rapidly shriveling bandaid on our long ascent into huge debt burdens.
2
The very meaning of "Full Employment" and "maximum employment" is deeply misleading. It is simply a measure of anyone who worked for 15 hours for one week. That is not full employment by any normal interpretation. Once you understand that, all of these stats look cooked and massaged. It doesn't matter what party is running the Fed Bank: all recent administrations did the same thing and loved to publish positive employment indicators to the press. This article is just a variation on that "the economy is always getting better and better" theme. Folks fall for it so why not?
"To summarize, the employed are:
All those who did any work for pay or profit during the govt survey reference week.
All those who did at least 15 hours of unpaid work in a business or farm operated by a family member with whom they live.
All those who were temporarily absent from their regular jobs because of illness, vacation, bad weather, labor dispute, or various personal reasons, whether or not they were paid for the time off."
The prime age employment rate is 25-54? What happens to someone who needs a job at 54+? Not to mention health insurance? Seems to be one giant loophole.
Senator Lieberman, a Democrat in name only, voted down Medicare at 55 will forever be remembered thusly, the balance of a career notwithstanding. History sometimes is not kind.
2
As a professional macroeconomist, I can say with confidence that the fact that the unemployment rate has been this low for this long without inflation increasing is one of the biggest puzzles in macroeconomics. I want to emphasize that the puzzle is not that the unemployment rate is low, it is the joint occurrence of such a low rate with no increase in inflation. There are multiple explanations for this: a) globalization with global supply chains (so costs are not based on conditions in the U.S. labor market alone) and fear of outsourcing keeping U.S. wages down, and b) the fact that the Fed has been successful in controlling inflation so that inflationary expectations are low and stable. But the biggest lesson is that when labor has very little market power because of low minimum wages, weak labor unions, weak unemployment benefits, and the before mentioned fear of outsourcing, the unemployment rate can get very low (much lower than anyone thought) without wages and therefore costs and prices increasing.
140
@Mark Kuperberg
Yes, and... wages are to low so people have limited purchasing power. Also many people are working two or three jobs, or multiple "gigs." Doesn't that distort the picture?
Also, pardon my ignorance, but how do they know how many people are looking for work?
17
@Mark Kuperberg It's not puzzling at all. Workers barely earn enough to live, so they aren't spending enough to inflate anything.
32
@Mark Kuperberg Rents have been enthusiastically raised so that renters are often very squeezed and have very little opportunity to save for their own house or anything else.
10
We are among the very many people that we know that are semi-retired because we cannot find work as older people despite very successful careers as consultants. So many people are cobbling together a living between side gigs, and in our case social security. We are not counted as unemployed, but we certainly feel unemployed. The country may be in for a big surprise come election time to find that the economy, for regular people, is not the wonderful economy that is being touted by far too many on both sides of the aisle. Moving to the center won't fix it.
90
@PA
Care to name the Democrats on the other side of the “aisle” you blame for extolling the success of the economy on the backs of the under paid? I’ll wait.
Who’s holding down the minimum wage?
Botherism won’t fix the problems, either.
@PA Thank you. That's one of the elephants in the room that people don't want and are ignoring. Being 62, and not employed full time, I have to cobble a living with multiple jobs within my profession. Very very few want o hire anyone over 50 when there is cheaper talent that will just perform tasks rather then innovate. Economists can dangle all the figures they want about unemployment and jobs everywhere for everyone, but the reality is, most pay little if anything and few offer benefits. I really can't wait for the blowback. I shop and feed a teenager and can tell you all food prices have significantly jumped in the past year. Health insurance is now a joke and barely affordable. At some point this will all collapse, and will come with a huge price to those of use near the lower middle to bottom. We are already suffering.
5
The official "unemployment" rate is a very poor indicator of the state of the labor market. Just as important, but consistently ignored are wages and participation rates. Where I live there are a countless number of minimum wage jobs flipping burgers and bagging groceries, not to mention the thousands of Uber and Lyft drivers who net subminimum wages. No matter how much you tout the strength of the labor market, the reality is that income disparity is getting worse.
175
@David Labor participate rate (U6) has been moving in the right direction.
https://www.macrotrends.net/1377/u6-unemployment-rate
Median hourly wage has been growing faster than inflation. This mean more buying power
https://tradingeconomics.com/united-states/wages
1
@James
But less buying power for the elderly living off fixed incomes. The Fed continues to devalue money to stimulate job creation. No one cares because the elderly are dying anyway.
6
@James ~
The difference between the average hourly rate and the CPI has been better ... by about 1% a year.
Wow ... and extra Starbucks a week.
Well, except if you are in the top 5% or so ... then you can but a Warhol for $22 million that sold for $10 million 6 years ago.
3
Perhaps my ignorance of advanced economics is on display, but this does not feel like a healthy economy at all.
While completely anecdotal, I feel this is worth sharing. As a young adult not far removed from college, the economy that myself and my peers face is not welcoming. The entry level job is dead. Our degrees have becoming increasingly meaningless despite becoming more expensive to earn. I know many of my friends have taken jobs unrelated to their degrees just to get food on the table. The degrees in question here are not those billed as useless--STEM, education, and the like. We are struggling. The few jobs that are taking us are not paying well, and they fully exploit our desperation. We are mired in debt that will prevent us from being homeowners and from raising families.
This is not a good outlook.
115
@Ellie Most of my friends have more than one job and some have more than two jobs. Many also have a side hustle to make "extra" money. People in my field often cobble several jobs together because full-time jobs are hard to come by. And meanwhile we're all being crushed by student loan debt and having loan forgiveness dangle forever out of reach.
18
@Ellie education is not a “great” field. If you want to teach children that’s great, but as far as I know there is no comparison for ROI like STEM.
I don’t mean to sound callous but supply as well as demand for your labor should be one of the biggest considerations when choosing your career path at a university and many kids don’t realize this till they have graduated and entered the labor market.
3
@Ellie
Consider moving to Texas. The labor market here is hot.
If you have a degree that gave you some specific entry level skills, e.g. accounting, finance, IT, engineering, marketing, etc., and you are willing to located anywhere in Texas, you should be able to find a job.
I moved to Texas from Brooklyn more than 44 years ago. Never looked back!
1
One has to wonder if our metrics for inflation accurately capture the costs everyday families face. Since wage growth has not kept pace with basic expenses like rent, families are diverting an ever-increasing share of their income to the basics. Perhaps the Fed should consider revisiting what metrics they use to gage inflation and pick ones that make more sense for the average American family.
73
@Priced Out
That would cost the government money as increases in Social Security, for example, are tied to the inflation rate.
4
@WSB So that's why basics such as food are not included in the numbers. What a scam.
4
@Priced Out
You don't think the Trump administration would do that do you?
People may be employed, but many have to have multiple jobs to survive. Inflation may not be high but it does exist and my husband has not had a raise in 5 years. Consequently, our spending has been reduced. At least I get a COLA with Social Security.
5
@ExPatMX
You are exactly right. Unemployment may be low but no one talks about the kind of jobs that are filled. So many people are employed but making low wages or working only part-time. I think the feds still believe in trickle-down economics. Clearly, they don't work. Those at the top become richer and those at the bottom become poorer.
2
This is only anecdotal evidence, but the vast majority of working people I know are working more than one job in order to pay the bills. Almost every single person I know is looking to try and find a better job, one that would enable them to live a modest lifestyle on 40 hours of work a week with three or four weeks of paid vacation a year and enough left over to save for children's tuition or retirement. This type of goal is out of reach for many people I know personally, and I consider myself middle class. The unemployment rate may be statistically accurate, but it
is pretty useless information, as far as I am concerned.
97
And many people, like myself, simply gave up looking for a job after 4 years of no call backs and we don't show in the stats.
Fortunately for me, I had savings, a 401k and my house was paid for.
I truly think the current stats are way off base an no where accurate to what is happening in the real world.
273
@Jerry Schulz
good comments. i recently retired at 63 (not sure I saved enough but I'll be ok).
I asked an amazon delivery person how many hours does amazon require them to work, thinking maybe I need a part time job. she said she works 12 hours a day. i wonder what she is paid?
18
@East Coast - My guess is that at 63 you don't want to work 12 hours a day, at least for an extended period of time. And something this brief article doesn't touch on is that over the last decade the job market has changed in another way, in that some jobs at the lower end are not that attractive.
17
@Oliver, thanks for sharing your story. It will be interesting to see if people like yourself reenter the job market. I had a somewhat similar experience when I found myself unemployed in my early 60s and had to decide whether to retire or find another job. I hedged my bets a bit, and I now collect my various pensions but also work part-time, including some volunteer work.
But what forced my decision was a moment when I had applied for a job and they DID call me back. All of a sudden I had to face to reality that partly because of a narrow specialty I had at least one employer was willing to hire a 64-year-old guy! So I had to ask myself if I really did want another 40-hour-a-week job. I decided I didn't, and nicely thanked the would-be employer for their faith in me.
So the bigger question is, will this job market lure back 60-year-olds and 70-year-olds? And might employers restructure jobs to be more attractive by being less than 40 hours per week? Besides giving employers more workers, this might also be a way to tap the wisdom and experience of our oldsters, something I think our modern workplace would greatly benefit from. A great movie on this topic is The Intern with Anne Hathaway and Robert De Niro.
49
This articles is interesting, but it fails to educate the reader on some very basic economic principles that’s it’s expounding on. Namely, what’s called the Phillips Curve. Economist OBSERVED and LATER theorized/modeled that unemployment and inflation had an inverse relationship with each other. After the 70’s that broke down and it was later revised by Milton Friedman to incorporate expectations about inflation. My question then is, have expectations about inflation changed once again if we’re seeing the modified Phillips that has traditionally held break down? What’s the cause in the shift of expectations? I’d reason that we’re seeing demographic shifts. We’re now a decade into the boomers retiring and Gen Z, yes, Gen Z, who are now in there early 20’s starting careers. A technology native generation that never had to bear the brunt of the recession and entered the job market a lot more educated and optimistically than boomers and early millennials.
1
"It's the (gig) economy, stupid."
6
So, what does this tell us in the end? That FED has no clue what it is doing? That one of the key parameters of the economic strength and well-being is bunks? That these authors are smarter than the army of other economists looking into same numbers? I just do not know how to exactly get all this.
I always thought that the 'full employment', and especially the 'shortage of labor' is a profoundly stupid conclusion, as we all know that only jobs for which it may be true are jobs paying the minimum or less, but I always thought that the statistics is, relatively speaking, believable and that it reflects the reality, distorting it a bit in the process.
@ss
I always thought that full employment = less employees available = increased raises to attract employees. Guess I was wrong.
1
Anyone who thinks Trump deserves credit is clueless.
Unemployment rate is lower because people need to work 2-3 jobs.
5
Look it is really simple. Wages have stagnated for 40 years and productivity has gone sky high. Unions have been busted for the most part and all the GOP and now 80 percent of the Democrats have been bought and now work for corporations and the ultra wealthy. So you can show me all kinds of charts and figures but are they saying what every level headed person in this country knows?
I get dizzy reading them. Please calculate in these charts and grafts, breakdowns of what corruption has contributed to the sinking of the American workers into greater and greater poverty. Oh and don't forget to factor in college grads choking on outrageous college debt, that Biden so happily made a life long burden never to be discharged for his banker pals. And you might add that these low wages even with three jobs prevents these terribly unimportant workers to the elites, makes it impossible for them to buy homes or many goods and will cut into the profits for the wealthy eventually. You know like the slave owners begrudgingly had to feed their workers to get anything out of them and try .
Am I bitter about the rest of us being treated as trash by the chicanery of many of the wealthy, you bet. Can you chart the innate resentment of the workers for being robbed.
4
Obama talk of the new normal was the realization of the failure of:
->Yes we Can
->Change we can believe in.
And now we have Trump...
1
@Kingfish52
You are absolutely correct, Kingfish. Thank you for your comments.
Have any of you ever wondered how the employment, living and political conditions decried by Charles Dickens, Frank Norris and Upton Sinclair got started? Kingfish52 is telling you. Oh, and the whole "working slavery" situation has been made much worse by almost forcing our young people to saddle themselves with huge college loan debt rather than encouraging the creation of academic/employer joint partnerships to train high school graduates in really USEFUL skills and occupations. Shame, shame on today's adults. By our votes and our political apathy, we are sentencing ourselves and our future generations to economic serfdom. Shame!!
3
All ya need is Trump and the economy suddenly is capable of handling a lot more jobs. Thank you Mr. Two Terms!
@Bob But the chart in this article does not show employment "suddenly" doing anything--it's a steady rate starting in 2009.
2
@Sarah
Correct. Continuing a trend that has never happened in history (typically you get to full employment and then the rate stays constant or deteriorates). But that was in the pre-Trump era. All rules have been thrown out and replaced by much better guidelines that can be followed when and only when such guidelines are found suitable.
In today's online NYT there is an article, "The SNAP Rule Will Cause More Hunger Than We Can Handle". That article and this article (along with its comments) show what is wrong with the Official Information. I think that America is in for some very bad times. There is only so much people can take, will take, before they turn to revolution.
3
@sjs
Might get so bad they have to give up Amazon Prime + new iPhones and unlimited data plans for their grade schoolers.
@sjs
"There is only so much people can take, will take, before they turn to revolution."
Why do you think we have a militarized police force and a growing surveillance state? Why do you think there's such a cry about gun ownership?
Government does not care abut protecting US. Government wants to make sure they are protected FROM us. Look at how the 'Occupy' movement was crushed. A disorganized mess with people simply saying 'This is wrong' and it was treated like an existential threat to the American way of life.
"Who is counted as employed?
People are considered employed if they did any work at all for pay or profit during the survey reference week. This includes all part-time and temporary work, as well as regular full-time, year-round employment"...…..
https://www.bls.gov/cps/cps_htgm.htm#employed
2
The following is the graph that should be talked about. It is far more meaningful; of course, it doesn't serve the current White House as well.
https://fred.stlouisfed.org/series/SLEMPTOTLSPZSUSA
1
@Sannity
Our labor force participation rate is not far out of line with most of the developed world. With similarly aging populations, many countries have the same problem. It's interesting (confusing) to note as well, that many countries with higher participation rates also report higher unemployment rates.
@Charles
Not confusing, in that participation rates are for prime age workers (25 to 54) for the US. Countries that choose a different reference or countries with a lower average age will show different unemployment rates for the same unemployment rate.
Trump "cooks the books" in everything he does. The economy is not as good as he crows about. Time will reveal all.
1
Employers don't want employees; they want slaves. We are approaching a 'full slavery' economy. Hmm....didn't we have an uncivil was in 1860 to abolish slavery?
2
I need a raise and more affordable healthcare.
Where are those things?
3
It is hilarious reading the posts by liberals trying to put a negative spin on Trump's fabulous economy.
And in their next breath, they try to give Obama credit for it!
TDS is real. It causes severe cognitive impairment.
@George Orwell
Fabulous economy? For whom? Our taxes went up $5000 last year for the first time and my husband hasn't had a raise in 5 years. Not my definition of fabulous.
2
IF ONLY ....
the genius of 'selective' reporting wasn't so useful!
1
Of course anyone over that magic 54, will not be hired due to age, no matter how skilled. Or how much they need a job. Like average Americans can retire mid 50's when they get laid off.
4
Per all the other comments about the kind of "jobs" being "created," see the Jan 2019 article in Business Insider that should preface any headlines about the "low" unemployment rate.
https://www.businessinsider.com/unemployment-vs-involuntary-part-time-work-underemployment-2019-1?fbclid=IwAR0qdqL6cxVlQ63yn8PmxA1BkpglafSQVZJG3twhx4ba0wAGiuc_dfM8SpM
2
6 Reasons That Pay Has Lagged Behind U.S. Job Growth - The New York Times
https://www.nytimes.com/interactive/2018/02/01/business/economy/wages-salaries-job-market.html
1
There are many conditions in the current economy that make me wonder if someone is cooking the books to show low unemployment.
The level of consumer debt, disposable income and recent increases in the national debt do not support the notion that unemployment is as low as we're being lead to believe.
We know that Trump has a penchant for being less than truthful so I wonder if he gave marching orders that effect data provided to Dept of Labor that's used to calculate unemployment.
It doesn't add up. This is not a conspiracy theory but rather the jaded, cynical opinion of a guy with a BA in economics.
4
It appears the rate is slowing down in the past 4 years. GDP is also lack luster. Trump was handed a good economy that appears to be slowing down. He likes to tout the stock market rise as his doing. In a way that is true but it is not because of good economics. The interest rates are very low so there is nowhere else to go. Also, Trump's tax cut has not been invested in companies. Instead corporate America is buying back stock.
4
@Don
Add to that that the people on the lower income scale do not benefit from the stock market, the wealthy do.
1
You know, if there was any truth to these numbers...
The gov has no idea who is unemployed after 13 weeks when they can no longer draw unemployment.
So this is all absurd. We could have 20% unemployment and the gov would have zero idea if they'd been out of work more than 13 weeks.
7
So, Milton Friedman's NAIRU theory has finally been permanently debunked, at last. About time.
Perhaps now we can relegate the guru of conservative economics to the dustbin of history, along with trickle-down theory.
There is one caveat, however, that suppressed wage growth may be keeping down inflation.
6
Here's a great chart to understand what's going on. As you can see (and is explained in the article) workforce participation is the problem. Under Obama, rehiring after 2010 or so was steadily upward, but weak. The first year of Trump sees a slight drop. I'm quite curious to see if that trend continues for 2018, although it seems unlikely.
I look at it this way. Let's say 1 in 10 people have the ability, drive, and chutzpah to start their own business. In the roaring '90s, that 1 person needed 5 employees to bring their twisted desires to fruition. But now they need fewer. First, they can outsource to countries with lower wages. But of increasing importance, they can outsource to automation.
Now, rather than 5 employees, that would-be tycoon needs five.
Part of what allows Mr/s. Chutzpah to start their own business is being young and healthy or older and able to afford health insurance. Nationalized health insurance may help more people to own companies. Another possibility would be to shorten the work week.
One thing to keep in mind: China has three times our population. If we assume that China can indeed make widgets themselves (the safe assumption), that means that three out of every four widgets sold on the world market will be made in China. I speculate we're running on borrowed time at this point.
2
When I studied economics in the 1960's the normal unemployment rate in a stable economy ran around 3%. All this changed with the stagflation of the 1970's. After Volker killed the high rate of inflation the economy returned to normal but the fear of inflation has kept the unemployment rate unnecessarily high.
1
@Richard Moore Well, that was before Milton Friedman and NAIRU came along.
NAIRU is Friedman's theory that below a certain level, inflation will not only increase, but accelerate. Giving conservatives a reason for keeping unemployment high.
Like all of Friedman's other theories, it doesn't work, but that doesn't keep the right wing from pushing it as fact.
3
"Good as it gets"? Can there be a cruder measure of economic health than this? Are we better off if a spouse takes a job to supplement a partner's income and leaves his or her children in a questionable childcare situation - or would we be better off with a parent present in the home raising the kids? Are we better off when college-aged students drops out of school to take jobs because college is no longer affordable or they are unable to juggle work and school? (This is a situation a relative has encountered with "clients" on more than one occasion as a volunteer tax preparer in a government program.) Are we better off as a nation when virtually every task, including those we used to do for one another out of sense of duty or passion has been monetized? It may be time to consider whether unemployment approaching zero is an indicator that we are mortgaging our collective future rather than a sign of good times.
4
unemployment may be low but wages are not rising and many people are forced to work 2-3 jobs to pay the rent. I also worry about the future of automation and online shopping since it seems the only place low skilled workers will be able to work in in the future is a Amazon shipping warehouse.
6
@JM: Approximately 5% of workers have a second job. Is that "many"? I'll leave that to others to judge.
The economy theorems that we took as axioms no longer hold true. Inflation has been stagnant for almost three decades now since Greenspan days.
We were told inflation will rise when economy heats up, and fall when recession hits. We've had two of the biggest and longest economic expansions (Clinton era, and Obama/Trump era). Throughout, interest rate remains low, to practically zero for a very very long time. (It's only when Janet Yellen came along that she bucked the trend to start withdrawing QE and raise the rates.)
Throughout these periods, inflation barely registers above 2% (the target rate). Economy (and job market) chugs along nicely. Interest rate is artificially low (and stock market soars as a result). All the while, unemployment rate continues to fall (particularly due to true resurgence of job market, but it's also that those long-term unemployed never came back to the market or are unable to rejoin the job market due to lack of skills.
It's painfully clear that the economic and ideological theories that sustain the 19th and 20th century do not seem to work (or hold true) anymore. Central bankers are in desperate times trying to find whatever weapons in their arsenal to fight perennial deflation (hello, Japn), combat slide into recession (hello, Europe). China's model is effective but is artificial.
One factor that's missing, is the humongous volume of private liquidity sloshing globally chasing ever-lower yield that's outside of monetary policy control.
2
Because wages are stagnant and 40 percent of the jobs are low paying jobs!
8
unfortunately poor people are just plain invisible in this country, their predicament is almost completely ignored because nobody sees any benefit in reporting/discussing what we can do to lift people out of poverty. It would seem like OBVIOUS that since the minimum wage has stagnated at $7.25 an hour for the last 13 years that YES, we have serious inequity in our labor market. Nothing will change if republicans continue to get their way.
14
Actually, I think they were right on their 'full employment' comments, not wrong. The reporter/article is setting a very high bar for what 'wrong' means... a mere, what, 1% difference ? More to the point, the metrics being used to calculate employment have huge error bars just due to the changing mechanics of how the economy works verses the out-of-date methodologies used to gauge employment. The accuracy of those numbers is quickly dropping, which makes these moves less and less relevant and less connected to reality.
In other words... these last few percent are practically meaningless in real world terms. We have been at full employment for several years now. Writing about sub-percentage moves in this environment is going to be highly inaccurate.
A better measure at this point (i.e. in times of low unemployment) would be real income, quality of life, access to health care, mobility, and savings.
--
In terms of wage pressure, that is also an outdated metric due to the continuing automation trends in the economy reducing the impact wages have on corporate profits and also reducing the leverage wage-earners have to demand increases. Many job categories are saturated with potential workforce due to increased mobility, but the relatively fewer jobs available at any given employer and heavy automation reducing education and experience reqs is making it difficult for workers to demand raises.
-Matt
2
That there has been so much "miraculous leeway" in the relationship between unemployment statistics and interest rates is likely to be due to another factor. The fact that the labor market has so much flexibility without an attendant rise would indicate that the unemployment statistics are far more inaccurate than we have suspected and disguise serious structural flaws in the underlying accounting system.
4
Though there are other measures that are important to communicate the health of the economy, the jobs figures seem to be the main talking point for politicians. So, can we trust the numbers from this administration?
Pictures can be hidden behind data definitions and data collection changes over time. Often, subject matter experts are the only ones who know the inside track, and the public has no idea what's hidden in the bulletized talking points. I'm well aware of that, I was a subject matter expert for a different set of federal data.
I'd love to see a deep investigative dive into this with the employment data. Should we be leaning on this data so hard? What about trends with types of jobs, under-employment, salary/wage levels, personal debt levels, retirement savings, employer-provided health insurance with a GOOD plan for the employee and other benefits? Are people in the jobs they want, at a fair compensation for their experience and skills? I know many people who are, and many people who are not.
This more complex picture is more important than simply employment numbers. But, it doesn't fit in a single tweet.
1
@Deb
What's hidden behind the data is the definition of "employed".....
From the BLS website:
"Who is counted as employed?
People are considered employed if they did any work at all for pay or profit during the survey reference week. This includes all part-time and temporary work, as well as regular full-time, year-round employment".
1
Labor force participation is still less than in 2008, and birth rates are at an all-time low because children have gone from a fact of life to crazy luxury. We don't have to worry about inflation as long as 44% of adult workers (ages 18-64) are earning $18,000 a year on average. Nobody's going to be driving prices up on that kind of pay, even as housing costs rise to bad-joke level. We're earning McDonald's incomes that used to be geared for teenagers, and accordingly living in our parents' basements well into adulthood.
7
@Flora
My son just graduated college with a MS degree. His starting salary was a little more than double what mine was (with a BS in a similar degree) 40 years ago. He had more experience and a higher degree.
Adjusted for inflation my starting salary 40 years ago would be worth almost FOUR times more today.
So.... more experience, a better degree and HALF the buying power.
There's something VERY wrong with this scenario.
Keep in mind that student loans 40 years ago were far smaller, with lower interest rates making them far easier to pay off (and they were not that easy to pay off then).
The labor participation rate remains low. With fewer workers available, there should be increased wages. That has not happened.
6
Seems like a correlation between the massive bailout 10 years ago (as that government $ moves through the system), and a large number of people able to work because the psychological boost that there is a healthcare backstop.
Thanks Obama!!
4
Great article. The person who thought of and designed the graphic should get a bonus, it is well done.
9
"Shadow" work force? What does that mean?
What about the underground economy (aka Black Market)? Does the government have any idea how big the labor market is for these types of jobs?
Does the unemployment rate count those working seasonal jobs? Temp jobs? Part-time jobs?
4
Articles such as this one presume that the official employment statistics accurately portray reality and, to the extent that inaccuracy exists (and it surely does), that the inaccuracies have remained consistent over long periods of time (as they almost certainly have not).
In other words, the data is useless for comparing long-term trends.
5
@CT Resident I agree with you. Also, we know that the definition of employment and full employment have been changed and doctored under the Trump team. These numbers are not as good or reliable or real as we are told, and we know that from NYT reporting. I am shocked that this was used in the NYT. My guess, they are looking for subscribers and trying to get their footing back in the WH Press Room.
2
@CT Resident Hence the Disraeli conundrum.
when the data confound the collectors, it's time to take a look at how the data is collected, and what interpretations are being applied. "Full employment" for many Americans still means they are taking second jobs at lower wages just to meet their needs. It's time to take a hard look at the economic theory that underpins this analysis, and allow for a new paradigm. This one isn't working.
11
The problem with this data is that workers who have opted out of "traditional" employment (whether by choice or circumstances) are simply not counted as part of the labor pool. So this population does not include the long-term unemployed, gig workers, new graduates, or anyone looking to get back into the workforce.
Look at an unemployment breakdown by age, location, long-term layoffs, persons of color, or low skilled workers and you'll see a different picture.
8
@ShallBe Do you have any links for that data?
1
The Phillips curve theory posits a link between low un-employment and future Rising inflation. The data upon which the hypothesis was based was collected in an era after 197(2when the nation’s baseline inflation was much higher than we see today. Paul Volker gutted hyper-inflation beginning in 1980 by raising interest rates above 12%
. However their is a hidden factor that was as powerful as Volker’s super- recession in eliminating inflation for the last 30 years? Private sector unions were destroyed. They simply were denied ,through legislation and the courts ,the power to negotiate higher wages set to productivity and corporate profits.
Today excess profits are stored as cash overseas and in the US, and are used for share buybacks which, of course, benefits shareholders not workers. We are mow back to the Republican economics of the 1920s. Inflation then was also less than 2%.
12
@Thomas
And the major deflationary force is labor arbitrage. You can only have inflation if wages rise or access to credit rises. Credit is maxed so your only push upward is wages.
1
It shows that labor has no bargaining power nor ability to push wages up significantly. Why? Global labor arbitrage.
Also what are the jobs? We have a tax cut to the richest people and boomers with retirements. 200 billion subsidy is about 17 billion per month to the wealthy. How much do the jobs pay?
If this month produced 175,000 jobs we paid about $100,000 per job on the credit card to corporations.
Republicans feel free to cut 200 billion in government services. And moderate Dems just gave the military not less than they asked for but actually more than they wanted. Which means they just weakened their position to maintain services for the community but handed it to the military and forever wars.
They didn’t even try to get coats down because of the tax cuts. Stop voting for these moderates who call this a bipartisan compromise? Total nonsense.
11
If unemployment falls and wages don’t increase, there must not be any pressure on employers to compete for workers. What does that mean for workers? Are they powerless in their relationship with employers? Has work been redefined as not something that includes benefits or security?
7
I wonder what the impact the internet and websites like Indeed had on the unemployment rate now workers and easily find a job.
3
How much of our workforce is engaged in gigs? I feel uncomfortable counting such as 'employed' in the classic sense of a living wage job with benefits and retirement security.
23
From a perspective of mathematical curiosity, I'm looking towards negative unemployment rates (more people working than the labor market was assumed to have). That would make for a fun headline.
11
@Alexander
Kind of like negative interest rates, which has been the direction of Fed policy since the financial crisis. Quantitative Easing 1, 2, 3 and now 4, with the Fed injecting $100 billions into the repo markets every month. After years of injections, liquidity problems still persist? There are now some $17 trillions tied up in government bonds paying negative rates (Japan, Germany, Switzerland, etc). Would you loan a friend $100 if he promised to pay you back $90 next month? No. Liquidity freezes up. The velocity of money (how many times a dollar changes hands in a given time frame) is at historic lows. The Fed is its own worst enemy, and its monetary policies are diminishing the role of the dollar as the world’s reserve currency, and ironically weakening our economy and our collective economic security, not to mention inflating housing prices beyond bound.
The problem is in what the Government is using to define the unemployment rate.
It has been tweaked over the years to minimize unemployment for the benefit of those in office. Further, it fails to take into account the changing nature of work that is often off the books or not cataloged by the traditional means.
The same has been done to the CPI to minimize the true measures of inflation to benefit office holders and to minimize the COLA increases mandated by law and labor agreements.
11
This article is correct to point out that we all need to reassess what full employment means. The fed is wrong to define it as an arbitrary number. The numerous responses to this article suggest that while we may be doing better, many people are underemployed or employed at low wages.
The FED has simply been wrong about how much employment represents full employment. It is quite obvious that the unemployment rate as viewed by the FED is not representative of the economy as a whole. We will all know when we get to true full employment when wages finally do go up, and there actually is some inflation. The trend is good, but we can do better. The FED would be well advised to keep interest rates low until we finally see some wage growth.
4
Average weekly hours in new jobs created since trump—23 hours a week. Most of the full time jobs go to urban tech related jobs.
Two jobs to pay your living expenses and a third to pay health care.
14
How many people have more than one job to make ends meet? These graphs and charts aren't looking at that. Or how much people are being paid.
14
@ana I’ve heard a lot about people that work three jobs and can’t pay the bills. I just don’t actually know anyone like that.
@John
It's possible that most people don't publicly discuss that they can't pay their bills.
2
The prime employment age is 25 to 54 years of age. Within this group 45%, or so, are low wage earners. This means that the majority of workers in America are not part of the middle class. And those above these low wage earners are best classified as downwardly mobile. They are scrambling not to fall into the morass of poverty they see below them. The recent SNAP rules will not bring people into the labor market. It will only increase hunger. This was the basic thrust of Thomas Malthus when he declared that society should not be supporting the poor. He said they need to be moved to work houses. Hunger is the best motivator for people to be encouraged to work. Not much has changed in 200 years it seems. Unfortunately, history has also proven that hunger is also an excellent motivator for violent revolution.
7
No, unemployment will NOT drop much below 3%. The authors put together a wonderful graphic with quotes marking some milestones over the last decade. They also supplied a brief text. Their major point was that in a decade unemployment has dropped from 10% to 3%, despite doubts that it could go that low. And they raise the question of whether it will continue marching down to zero.
The answer is no. The reason is that 3% unemployment basically IS zero, because at any time you always have about 3% of the workforce that is between jobs or unemployed due to the reasons that have little to do with the overall economy.
And another story was not told in the text. This story is that although the 3% unemployment is wonderful news the last decade has simultaneously also brought about a worsening in pay and working conditions for many Americans. Many of the commenters have provided some great testimony on this. So it's nice to have a job, but it is much better yet to have one that is family-sustaining and treats you with dignity.
Note one more thing. This degeneration of the job market helps explain how we could get a Donald Trump as president. Trump's razor-thin election was largely enabled by good people who were frustrated by the worsening of their economic status, and they voted for Trump in the hope that he could improve their lot. A Democratic candidate (Mike Bloomberg?) who would hope to unseat Trump will need to convince people that he/she will do better for them.
13
@Irondoor - Yes, and I don't think the promises of the "free stuff" or the attacks on the wealthy are going to work with this group, the group Democrats must win over. Again, these are not the "build the wall" people, they're simply people who want decent jobs so they can feed their kids and don't have to sweat the rent.
You mention climate change. Why not kill two birds with one stone? If I was running for president, my argument would be what we need now is hardly socialism but capitalism and more of it, because that's where our good jobs will come from. And we also need to fix the climate. But the way to do that isn't through denying ourselves, because that won't work.
The way to fix the climate is for us as the U.S. to reassume our greatness and get into high gear with inventing and manufacturing cool technology solutions for power generation and transportation. Not only will this fix the climate, but it will provide badly-needed family-sustaining jobs for millions of Americans. And we might even make a few bucks—and what's so wrong with that?
1
This is a fine chart, but it would have helped to plot the Fed funds rate against the unemployment rate, to show their response. (The funds rate isn't the whole story because of easing and other measures, but it's a lot of it.)
What all the grand moving graphs do not show is the percentage of pay raises for the average workers during these years. Wage growth in fact, despite some up and downs over the past several decades, todays real average wage (that is , the wage after accounting for inflation) has about the same purchasing power it did 40 years ago. And what wage gains there have been have been mostly flawed to the highest paid tier of workers. This from Pew Research. People who work yet have the purchasing power from 40 years ago are the hard working poor. We are talking about full time workers without benefits let alone any real leg up from poverty. Because if you are working full time in todays world of this country you are nothing more than a surf. And cut interest rate only help those who have money. Not the people who are a statistic of a good economy yet not enjoying it.
4
I think the model is flawed now. The labor pool is essentially infinite now in a global market. Thus there is no upward pressure on wages or inflation. Sure this is a 'shadow market' but its trivial compared to the global labor pool. Update guys.. the models are wrong.
13
@Derac
Your description of the situation should, in fact, be the new "model" along with Occam's razor suggesting the likely explanation is usually the simplest one.
1
Disgruntled Americans should be very careful about what they're being promised by Warren and Sanders. People looking for their old jobs again are going to have a problem. Time moves forward, not backward.
Warren and Sanders would like you to believe they can provide something our economy is not now providing. In fact, they could quite easily make things work by disrupting this economy.
1
The Fed is a joke.
Statistical metrics like these are anomalous to an actual 'Living Standard'.
1
Simple math would suggest that with the published unemployment rate going to lows not seen since the 1960's but with wage rates remaining steady and rising only slowly, that would have to mean there are a lot more workers out there in that 'shadow' work force that economists thought. This would mean, in turn, that how we measure the unemployment rate is flawed. Wages rise when workers are in demand, as will inflation, as all those extra dollars chase a constant supply of goods. None of that is happening. It's not the economic miracle on Main Street - it just means that the real unemployment rate is much higher than what is touted.
11
@Rick Morris This is correct, but as another poster pointed out, the "lot more workers out there" is really the entire global labor pool. This is what is suppressing wage growth, and its not just in manufacturing. While the unemployment rate may be flawed because it does not take into account the portion of the labor force not looking for employment, the global labor supply is a much bigger deal.
8
@MR I hadn’t thought about the global labor pool putting a cap on real wage growth. It makes sense. A guy making trucks for a living in Kentucky can’t continuously get a raise for doing the same job. Eventually he prices himself out of the global market.
It’s a strange phenomenon that puts republicans and democrats on the same side. Though they may not realize it.
1
Nevertheless, "initial claims for state unemployment benefits surged to 252,000 for the week ended Dec. 7, the highest reading since September 2017," the Labor Department said.
So what's really true? Does the 3.6% rate actually reflect full-time employment at a decent wage with good benefits. I'm not saying that the Trump administration has cooked the numbers, just that they numbers don't tell us much about the welfare of workers in our MAGA society. People can work hard and still have a marginal existence.
In the great trickle-down world, having a substandard job counts for employment, while 25% of the population goes hungry at some point during the week and can't afford medical care. There's something fundamentally wrong with the Republican economy, starting with the dishonest leader who's busy making America poorer again (following in the footsteps of Ronald "Union Buster" Reagan).
7
@Wiltontraveler no lame need to blame Trump. Obama gave us nothing more. The fed just cooks the books to prop up their sad dollar and make life sound rosy. American workers have it made compared to the most of the world they just don't know it.
Labor force participation is at its lowest since the late '70s.
When people stop looking for a job, they are no longer counted as "unemployed" and the consequence is a lower unemployment rate.
7
@Tempest
The current labor force participation rate is what it was in 1979.
It reached that rate on the way UP as more and more women entered the workforce. If we're back to that rate on the way DOWN it means fewer and fewer people are working.
We saw labor force participation rise drastically from early 1960's levels as families NEEDED two incomes and women went to work. Wages have stagnated or actually fallen behind the inflation rate since the 1970's.
So.... less people working and wages flat or declining in purchasing power. That's NOT good.
1
I have been a self employed theatrical artist for 22 years and been working in my line of the business for 30 years full time. I have had to pay for my social security and unemployment benefits. I have never once claimed unemployment. I have also had to pay for my own health insurance for 25 of those years. For me the "gig-economy" begin in 1994. I have no idea if i was ever counted in the employment statistics. What i will say is i am tired of all those who have complained about paying taxes. Try paying the taxes a small business owner or self employed person does then see what you think.
9
I have to ask why there are never charts measuring reality.
Certainly someone who designs these beautiful scrolling graphs can draft up a few charts that show the collapse of ecosystems and eclipsing Mother Earth's boundaries with the growth mindset in play.
Where is any measure that says STOP? and asks for a circular economy, stewardship of other species as our real work?
Full employment is a carnival trick when we are past the point of solving the climate crisis, extinctions, overpopulation and no direction to protect our fellow travelers in the plant and animal world.
Everyone is alive: rocks, rivers, the world was full of abundance and we have made it a wasteland.
Maybe I'm foolish to expect any different. At least here. The NYT has such a big stake in capitalism, there is little room for more than lip service to a greener more just world.
Off to talk with trees.
11
@Tim C
I couldn't agree more, and truly appreciate the succinctly stated suggestion you made.
The question is - How do we flip the script? - We rely on democracy no matter its quality, and we have been led by a mass of delusional devotees to an ethic conceived before humanity understood MICROBES exist!
Those of us who dream and plea and strive for a greener more just world, in your worlds, are viewed as dreamers.
As you said, this is reality - the numbers, the wealth, the right to exploit and destroy is the disturbing dream.
3
@Not that someone
Correction - words, not worlds...
1
Full employment is all the people that want to work, not all the workers.
5
The worker participation rates is a far more instructive index for policymakers than the unemployment rate. Many developed countries have higher worker participation rates than the US and LOWER rates of inflation. (See Paul Krugman's most recent column on the French economy.)
Only people from the US financial industry get appointed to the Fed. This more than anything explains their myopia.
9
The "Gig-Predatory" economy is prevalent throughout our society (from 20 years olds - recent retirees). Yes, people are working, but often at 2 or 3 jobs from which they receive no health benefits, vacation, sick time, etc. One missed paycheck and the fear ending up on the street looms large given the steep rise in the cost of housing. This type of low employment rate coupled creates the an illusion of a robust economy. It's a sham. That's why a city like Seattle (theoretically enjoying full employment rolls) has approximately 16,000 people living on the street , some of whom are working - but they cannot afford a home of any sort.
48
@DK
I'm retired with a small pension and Social Security. My husband refuses to retire although he could.
Much of my post-work income is used to help our children with living expenses, since their jobs don't pay enough. We pay health care insurance for one kid. The other hopes not to need medical care.
On the surface, we may not look like a blended family, but we are. Funds for the retirement are being used to support non-retired persons.
When our generation is mostly gone it will leave those with sub-par incomes. It's then that we'll see exactly what misery has been wrought in our country.
227
@DK
Why don't run statistics as to how many jobs it takes one person to have inorder to be able to afford health care ad rental/housings costs? That will tell you the true meaning of those statistics
11
Setting aside the general narrative presented in the article about the health of the economy....
What the graph does clearly show is that unemployment has not improved notably since Trump took office.. in spite of all his bluster about how he has personally saved the economy and the workers of the US.
The graph DOES clearly show a huge improvement in unemployment rates during the tenure of President Obama.
And in fairness.... Bush handed Obama huge unemployment numbers and the worst recession since the great depression.. so Obama had a target rich economy to work on bringing back into recovery.
10
Seriously? The official unemployment rate is a totally artificial number that in no way reflects the true unemployment rate. Just ask any of the thousands of NYT readers over 50 that can’t find a job. They will look forward to hearing from you. And be quick about it.
34
Unemployment was low during the slave era, too.....but wages were deplorable.
What America needs is living wages, economic dignity for all, and much less insatiable Greed Over People.
Other rich countries have this....only America among rich countries disgraces its workers with feudalistic wages in 2019.
Shameful.
49
How does this article not mention the role of part-time and contract jobs in this picture? I was hoping for some analysis on that trend in conjunction with the data cited here. Anyone care to help?
5
There was a large cohort that had simply dropped out of the workforce. They were often excluded from measurements and/or their numbers were estimated.
The best part about this economy -- aside from the working poor's, especially Black and Hispanic women, seeing the greatest gains -- is the return of these work orphans to the job market.
2
The labor market is chock-full of low-paying, no health benefit jobs that people are forced to take because there is no alternative in the job market, as high-paying jobs with benefits are specialized. As an adjunct professor, I am one of those people forced to take an appallingly low-paying job which will never let me pay off my student loans (STUDENT LOAN FORGIVENESS FOR ADJUNCT PROFESSORS) or buy a house. And don't tell me to work in the private sector. I love teaching, I love the students and I love the job itself. What a sucker, eh?
24
@Mary Plus there's such value to what you do. I'm sorry that the education system treats you this way.
3
@The Grad There's value in what you do and that's what "they" are afraid of!
None of it can be credited to the DT presidency. Yet, ignorance and mis/disinformation will coalesce to keep Mr. T in the White House until 2024.
5
The unemployment metrics the USA uses are garbage. Half of people who don't have jobs are not looking for one because they are being taken care of by somebody else or they are on disability.
I can't tell you how many able bodied young adults I see that would rather live at mom's house and play video games rather than go to work.
1
@Diana I've seen some of that, but I've seen energetic teens work their way up to management positions and then get laid off and give up, and I've seen skilled workers able to draw 20-25 bucks an hour being pushed to the sidelines because employers can't forgive the Dukes of Hazzard lifestyle they used to pursue but have given up.
2
Let's see now ... in October 2009 the unemployment rate was 10% ...
In November 2017, when Trump was elected it was 4.7% ...
Currently it is 3.5% ...
Hmmm ... who do you think should get the most credit ...
5
@Steve of Albany I agree with you, Barack Obama should get all the credit!
1
A generation of greed. A generation with no compassion. A generation of insecurity. A generation of death.
2
Here are some more numbers for you:
1. An individual would have to earn less than $16.67/hour for 20 hours a week to still qualify for Medicaid under the new Medicaid Work Requirements.
2. There are plenty of those jobs to choose from. Would you like to be an Overnight Stocker at Sam’s Club? Part-time, $11.50 an hour, from 9:30 p.m. till 6 a.m.?
3. Or would you prefer to work normal school hours, Monday-Friday, as a paraprofessional for $10.25/hour, 9 a.m. till 3 p.m., making it difficult to work a second or third job, which you would need in order to pay for luxuries like food, shelter, and child care, since the Requirements say you cannot be a stay-at-home parent for any child over the age of 6.
4. Or would you care to work on a local assembly line, $12/hr, where each Friday afternoon your supervisor still hasn’t told you if you have to be back on the line at 6 a.m. Saturday morning. If you complain and encourage your coworkers to stand up for themselves, you’re fired for trying to “petition,” which along with “union” is a dirty word in Republican country.
And you don’t have to dig too deep to see that jobs with low wages are often found in the worst (best?) industries for sexual harassment. A simple internet search yields study after study faster than you can say Pull yourself up by your bootstraps.
242
@Snow Day None of these were problems for me growing up. First job was .57 1/2 cents an hour, NYS minimum wage, worth $5 and hour now. Medicaid or any other kind of healthcare was not a problem, it was all cash out of pocket. Knowing about working Sat. wasn’t a problem, every one worked every Sat. Child care wasn’t a problem because there weren’t many jobs for women. In my father’s generation when woman teachers got married she was laid off.
@Snow Day keep in mind what you are proposing (raising minimum wage or whatever) is not a solution, it’s just make poor people from some other country do the low wage work we don’t want to do. It’s like passing the misery and suffering onto someone else.
That being said, in 1850 the USA was the cheap manufacturing hub that China is today. Maybe this is a necessary part (sacrifice) of industrialization.
1
@Richard So are you saying that things were better when you were growing up? While paying out of pocket for medical expenses might be feasible for simple problems, what about the kid with cancer or the one injured in an accident. As for mothers’ staying home, it was unfair to force women who wanted or needed to work out of the workforce.
3
A booming economy only means more income inequality.
Business is thriving while labor stagnates. Had wages kept up with profits and productivity since Reagan first cut corporate taxes, the minimum wage would be around $45.
Congress works for the donor class, not the people who ordained and established the Constitution.
Mandatory public campaign financing is imperative.
17
"...job gains would soon slow and wages would rise much more quickly. But they didn’t."
Un-budged since 2009, the federal minimum wage is still $7.25. Many states are just a few dollars above that and will be in 2020. While the Fed may have lost faith in full employment, it's the American worker who has lost faith in the Fed. In health care alone, the yearly cost of health insurance for a family of four is equal to the price of a new Honda Civic. And the GOP tax cut went to the wealthy and corporations.
It's not longer a loss of faith, but a loss of direction in Washington.
10
@jmilovich "It's not longer a loss of faith, but a loss of direction in Washington."
Indeed. The political system rushes to satisfy the whims of the donor classes. Their wish-lists get full and immediate attention. When it comes to addressing the needs of the broad mass, the mantra changes to it's either too expensive or not the proper role of government.
5
The money continues to aggregate at the top, leaving the working poor with little if any upward mobility, trying to get in as many work hours a week, in many cases well under $20 an hour. As Chris Hedges and other commentators have pointed out, the statistics are not accurate with so many people not counted based on their system.
6
Fascinating article on what is rightly called "the Voodoo Science."
Is anyone looking at the numbers of people over 65 who have re-entered the labor market in the last 3 or 4 due to rising costs and the failure of Social Security to keep pace with the COL. What impact do they have on the rates?
When we've finishing celebrating the low unemployment numbers, could we take a look at the formula for measuring the COL and perhaps adjust it to 21 century purchasing habits.
5
What's the full employment unemployment rate? Ignoring the double think in the question, it's whatever policy makers want it to be to serve whatever other agenda they have.
Trump has little or nothing to do with the stock market overall. The gyrations perhaps are his doing because of his scattershot tariff policies but the growth is its own animal. In fact, if the current administration was reliably consistent in its ministrations, we would probably be further up the growth scale.
1
@NOTATE REDMOND How many ppl close to him make investment position knowing what he will tweet? The induced market gyrations are intentional, and profitable if you have advance knowledge...
8
Most republicans believe the impressive performance of the economy is due to Trump and they blindly give Trump the recognition for this success.
And that is absolutely wrong. Because Trump did absolutely nothing to the economy, for it, to be a success. Absolutely nothing.
The two trillion tax cut to the rich did not produce the effects that were expected. The rich kept the money.
The tariff war, the only noticeable executive decision Trump took, pretending to show himself as the "genius economist" only brought missery and dispair to large sectors of our economy, specially the farm industry and the farmers of america who now are filing for bankruptcy.
I am still waiting for a republican to tell me WHAT EXACTLY Trump did to the economy for it, to be a success. NAme the programs he enacted to improve the economy and if Congress pass that as legislation.
9
The Trump economy is booming, unemployment is at record low levels for all races, inflation is well under control, and Democrats, liberals and progressives are wringing their hands in despair, desperately hoping and praying (well, maybe not praying) for a recession, or worse. They now know it is their only hope to defeat Trump in 2020, especially since their
two year old partisan impeachment fiasco is currently blowing up in their faces. This is fun to watch.
3
@paul Not sure why you'd look at a graph that shows a steady trend starting in October 9 and refer to it as the "Trump economy". Moreover, lack of raises to those that are already employed and the types of jobs that are being offered tell a different story about the economy.
16
@paul
We all know that Presidents have little to nothing to do with the economy. In this case we know that Trump has done nothing to affect the economy. Presidents take the credit for a better economy, and suffer the consequences when the economy falters. In the case of Trump, he takes credit for the lies he perpetuates, a sad reflections of his narcissism.
3
The real question isn't whose working, but whose benefiting.
19
All this employment is fantastic. I know people now working two, three and even four jobs to make ends meet. Thanks President Trump!
39
@Randall
Exactly my thoughts! If the economy would be great as the media is announcing, you would not have to have two full time income in a household to make ends meet! An individual that is working all this many jobs for meager wages is being counted three times if he/she has three jobs. The numbers are really skewed! Like Mark Twain said: "Facts are stubborn things, but statistics are pliable". All of you that are working multiple jobs as I am actually doing may agree with me!
8
@Randall
You got that right
1
Top level meta-numbers like the federal calculation of unemployment are fine for guiding policy.. but they are worthless beyond that point.
Why?
1) Just read the comments here from people who have stopped looking and dropped out of the job market.
OR... 2) look at the proliferation of part time employment by corporations.. because it allows them to cut costs on benefits for employees.
OR... 3) just look at the hiring practices of companies for skilled labor.. where they would in many cases rather poach an already employed worker from anothe company (and will pay a premium to do so) rather then higher clearly skilled candidates whose only shortcoming is being currently unemployed.
OR... 4) quiet discriminatory practices by companies.. where they cannot for example discriminate on age.. yet can and will find stealthy ways to do exactly this.
Number 3 is probably the most egregious of company practices to be honest.
20
@Chuck My former boss followed #3 to a tee. He wouldn't give anyone a decent raise (even a COLA adjustment) if they were currently employed by him. He'd tell you to come back and talk to him if you got another job offer someplace else for more money. Many people did, and then he'd offer to match it. Most people quit anyway. You shouldn't have to quit a job to get a raise or even be paid a fair salary. Our turnover was 1/3rd year over year...but you'd never convince him it was a problem (even though it was massively disruptive).
1
Economics is the dismal science, bereft of explanation of fact much less consistent theory of valid prediction. So we're in Terra Incognita. It won't motivate a change of thinking until the peaks and valleys are in survey and the lot lines properly shown. We camp in a land where the current generation can hardly make sense of what led us here much less whither we ought go. The council fires show faces drawn tight against the night, masking the rage of war that threatens with dawn.
The only thing of certain is the inflated value of thinking one is right and the other wrong. It is hubris against the God of Abraham that says we should love one another. Tough love is in order to question the shepherds' school to find a fertile graze and safe path. No recession in sight but the very foundation of the extractive economy is not sustainable. How long do we have before doomsday sets us free from conventional thinking?
2
There is controversy on how the unemployment rate is calculated. Knocking on doors/phone calls of 60,000 people each month and yet maintaining the minimum statistical quotas is impractical. Just because it's reliable does not mean it's valid.
3
Meanwhile the homeless rate and national debt are heading the opposite direction.
28
The problem with the "dismal science" is it is not really science.
Neither the Fed nor any other group of economists can do a prospective double blind controlled study to assess the effect of any intervention, e.g. raising interest rates.
All they have is "retrospective studies" but conditions in the past are never held constant.
The other problem is defining the variables, the forces they study. Is a man who has stopped looking for work unemployed or simply happy to allow his wife support him? If he goes back to work, is he then, retrospectively, a would be worker?
One thing you can see from this data is the booming economy for which Trump claims full credit daily has little or nothing to do with him.
One of my neighbors, a Democrat, told me, "Well you have to give Trump credit for the tax cut prosperity."
And this man is a Democrat!
10
@Claudia Tell your neighbor to look at the historical trend of employment. Employment has been rising at essentially the same rate since 2009. That's long before Trump's tax cut. That's back in the days when Mitch McConnell said his job was to make Obama a one-term president. He tried doing that by smothering every stimulus project that Obama and other Democrats came up with. That slowed things, but the economy kept growing. Tax cuts aren't the elixir that many believe.
20
@Claudia
It is a science, just an inexact one. The very fact that data are being used to update theory makes it scientific.
Perhaps you mean that the predictive power of macroeconomics is often poor. No doubt. In addition, some economists work as shill for their political masters and they fail to separate their positive and normative statements.
Still, the theory is often useful. Keynesian economics in depression conditions was an advance in human thinking.
4
@vbering Having studied the “hard” sciences: Economics is really not a science. Sure, there’s data, but there are no overarching natural laws to be found: it’s all fundamentally predicated on human behavior and how humans value essentially random objects (gold, salt, fiat currency). Go back in time to 5000 BCE and economics will look very different. The laws of physics won’t.
6
So "employment" is near "full" yet nearly 50% of American workers say they cannot afford an unexpected $400 expense. That takes the shine off they types jobs being filled. They are low paying jobs that people only take because they need something - anything. And maybe two or three of those to make it. And most of those are probably not really full time, not regular hours, and no benefits. Not exactly encouraging.
61
How much we can we trust these unemployment figures? Especially over the last three years or so.
Gonna be interesting when some whistle blower reveals how much political influence is being used to generate these numbers.
5
@Cerad
Government statistics have been manipulated since the early 1980's when both parties found out it was easier to fudge numbers than deal with real problems.
REAL unemployment has been over 20% since 2009 - see shadowstats.com
Don't expect many whistleblowers on anything. Look at the way bearers of truth are treated.
I don't think economists and the Fed have necessarily been "wrong" all these years. Historically, the 5.1% unemployment rate being the level at which employment was considered "full" and negative consequences would soon be on the horizon was accurate.
Perhaps what economists should study and readjust their models is how the steady implementation of anti-union laws, extremely pro-business Supreme Court decisions, and the strengthening of so-called "right-to-work" laws have allowed the unemployment rate to continue to drop without the corresponding raise in compensation and inflation which basic economics tells us should happen.
-Nathaniel Wheelwright
11
As many have mentioned these number don't tell anything close to our real story. I'm sitting here doing a job that I'm unqualified to actually get promoted to. Unless I take out a loan or half of my life savings, I cannot afford to go to school outside of 1-2 classes at a time. Everything needs a degree and they are less and less affordable each year. I want a house, more kids, but it is just not attainable without funneling multiple incomes together across generations of family members. I'm not sure who is "set" in this economy, but I haven't run across that person yet. Would love to ask him/her for some advice tbh.
7
@Omni You don't need to ask him/her for advice--the answer for the vast majority is that they were born wealthy.
2
Could we finally please just tear up the old econ playbook? Send the theories of Milton Friedman, Gary Becker and so many more to the dustbin of history? They were wrong during their heyday and they remain completely wrong. Their terrors over inflation, which apparently they didn't understand at all, were wrong, their fetishization of free markets turned out to be nothing more than banditry.
It's important to remember that failure to predict, in other words to have a good theory, hurts people.
15
Didn't Trump say that we should ignore the official unemployment rate because it counts gig workings, underemployed and the discouraged. Gig workers don't get unemployment, so if they stop working, they still don't count as unemployed because they never show up for unemployment benefits.
On the other hand, if you are working but cannot afford food or medicine, who cares what the "unemployment" rate is.
27
The unemployment rate among older workers continues unchanged.
Discrimination against older people wanting to be in the workforce is unabated, ignored and ubiquitous. Older people needing income are expected to go off quietly somewhere and starve.
It's against the law, makes no sense from an experience or productivity standpoint, yet companies continue to shun these workers.
37
@Shar Indeed, makes no sense. Perhaps until you consider out of control healthcare costs: the older you are the more likely you'll cost more due to preexisting conditions and requiring family coverage. I personally think this is a major factor why wages have stagnated and older workers cannot find work. Its cheaper to hire youth.
3
@notaNCAAFan Solve that with Medicare for all.
1
@Garlic Toast
Or Medicare at 55 to start.
5
The labor participation rate is 63.4% which is very low and hasn't budged for several years. While that number includes many that are not employable, the fact that it hasn't budged is troubling. Also, the U6 is 6.9% and and shadow stats long is 20.9%.
4
Whew, I was worried for a second because I need a full time job and a "side hustle" just to pay my rent each month, but it turns out I don't have to worry cause this line graph says the "labor market is healthy."
Now if only someone would explain to me how to pay for groceries with a healthy labor market, that would be swell.
60
This graph was great, but I'd like to see the fed rate on the timeline as well.
2
That we live in a country where the median income for a family of 4 is $55,000, that we live in a country where 50% of people don’t have $1000 set aside in an emergency fund, that more than half of those nearing/reaching retirement age have less than $25,000 saved for their ‘retirement’ and a significant portion of those, less than $1000 saved for retirement, speaks volumes about just how well we are doing as a country. Medical bankruptcies are up, and the social safety net under constant attack now. 1 in 5 children go to bed hungry in the US. One does not have to look too far to see that our economy nearing ‘full employment’ clearly doesn’t work for everyone. Unfettered/unbridled capitalism does not work, and until we recognize capitalism requires constraints and regulation addressing the public good, the figures I cite above will only get worse.
131
@Lynn
I understand how hard it is to "manage" one's money when one lives hand-to-mouth, but at some point it becomes necessary to look at how personal responsibility factors into it.
Life has never been easy for people. To get ahead, one had to really hustle. If that meant working several jobs, so be it. People just did what they had to do.
It's terribly misleading of Warren, et al, to tell Americans they are someone being cheated and would have much more if only they could get their hands on someone else's money.
People will have what they, themselves, can earn. Nothing has changed in that regard.
1
@Lynn
Perhaps your comments could be illustrated by the fact that the average wealth in the U.S. is 7 times greater than the median wealth, surely a mark of inequality. The same ratio is 2.5 for Canada and 2 for both Australia and Japan. These figures help to explain why the typical American family does not feel they are benefitting from "full employment". The money is going more and more to the top.
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@AACNY
yes, personal responsibility counts. But when the game is rigged and the playing field not level, can you really blame one team for losing?
10
The low jobless rate is only half of the improvements in the labor market since Trump took office. The other crucial part is who is finally benefiting from the upswing: the workers in the lowest portion of income. For the first time in a very long time their real income has been rising at a significant rate. Moreover, black unemployment is at historic lows.
Likely, pressure to reduce immigration has made this possible, since a great proportion of immigrants today -- especially "undocumented" immigrants -- occupy this lower rung of income. Since the law and supply and demand applies even to labor (who knew?) wages must go up when the supply goes down.
If we might only restrict immigration more, we'd see an even greater benefit for American workers in this category.
3
@frankly0 The very small Improvements in lower income wages appear to be more closely tied to states that increased the minimum wage than anything else.
19
@frankly0 "If we might only restrict immigration more, we'd see an even greater benefit for American workers in this category."
Yet businesses STILL say they have a hard time getting QUALIFIED workers. How do you figure that? Millions of jobs are unfilled because workers are UNQUALIFIED. The upshot is that we need MORE immigration, not less,. The American worker is aging out of the workforce. There are only three ways to have more workers 1) retire later (but only add a few more years) 2) Have more babies (but wait 18 years!), 3) allow more immigration. Guess which is the easiest, fastest and most effective to implement?
7
@frankly0
Care to share your stats about real wages rising for the lowest income earners?
5
When will these types of measurements change and reflect how Americans are actually living?
This tells us nothing about how hard Americans are working, struggling to keep the lights on, food on the table, and medical bills paid. Don't even think about paying for college or retiring before 70.
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@Kelly Don't think about having kids either.
Lets be clear here.
The Fed cut interest rates 3 times this year because president Trump pointed it out to them, loudly, how wrong they were in having raised rates while inflation was still below their target and the economy still had more room to grow.
That is it. The president, and the president only, as he was the sole voice, made the Fed correct its errors.
If it were not for Trump the Fed would have prevented maybe 2M Americans from getting jobs, and maybe even drive us into recession.
@Baron95 "If it were not for Trump the Fed would have prevented maybe 2M Americans from getting jobs, and maybe even drive us into recession"
Probably a wash since Trumps tariff policies have been proven to eliminate jobs. With no end in sight.
Not exactly a genius.
12
@Baron95
Trump is also the "stable genius" who loudly declared, in every quarter of every year from 2009-2016, that all of President Obama's job numbers were phoney. But now that HE'S President, the job numbers, like his infamous July 25 phone call, are "perfect".
"Believe me" - if the economy is OK right now, it has NOTHING to do with Donald Trump.
It is interesting to see comments from conservatives that tout this economy as something that Trump is responsible for--even though the unemployment rate was about 4.7% when he started with solid growth. Every single one of them completely ignores the increase in the deficit which is back to a trillion dollars. They also ignore the 4-5% guaranteed growth Trump promised. Beer googles.
With low unemployment, the deficit should be close to zero. Now it is an insoluble problem at over 23 trillion.
It is a simple mind that can't see the forest from the trees in this deficit bubble economy. The debt is rising much faster than the economy can service it. The next recession is going to be a doozy.
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@glennmr
excellent comment.
personally I dont believe these statistics:
- largest trucking company went bankrupt last week
- yet, another article speaks to huge shortage in long distance truck drivers.
- the Carrier plant did close
- GM Lordstown closed
- foxconn never did jack win WI
- numerous large companies announce job cuts (Ford, GM, BMO, etc)
- some 21,000 retail stores have closed in past couple years
- some companies (tech) have 50,000 open positions or more. can't get qualified workers
- household debt is higher than pre-recession, with the new added bogey of student loans. also credit card debt is now higher than pre-recession.
something doesn't add up.
unfortunately for me, I don't think we can trust bureau of labor stats anymore. remember we have an administration where every single current and most former cabinet members are liars. are they cooking the books?
19
@glennmr
You just put a bright light on...... the nature of politics.
Politics in the modern US is very tribal and comes from the most primative parts of our brains.
One could almost say it is a mindless death spiral for the nation if politicians do not drop the tribal warfare and get back to actual compromise based negotiation and legislation.
2
@glennmr I think you mean debt, not deficit, re: 23 trillion.
Am I the only person surprised by how frequently our 'economic experts' have been surprised by our economy in the last decade? It doesn't give me much faith that actually have a clue what they're talking about.
17
@Lauren
I think it was it labor leader George Meaney who said, "Economics was the only profession in which one could rise to prominence without having once been right", and George Bernard Shaw who proposed, "If you lined all the world's economists end to end, they wouldn't reach a conclusion."
6
"Full employment" means nothing if you can't sustain yourself on the wages available. I've met people in my neighborhood who were fully employed but living in tents down by the railroad tracks because they couldn't afford the rents here.
African-Americans were fully employed in the South before 1865. Not a single one was idle.
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@Martha Shelley
Just saw a TV news story in which a US postal worker (!), a mail deliverer, was living in her car because she could not afford an apartment in her area of CA. I know people CT with a full time job and a part time job and still, they need to visit the food bank several times a year.
3
@Martha Shelley I have a suggestion move. We have 49 other states many are more affordable and provide the same paying jobs. No one has a right to anything in this country. We moved out of nyc to New Mexico. We did not complain we simply looked at the math and did the responsible thing.
Finding skilled and enthusiastic workers would be no problem at all if employers and recruiters gave up their age bias, and if companies insisted on creating cultures friendly to all ages.
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@Elaine
AND.. stopped ignoring perfectly qualfied candidates who are unemployed... and instead... poaching qualifed candidates already employed... from other companies.
I have seen this behavior for years now.. and it is insideous. Companies simply assume that if you are unemployed, there must be something wrong with you.. so they pay a premium to poach an employed worker from some other company.
4
@Elaine It's a national disgrace, the unspoken and unacknowledged blight of age discrimination in American employment. It's guessed like as said about and as happened to John McCain, as one well paid do-nothing political hack said, they're all going to die soon anyway.
So Trump and Mnucin were right.
Thank you to both Obama and Trump for bringing the economy back. I just drove cross country and even in smaller towns places like Starbucks were offering hiring bonus. Employment signs for oil and other industries were on billboards. Even mechanical cleaners. If you look closely at the numbers wages are starting to grow too. I don't care whom is POTUS this is all great news, but it does make me question the necessity of the FED. They've been wrong one too many times historically and have crashed our economy in the past. Let's keep this going. Close immigration and it will force employers to pay better wages.
4
@Location01 That is certainly a far better description than what we usually hear, where partisans want to give credit exclusively to their party. I think neither really deserve credit because politicians don't have as much influence over economic trends as we think. However, if one insists on doing so, I'd agree you have to give credit to both the current and last Administration.
2
@Location01 And then you take into account that most of those jobs you saw advertised do not offer livable, long term wages or benefits, and also the two NYT articles today regarding the oil industry not performing as well as its prospectors expected or touted - some filing for bankruptcy, etc. Layoffs all over the country in various different industries you wonder why these "unemployment" numbers don't seem to reflect the realities of a great deal of American working-age people. Presidents SAYING that that the economy is doing great just don't make it actually so.
Could it be "Mission Accomplished" all again?
@Curious One I live now in New Mexico you are so far off it’s incredible this state for the first time in a long Time has a surplus that’s going to provide free college education. You live in an unaffordable bubble of course if you stay in nyc and make $15 hr you will live in poverty. Here you can buy a house with 3percent down for under $200,000. For a family this is completely affordable. Today they had gvt hirings same day 1,200 people showed up. Maybe perhaps the problem is in fact people that sit in unaffordable states that require 6 figure salaries to live with an unwillingness to move to somewhere that the dollar goes a lot further. Americans need to up and leave these ridiculous unaffordable states.
Boomers are retiring....jobs are there as a result. The changing demographics are a large part of this change even if many boomer continue to work.
https://www.forbes.com/sites/forbesfinancecouncil/2019/09/03/retirement-trends-of-baby-boomers/#54e2bb327378
6
This just goes to provide more support for the arguement that ECONOMISTS are not scientists of any form and they should be treated like the pseudoscientific charlatans they constantly prove themselves to be.
I also appreciate how they stated that they had to increase interest rates to prevent workers wages from rising!!! They haven't risen in decades maybe it would be time to let that happen? Or maybe we should just wait for them to destroy the economy again and then they can tell us how lucky we are to have jobs at all.
13
Employment trends are good, it is silly to pretend otherwise. However, there is a big problem with many interpretations of the trends. Everyone wants to give credit to their favorite politician, when in reality, demographics seem to be the major factor.
https://www.bls.gov/emp/graphics/2019/annual-growth-rate-of-the-population.htm
Job growth has been the same during the last decade (2008-2018) as the decade before (1998-2008), however, labor force growth declined by less than half. It is a lot easier for folks to get a job when there are fewer applicants.
Now of course Trump wants to claim credit for the low unemployment rate, but it's mostly a function of the first wave of baby boom generation hitting retirement age a decade ago. Is Trump going to take credit for changes in fertility patterns in the 1960s?
7
Let me get this straight. We're worried about "pushing wages ... out of control" when there isn't a single state in the union in which a full-time worker making the federal minimum wage ($7.25 / hour) can afford a two-bedroom apartment at fair market value. I'd love to see this chart of unemployment placed side-by side with a chart of income inequality over the same years. Powell's right: this is not truly a "hot" economy: "We can sustain much lower levels of unemployment than had been thought. ... To call it hot, you'd want to see heat. You'd want to see higher wages."
48
Wow that graph sure looks like a great advertisement for President Obama
30
The way federal employment economists measure unemployment is false. We need to find a way to measure employment and income together, taking into account how that person gets and pays for healthcare. $15 per hour at 40 hours per week, with a $6,500 per person out of pocket per year for healthcare, is not full employment. It's subsistence living with an annual chance of bankruptcy. Many people economists are counting as employed aren't anywhere near $15 per hour and have no healthcare. Lies, damned lies and statistics.
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@ws if Americans pay 6,500 per person a year on healthcare, and you deduct that from our income, we still make significantly more money per capita (nominally as well as adjusted for purchasing power) than the vast majority of european countries that the left promotes as perfect economic models.
Full employment is a traditional economics concept. Al it is suggesting is that in a free market economy, the traditional rate of employment thought of as 'full employment' is about 5%. Some econ textbooks have it a little higher, some a little lower at 4 or 4.5 %.
The point is that at again, at 'about' 5% the economy as a whole is at full employment. The 5% represents those who have temporarily dropped out of the job market, are in between jobs though not currently employed, have lost their jobs and given the fact that the job market is so strng, most likely will become re-employed within a certain short range time frame.
It is an indicator, not some capitalist scheme to hep the 1%.
What is the point of this 'article'? The job market is strong.
Why is it that when the jobs reports or employment numbers are good under a Republican administration, all of the sudden the same indicators used for decades are suddenly suspect?
The 5 % unemployment is a baseline and does not drill down to look at unemployment for certain demographics.
Those with an education typically have higher wages and employment than those with no education. That is a free market economy. This 'article' is misleading and pointless.
2
@OldSchool
More importantly, small business optimism is strong. They are the largest job creators so this is significant.
Listening to Bloomberg Radio, I'm always struck by the pessimism of the reporters compared to the optimism of the guests.
1
@AACNY
Small business is strong? Really. I'm seeing lots of empty storefronts - long term businesses that have gone under.
You're also seeing more and more consolidation - bigger businesses buying up smaller ones to get more customers and then cutting overall staff.
It seems to me that this exposes a problem with the shallow, isolated usage of the single statistic we call the "unemployment rate". A 3.5% unemployment does not mean that only 3.5% of people are unemployed. To be counted as unemployed you must meet a very specific set of criteria.
A companion statistic to look at is the labor force participation rate, which remains below what it was during the 1990s boom.
Yet another number to look at is the "under-employment rate", meaning anyone who has a job, but the job is one they are overqualified for. A 50-something who is aged out of a career position and takes a temporary job at half the salary is "employed", but it is not a good situation for that worker.
We should be evaluating a set of related statistics, not a single number that is incapable by itself of measuring the health of employment in the economy.
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@Roger ....thanks for your insightful comments.
5
@Roger exactly! I've been waiting for someone to bring up these points
5
@Roger
Well put! I was about to make the exact same comment. The unemployment rate by itself presents a woefully incomplete picture without both the participation rate and, equally important, the under-employment rate. I wish this newspaper would start reporting these figures every time an article mentions the unemployment rate.
5
Hmm... So with things like non-compete agreements and lobbying groups suppressing [minimum] wage hikes we have amazingly low unemployment with very little wage increases. Setting inequality aside for a moment, I would like to ask where the pressure is likely to release? With labor market forces putting upward pressure on wages and politicians/corporations suppressing these market forces, something has to give, but what?
9
Of course unemployment is down. People need two or three jobs to get by.
181
@SpaceCake Funny, but that's not how this statistic works whatsoever.
3
@lol
Correct me if I’m wrong but I believe each “gig” is counted as one employed person. So @SpaceCake represents three employed persons in the employment rate.
6
@lol , please explain.
To the Times: I'm curious to know how, or even if, gig economy workers are counted. Is a person who drives for Uber or Lyft counted as employed or unemployed or not even counted?
8
@Prodigal Son
Gig workers are counted as employed.
The relevant survey question asks whether a person had ANY paid work during the reference week. So, if you drove Uber for 10 hrs., or whatever, during that week, you are counted as employed.
It's mind-boggling that anyone thinks that the employment rate as calculated in this way is still a good indicator of the strength of our economy. Forty years ago, maybe even twenty years ago, "having any paid work" mostly meant that someone had a full-time job that paid the bills and included health care benefits.
Today, it means almost nothing at all. Millions of Americans are doing odd jobs here and there, and haven't had a regular, full-time job in years. Many have given up even looking for full-time job and, as a result, are not counted as unemployed, which further skews the unemployment rate.
By some estimates, there are up to 70 million gig workers in the US. All of them are counted as employed. I am waiting for the day when Uber, Lyft, and the trucking industry automate their cars, which is still some time away. But when it finally happens, the unemployment rate will look very different.
16
@Prodigal Son
They are counted as employed.
What are the metrics on underemployment? On households where the primary breadwinner is, say, a schoolteacher and fits sneakers at the Foot Locker evenings & weekends? What percentage of those employed are underemployed? Anyone know? Anyone care? Crickets.
35
Labor Myths
#1 - Unemployment is low.
False. People who have given up looking aren’t counted.
#2 – Businesses can’t find skilled workers.
False. Businesses look for “dream” workers who
already have an exact and very narrow set of skills.
Workers who would do just fine in the position are
deemed “not a good fit” for bad reasons – i.e. because
they haven’t previously used a company-specific piece
of software that they could learn with two weeks of
training.
#3 – If you want a job, you can find one.
Misleading. If you want a part-time job with no benefits
and can survive on $10,000 a year, sure, you can find
a job. There are lots of jobs that don’t provide a livable
annual salary. A colleague of mine moved to CA
because in his home state, after much searching, the
most he was able to cobble together were three gig
jobs for a total of 25 hours a week! Sure, he was
working, but he wasn’t making a living.
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@Heather
This is exactly my thoughts about the little hands trump economy. How is a full economy calculated when people need more than one full time job to support their family (one or more people).
30
@Heather
1. Even if you include workers who have given up looking, the unemployment rate has fallen. Peaking at near 17% in March of 2010, this measure of unemployment has fallen a current rate of 6.9%. Unemployment has fallen across all measures of employment.
2. This statement might be better recast as "Employers don't want the expense of training new workers." Over the past 30-40 years, many employers have shed their training programs: 1) to save money, 2) to stop training workers for their competitors, and 3) a desire to hire workers who can be instantly productive.
3. This point is at least partially true, but the need for workers cuts across all job skill levels and not just the unskilled. While wages for unskilled workers have been rising, it remains true today - as it has in the past - that it is hard for unskilled laborers to find jobs that will pay a living wage.
10
@Heather Add to #2 - We made a mistake in turning to AI to source and review resumes of potential applicants.
19
Older folks on social security are returning to low wage jobs to survive and retirement aged folks are a booming and growing group. Quality of life declines. Communities loose their heart centers as the corporations gain all control. Buying a home becomes more difficult as interest rates rise when homes cost 20-30 times buying power of these lower income cycles. Rage and dissatisfaction rise. Gun violence increases in the frustration of terrible job options in most parts of the US. Population growth has perpetrated more pressure cooker like environments. Good Luck.
15
@Vicki Ward if that really representative of what is happening? If it were, median wages should be falling, but they aren't.
1
@ConsDemo I think you have it backwards. Vicki Ward’s point is that people need more than 1 job because a median wage job is not enough.
7
@PeterL The share of folks holding multiple jobs isn't that high and has been pretty constant for several decades.
https://www.advisorperspectives.com/dshort/updates/2019/12/09/multiple-jobholders-over-two-decades-of-trends-as-of-november
Good goad, here we are again with numbers that lie.
Look at the jobs available. Look at the jobs "Employed" people are actually working: multiple low-paying hustles--not gigs--cleansed of benefits and dignity.
My state will require Medicaid recipients to work for health care starting January 2020. The monthly reporting requirements are clunky at best. Many individuals with or without diploma(s) in hand who refuse to settle for poverty wages, misogynist, dangerous work environments, and zero benefits will lose health care as they search for sustainable employment.
Genius move, Republicans.
68
@Snow Day This almost was the case where my daughter lives in NH. She is newly divorced, was a full-time homemaker and has a young child at home. She wants to finish the degree she gave up when she got married. Full time college is required for financial aid. So full time college, 80 hours a month minimum wage work and being a single mom. Gratefully the courts shot this law in NH but they are pushing for it in NC where I live. This and reducing food stamps. Trust me suicide and child abuse will be epidemic.
The "gig" economy means many people were working therefore not "unemployed" but were/are making very low wages and at great risk to their long-term prospects.
We will have an entire generation without any retirement savings whatsoever. They will not be able to drive Uber when they're over 80. This is bad. Very bad.
42
@LEM
A lot of "gig" work completely escapes capture of the federal labor statistics though.
Further... it is fallacy to think that the gig economy gigs are designed with full time employment and a healthy income in mind. It works will as "filler" income for some people who have the time, the transportation resources, and enjoy doing it. It can very easily allow them to pay for a nicer vehicle then they could afford otherwise.
To think of a "gig" gig as your full time employment is to fail at employment for most people.
It seems to me a reasonable answer as to why there hasn't yet been a significant uptick in inflation in step with very low unemployment is that the nature of work has changed. With the gig economy the pressure is off employers to increase compensation. People are working, but not prospering.
20
The "unemployment number" is no longer valid as an indicator for how well the economy is working for the majority of Americans, therefore, it's not a good indicator for the economy overall. It's wages and the average paycheck those jobs pay that are the true indicators. Creating lots of low wage - or no wage, commission/tips based - jobs doesn't mean people can support themselves, or feel like they have any kind of security. We lost that decades ago, when Reagan and the Republicans, soon after followed by the Clinton Third Way Democrats, deemed "trickle down" was the way to go. Set things up to funnel wealth to the top, and it would accumulate and then flow down to everyone else. Nice theory, except that ignores the basic human instinct of rapacious greed.
Changing the system to gut unions and stifle collective bargaining, incentivizing short term profit taking and off-shoring to maximize profits and slash jobs and wages, enacting trade deals that put American workers at a huge disadvantage, all so that Wall St. and Corporate America - and their primary beneficiaries, the oligarchy - could reap huge gains, ended all connection between jobs created and the well being of the workers in those jobs. Even so-called "good jobs" are under-valued and under paid because employers hold all the leverage.
Until we roll back the "trickle down" mechanisms that drive our economy, "unemployment" is a bogus measurement for how well the economy works for Americans.
61
@Kingfish52
Unemployment rate has NEVER been an indicator of economic health in the US.
The economy is not that simple... and as such.. only a basket of well measured and analyzed data sets will give a broad measure of economic health.
Unemployment rate however is a main barometer to individual voters.. and as such.. it gets outsized attention from politicans and pundits.
7
@Chuck I didn't mean to imply that unemployment rate is a good measurement by itself. As you note, the economy is much more complex than one number can explain. But before "trickle down" was implemented, most jobs paid well, and so the number of jobs did indicate to some degree how things were going.
In today's economy, it would be more indicative of economic health to speak about the average wages that our jobs were producing. I'm pretty sure that number has been declining over the years, which is why people need to work 2 or 3 jobs. That sure lowers the "unemployment rate", but that's not a good thing for workers.
31
False premise. "Full employment" is defined in any number of college texts as being "5%."
That's clearly not intended to be taken literally -- it's simply a guidepost/rule-of-thumb for gauging the state of the economy.
Sheesh.
5
@Austin You hit the nail on the head. The NY Times likes these "how the experts were wrong" stories (as do other publications), but too often of late they've been founded on an incorrect premise about the experts' positions.
Sometimes the problem is taking one or a few experts' statements and erroneously attributing those to the group as a whole. Other times the problem is, as you note, simply misunderstanding or misstating the group position. And sometimes the problem is minimizing or failing to acknowledge that multiple expert views exist, as is often the case.
While these journalistic shortcuts are helpful in certain circumstances (for example, I don't think you always need to describe each and every minority view on a subject), they should be carefully applied in the "how the experts were wrong" context.
3
Thank you President Trump for continuing to shepherd our Country and It's amazing economy to greatness!
6
@patrick Actually, thank you, President Obama, whose stimulus policies put us on the road to recovery we continue to enjoy.
64
@patrick - a man that gives tax breaks to the rich, has a history of failed businesses is hardly a shepherd.
Thanks again President Obama!
45
@patrick
Especially increasing the deficit by over 60% to the trillion dollar mark in a couple of years even when the economy is great!
19
If only those jobs were ones that paid living wages and if only people had healthcare independent of employment status
259
@No name
If only society didn’t subsidize employer-provided healthcare by not taxing employees for this benefit.
I'm curious how much the sharing economy plays a role here (Uber, Airbnb, etc.). In the past decade, peer-to-peer networks have not only gained significant traction, but they have also fundamentally changed the way people seek and perceive employment.
12
@Kayla
I do not believe the federal data accurately represents gig economy employment.. which is largely considered part time contract work.. and can be easily missed in the normal flow of data from corporations.
2
None of this should be a surprise because nobody understands macroeconomics, but a lot of people pretend they do.
6
So a billionaire businessman knew how to create jobs while Obama etc. said it would take a magic wand.
Thank you President Trump for showing what is possible.
7
@Tim Obama's careful stewardship of the economy laid the groundwork for where we are today.
You should be thanking him, but you would never, ever do that.
47
if you look again at the graph, you will see the greatest drops in unemployment took place prior to 2017, alllowing that and effects due to DJT would be felf that soon after his election..... Lets give credit where credit is due.
8
@Tim I think you missed the clear information that most of the drop in unemployment occured when Obama was president. It went from 10% (thank you Bush and the Republicans) to 4.7%. It has only dropped a further 1.2%. The failure to raise the minimum wage may be a part of that. It is clear that 10% was too low when Obama took over.
Trump was a terrible businessman. He would be richer if he had just invested his Daddy's money in a market index fund. And we still don't know if he really is a billionaire.
34