Working Harder and Harder To Earn Less and Less
October 7, 2019 8:51 AM   Subscribe

U.S. adds 136,000 jobs in September, unemployment rate hits 50-year low - But is that telling the whole story? “ ...despite top-line job growth, the overall picture is clear: real wages are stagnant as corporate profits reach record levels, and price increases are eroding small wage gains for the 29% of American adults in the lower class and the 52% in the middle class. More pointedly, the Democratic presidential race has popularized a key finding of the Federal Reserve’s 2018 survey of U.S. households: almost 40% of Americans would struggle with an unexpected $400 financial emergency. Could any advanced economy claim to be “strong” with such an existential level of financial insecurity? How superficial is the recent U.S. quarterly job growth as the foundation for an ecologically sustainable, widely beneficial modern economy, countering dangerous trends of rising income inequality?” Ditch The Unemployment Rate (Sludge)
posted by The Whelk (30 comments total) 38 users marked this as a favorite
 
Strength is Relative
It’s important to put the jobs numbers into proper perspective.
In the household survey, if you work as little as 1 hour a week, even selling trinkets on eBay, you are considered employed.
In the household survey, if you work three part-time jobs, 12 hours each, the BLS considers you a full-time employee.
In the payroll survey, three part-time jobs count as three jobs. The BLS attempts to factor this in, but they do not weed out duplicate Social Security numbers. The potential for double-counting jobs in the payroll survey is large.
posted by robbyrobs at 9:01 AM on October 7 [30 favorites]


I feel like this was good timing considering my Ask thread earlier looking for a new job.

I keep feeling bad that I'm not earning more at my age, but it wages genuinely don't go as far as they did ten years ago. Even over here in the UK, the Tories raised the minimum wage, still well below inflation making it an effective pay cut. Campaigners pointed out that the minimum wage still does not match the living wage, which should be (I think) about £9/hr. What did the Tories do? Name the increase the Living Wage instead of minimum wage so the press could trumpet that they'd helped out the scum hard working families.
posted by Chaffinch at 9:11 AM on October 7 [4 favorites]


Considering how mediocre the previous jobs report was, this new one is so drastically better, it's hard to ignore a vague smell of books being cooked.

In any case, legitimacy of the numbers aside, any given month's numbers shouldn't even be released until the official revision a couple of months later.
posted by Thorzdad at 9:16 AM on October 7 [6 favorites]


The so-called Unemployment Rate is a shell game, and has been for years. DTMFA.
posted by Kirth Gerson at 9:37 AM on October 7 [9 favorites]


There is no evidence of any books being cooked with regard to economic statistics in the United States.

The preliminary report is useful as an early economic indicator, knowing that it is subject to some uncertainty.
posted by Pfardentrott at 9:47 AM on October 7 [5 favorites]


Don't forget they're doing rampant census hiring too. The last report was really crappy when you factored out the huge tract of census door knockers the government hired.
posted by msbutah at 10:11 AM on October 7 [2 favorites]


Dear The Whelk, I so enjoy the breadth and depth of your ongoing posts about class struggle. You are the Jonathan Gold of eating the rich.
posted by the_blizz at 11:08 AM on October 7 [16 favorites]


We should only ever have been publilshing the U-6 unemployment rate anyway. We know reasonably well the number of people who are without work, or are underemployed, or are working placeholder jobs for economic reasons, or have given up looking but want a job. That's accounted for in the U-6 rate. Currently it's also relatively low, but it's 6.9% right now.

That's the REAL unemployment rate.
posted by tclark at 12:00 PM on October 7 [8 favorites]


Why don't other countries seem to use the U-6 either?
posted by Selena777 at 12:19 PM on October 7


@Chaffinch: I'm very much in the same boat. I'd been intermittently employed on a contractual basis for years, and as of spring 2019, I've been unemployed. Been squeezing my savings and my (thankfully, due to generous bursaries and low rates for my income bracket) tax returns, which I had been putting off for a couple years, to get by.

At 26, making between ten and twenty thousand Canadian dollars per year felt like a personal shame. Now that I'm 27 and unemployed, I feel even worse. After spending months and months looking for jobs that all offer the same contract-based work with unreliable hours (if they even surpass 15-20 a week), I've really fallen into a melancholy and essentially given up. I don't know how to get out of this rut. I have a degree (history), but it's absolutely useless.

It doesn't help that all my friends who work in the government, or in programming, are telling me that their labour is being rapidly devalued. I heard that a couple baby boomers at my friend's workplace, making well over six figures each, were replaced by a single 20-something being paid 70k/annum. The hours requirements for the higher wages are also going up, or so I've been told. Now I'm wondering whether snagging a "real", "adult" job would even be worth the trouble.

I'm totally lost and things are only getting worse. Every year my supposedly "cheap to live in" city becomes more expensive, while our minimum wage climbs by fractions of a dollar. I'm starting to understand the edgy young lefties who are clamouring for a Reign of Terror. At this rate I'm nearly just as well off waiting for things to explode as I would be planning for a future sans penury.
posted by constantinescharity at 12:26 PM on October 7 [15 favorites]


Nobody owes anything to a society that refuses them access to their needs.
posted by Pope Guilty at 1:55 PM on October 7 [7 favorites]


The criteria explained here
posted by Ideefixe at 2:05 PM on October 7 [1 favorite]


Kirth Gerson: “The so-called Unemployment Rate is a shell game, and has been for years. DTMFA.”
Cf. “Is a Job at Starvation Level Wages a Job?” sallybrown, 01 October 2019
posted by ob1quixote at 2:20 PM on October 7 [5 favorites]


My wife is trying to hire teachers for an after school program at a Catholic K-8 school. It's only about 15 hours a week and she can't get anybody to apply. The few decent applications that have come in didn't even show for the interview because they got better offers first.

The low unemployment rate around here is causing my wife a lot of stress.
posted by COD at 4:11 PM on October 7 [1 favorite]


That's the REAL unemployment rate.
It's worse than that, and it's continuing to diverge from the metrics.

Politicians have been reducing the unemployment rate by simply reducing the rate, not unemployment, for so long that they've forgotten what a healthy economy looks like.
posted by krisjohn at 4:13 PM on October 7 [2 favorites]


What do you mean? High productivity is a healthy economy, and that has been going up and up. You don’t want incompetent, unscrupulous people wasting the fruits of that productivity. That’s why it goes to the top, where it can be properly appreciated.
posted by constantinescharity at 4:21 PM on October 7 [3 favorites]


Considering how mediocre the previous jobs report was, this new one is so drastically better, it's hard to ignore a vague smell of books being cooked.

There is no evidence that the hard working career civil servants at the BLS are cooking the books. It would take a vast conspiracy of hundreds people to cover up.

But keep in mind that the margin of error for the employment report is plus or minus 100,000 for 90% probability. That doesn't mean the numbers are meaningless. The central value is most likely reasonably accurate. But it means that there can be significant noise in a single month's report which will be evened out in the next month. You need to look at a smoothed trend over several months for more certainty.

Also, the month's report is preliminary. It is subject to two more revisions in subsequent months as more data is collected.

So, don't feed the Trumpian conspiracy theories but keep in mind that no one month tells the whole story.
posted by JackFlash at 4:55 PM on October 7 [3 favorites]


Multiple part time jobs with no benefits are the only way of survival for lots of people... with a side benefit of it making the jobs report look healthy. And trying to accommodate multiple jobs into a schedule that is acceptable to the employers is difficult, especially if two jobs share the same day and public transportation is factored in.

Offering a part time job is not very attractive to those who have to do the juggling. We are tired of it. People either give up and opt out or silently seeth and resent the employers who "offer such great jobs" .... and wonder why the turn over rate is so high or the applicants are scarce.

We've seen it. We've danced the dance to your tune and it's not a healthy job market; it's an abattoir.
posted by mightshould at 5:27 PM on October 7 [5 favorites]


+1 U6. Then fix healthcare and we can all ditch a shitty job sitch.
posted by j_curiouser at 5:57 PM on October 7 [1 favorite]


https://fred.stlouisfed.org/graph/?g=p6mo

shows # jobs vs. Age 15-64, showing we've returned to the full employment levelof the 1999-00 cyclical peak.

Buut, more people age 65+ are working now, partially because the retirement age was raised from 65 to 66 over 2002-2019, and also because the Boomers were age 36-54 in 2000 but are now 55-73 now (zoinks!).

Adding the age 16+ population graph in green:

https://fred.stlouisfed.org/graph/?g=p6mt

shows a 10 million gap -- potential slack in the job market vs 2000 -- by this measure, though since not all of the elderly are working or can work, the actual remaining slack in the job market (vs 2000) is the # of age 65+ working now. The participation rate of age 65-74 is 27%, and there's roughly 40 million people in that cohort, so all that 10 million is in fact slack, mostly due to the participation rate of teenagers falling from 53% in 1998 to 31% today (!).
posted by Heywood Mogroot III at 9:52 PM on October 7 [1 favorite]


>key finding of the Federal Reserve’s 2018 survey of U.S. households: almost 40% of Americans would struggle with an unexpected $400 financial emergency.

I've understand covariates. What percentage of that 40% are those who could, but don't, live beneath their means?
posted by Homer42 at 12:39 AM on October 8


Poverty is justice? They were asking for it? Take a breath, Ayn.
posted by j_curiouser at 2:05 AM on October 8 [2 favorites]


@constantinescharity Good to know I'm not the only one, and I hope you realise that plenty of people are in a similar boat to you. It's hard to plan for the future when it's so hard to save anything. Hard to imagine having kids because I can't see when I'd a) be able to afford them or b) have a house to raise them in.

Every day I am thankful for the fact I have a supportive family, even if it's just to buy the occasional pint, or pay for a meal out. The vast majority do not, and if it weren't for them and the NHS I reckon I'd be dead by now, especially if I lived in the US.
posted by Chaffinch at 2:21 AM on October 8


Cooking the books? Probably not. Periodically redefining the meaning of the central concept unemployed, so that it includes fewer and fewer people, most certainly. I see comparisons like "lowest in 50 years" and close the window, because it's bullshit. The unemployment rate reported 50 years ago bore little resemblance to what they're calling the unemployment rate today. Things keep getting worse, and they keep changing their definition so they can say things are better. Lies, damned lies, and statistics, you bet.
posted by Kirth Gerson at 3:49 AM on October 8 [4 favorites]


What percentage of that 40% are those who could, but don't, live beneath their means?

Please fuck right off with that "the poor are only poor because they make bad decisions" nonsense.
posted by FakeFreyja at 9:36 AM on October 8 [9 favorites]


When there’s a number as large as 40 percent, wouldn’t it include a portion of the middle class?
posted by Selena777 at 12:36 PM on October 8 [1 favorite]


What middle class?
posted by Violet Blue at 12:11 AM on October 9 [1 favorite]


A lot of those 40% are indeed "living outside [our] means", Homer42, because the average job these days doesn't provide the means to live. Which is one of the central points of the discussion here. I lived in a literal garden shed (retrofitted with electric and water, but also no foundation, no insulation, and bugs absolutely everywhere) when I got my first FT white-collar "professional" job. That's what "living within my means" looked like. And I was lucky to have four walls and a door to myself, which a lot of my peers didn't. Skipping my bi-monthly mall haircut (which, as a cis woman working in an office, I literally could not do and keep my job) wasn't going to change the housing crisis.

The current situation goes way beyond "those darn Poors aren't Pooring right." Could people do without iPhones? Maybe (some of them actually couldn't!), but who gives rip when people are rationing their kids' insulin? Focusing on "Rich Dad Poor Dad" shit at this juncture in history is, to put it mildly, missing the (burning) forest for the trees.

The fact our supposedly stellar employment stats don't reflect how extremely bad things are for a majority of the population should give us pause, because those numbers are an excuse for the people in charge of this shitbox to point to this 100% unacceptable status quo and say we should keep doing more of the same.
posted by peakes at 1:16 AM on October 9 [5 favorites]


The unemployment rate reported 50 years ago bore little resemblance to what they're calling the unemployment rate today.

I'd have to double-check but am pretty sure there haven't been any substantial changes to the definition of the unemployment rate since the CPS was introduced in the 30s or 40s.

Of course the U3 measurement has problems, but these are the same problems it had fifty or 75 years ago.
posted by GCU Sweet and Full of Grace at 6:10 AM on October 9


The big change was the Reagan administration changing the "official" rate from U3 to U6 so they could pretend unemployment was better than it was and now we're stuck with U3 being the rate people talk about because nobody wants to be the person who goes back to U6.
posted by Pope Guilty at 1:06 PM on October 10 [3 favorites]


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