7 ms·

The national unemployment rate has always been political fodder and not a good indicator to the heath of people employed. Statistical smoke and mirrors conside

by ProAm 8y ago

The national unemployment rate has always been political fodder and not a good indicator to the heath of people employed. Statistical smoke and mirrors considering they do not count people who've stopped looking for work because they cannot find it, those who are under-employed, or those who are earning less this year compared to last due to inflation and wage stagnation.

exclusiv 8y ago
Agreed. Wage growth has been non-existant for a long time. Every administration is basically like "hey we're doing great - look at these unemployment numbers" and then you talk to people and they're saying the opposite. Savings is atrocious too. Some of that is people being bad with money but a lot is that the lack of wage growth and rising expenses on things like healthcare, education and home ownership makes it hard for them to save. 60% of Americans can't afford a $500 unplanned expense [1]. That alone forces many to take crappy job(s) to just stay afloat. [1] http://money.cnn.com/2017/01/12/pf/americans-lack-of-savings/index.html http://money.cnn.com/2017/01/12/pf/americans-lack-of-savings...
- hnlurker 8y ago
  Maybe they should stop playing the lottery? Average adult American spends over $300 per year on lottery tickets[0]. I'm all out of sympathy for smokers that get lung cancer, and other self-induced disasters. [0] https://www.fool.com/retirement/2017/01/07/heres-what-americans-are-spending-on-lottery-ticke.aspx https://www.fool.com/retirement/2017/01/07/heres-what-americ...
  - SketchySeaBeast 8y ago
    Saving that $300 a year at a highly unlikely 10% interest ends up being $36k after 25 years. It's not solving any problems. To even save up that $500 minimum would take 2 years. We can't just blame it on a single straw-man.
    - hnlurker 8y ago
      I was just responding to the often cited claim that average Americans would be devastated by an unexpected $500 expense. They're spending $300+ on lottery tickets, and yet can't cover a $500 expense. It seems a rather simple solution to me.. don't throw away your money on lottery tickets.
      - lovich 8y ago
        500>300 so it's not really gonna help without a multi year plan. That would be an ideal move if humans were emotionless automatons but that point people need some amount of entertainment or hope to keep on going day after day. If you took away everyone's vices _and_ subjected them to the reality of life as an average American you'd have riots on your hands
- mgkimsal 8y ago
  this comes up a lot, and I can never find the actual questions that get asked on these surveys. do they mean an actual savings account at a bank? the kind that pay 0.02% interest? few people I know, even with high net worth and liquidity, have much of anything in a 'savings account'. But... "Only 41% of adults reported having enough in their savings account". Do they just mean 'savings'? Or liquid cash? I can never find the actual text of the questions asked, and any clarifications on this point, although I see pop media references to these sorts of surveys regularly
  - SketchySeaBeast 8y ago
    They go on to mention that they'd have to put it on credit card, or ask friends, so while the article says savings account I don't think they are that literal. But you're right, it's a flaw in the language.
  - wgerard 8y ago
    > few people I know, even with high net worth and liquidity, have much of anything in a 'savings account' Really? It's fairly common advice to store an emergency fund in something akin to a savings account (or at least something with FDIC backing). Either way, it seems bizarre for a high net worth individual not to have at least $500 in something extremely liquid like a checking/savings account. Either way, it's fair to assume it means liquid cash, since the question is basically "could you afford an unexpected $500 expense?". If you want to take that study to task, I think the far more interesting statistic is the 20% who would put it on their credit card: While those could be people who are just going into debt to afford the bill, it could also be people who just pay their card off in full every month and want whatever rewards they might be entitled to from using the credit card.
    - ryandrake 8y ago
      > Really? It's fairly common advice to store an emergency fund in something akin to a savings account (or at least something with FDIC backing) That’s where I have my emergency fund (earning nearly zero interest of course). If OP knows of some other type of account with enough liquidity to use as an emergency fund AND generates significant interest, you have my full attention!
- ChrisLomont 8y ago
  >Wage growth has been non-existant for a long time Wages grew at the fast rate on record in 2015. [1] Nearby years are similar. Here's FRED real median household income [2]. Real wages have been growing for several years. [2] https://fred.stlouisfed.org/series/MEHOINUSA672N https://fred.stlouisfed.org/series/MEHOINUSA672N [1] https://www.washingtonpost.com/news/wonk/wp/2016/09/13/the-middle-class-and-the-poor-just-had-the-best-year-since-the-end-of-the-great-recession/?noredirect=on&utm_term=.2a8b5e3bf19e https://www.washingtonpost.com/news/wonk/wp/2016/09/13/the-m...
  - pmiller2 8y ago
    Look at the MAX chart on your link [2]. We’re barely above where we were in 1998. Hell, look here: http://www.pewresearch.org/fact-tank/2014/10/09/for-most-workers-real-wages-have-barely-budged-for-decades/ http://www.pewresearch.org/fact-tank/2014/10/09/for-most-wor... Real wages have been stagnant since the mid 60s. The short term picture is most likely a blip.
    - ChrisLomont 8y ago
      >Real wages have been stagnant since the mid 60s. Most people working today were not working in the 1960s. They have seen their wages grow. Also as working demographics skew younger as boomers retire, the median worker is earlier in their career, so they earn less, making it look like wages are lower, yet for each person wages have increased. The higher paid cohort is retiring. All this is covered in Census reports.
      - pmiller2 8y ago
        Not true. Wages have been flat over the entire period from 1964 onwards. Individuals may experience wage growth through job changes and raises, but that doesn’t change the fact that overall real wages are stagnant. You can’t cherry pick the last 3 years of a 50-year trend and say it’s all good.
        ChrisLomont 8y ago
- pitaj 8y ago
  Most people could absorb a sub-$1000 emergency expense with a credit card, not a savings account.
notarealaccount 8y ago
There is a worse not so hidden cost. The deficit is going from $600B to $1T, almost doubled. Instead of the government borrowing $3000 a year in my name it will be borrowing $5000 a year in my name which I or my children will have to pay back at some point. This way, down here in the South, all the dumb as coal red necks are very, very happy with their manual labor job that they drive their pickup to in the morning. I'm going to see myself out and return to /r/politics.
- ChrisLomont 8y ago
  >which I or my children will have to pay back at some point Which is not as relevant as you think, since if your kids have to pay it in 50 years, deflation will have made it effective 1/4 as much or so. And if the current spending results in more total wealth at that point than if the spending was not done, then everyone is better off. Not all deficit spending is bad economics, in the same way buying a house or paying for college is on average a positive economic move in the long run.
  - polotics 8y ago
    You wrote deflation, but I think you meant inflation: with deflation the purchasing power of the $5000 borrowed would go up, not down.
    - notarealaccount 8y ago
      Either word, this commenter, doesn't know too much about what they are commenting on.
      - dang 8y ago
        Maybe not, but please don't post unsubstantive comments here. And certainly not personal attacks, which this dips a toe into. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
    - ChrisLomont 8y ago
pascalxus 8y ago
Not to mention all those job posting that aren't openings at all: the ones that never ever higher anyone despite getting hundreds of applicants.
- HillaryBriss 8y ago
  yeah. that's mostly how i interpret a number of suspiciously durable job postings i see on sites like LinkedIn and Glassdoor. either that or the working conditions are so bad that there's a high turnover.
wgerard 8y ago
> those who are earning less this year compared to last due to inflation and wage stagnation. The article discusses this briefly: > The trucking industry is instructive here: Trade groups have argued that it is facing a shortfall of 51,000 workers, yet businesses have not yet shown much willingness to cut hours, boost pay, and improve conditions to lure workers in. Indeed, across the economy, companies have shown a remarkable unwillingness to boost wages, with growth barely keeping pace with inflation even as the unemployment rate has dropped to 4 percent. It'll be interesting to see what happens if those industries start to get really desperate for employees. My guess in some of them is a hard push for automation (esp. in trucking), but we'll see.
- elvirs 8y ago
  one of the reasons for reluctance to boost pay could be the fact that profit margins of trucking companies have decreased in recent years despite increasing demand for their services. Also they have found a way to enable illegal immigrants to drive trucks which gives another source to companies to keep trucker wages low. I am an immigrant and know so many guys (from my country) who could not find any other job (because lack of paperwork) start driving trucks, mostly for Florida based companies.
  - HillaryBriss 8y ago
    why have trucking profit margins decreased?
    - elvirs 8y ago
      I would guess because of competition from VC funded companies from ecommerce and self driving trucks industries trying to disrupt trucking business
aero142 8y ago
Stop getting your economics reports from political news sources. "They don't count people who've stopped looking" is not a meaningful statement. There are many statistics that report this. Labor force participation rate is the one I always look at next to unemployment rate and gives a better overall picture. https://data.bls.gov/timeseries/LNS11300000 https://data.bls.gov/timeseries/LNS11300000 In this case, I think you make a valid point. Why is the labor force participation rate not climbing back to 2008 levels?
- deleted 8y ago
  [deleted]
- Ensorceled 8y ago
  > Why is the labor force participation rate not climbing back to 2008 levels? Probably because the boomers are 10 years older than in 2008?
  - plasticchris 8y ago
    Were the boomers more likely to participate per capita? Or did I misunderstand the statistic?
    - Ensorceled 8y ago
      Older people are less likely to participate than normal, boomers are a population hump and America is a pretty ageist work place.
- ChrisLomont 8y ago
  A large part is demographics, and the drop was known for decades before it happened, as mentioned in papers from Census. FRED reports also explain this. Another part is people staying in college longer (or going back to college) to get more education which is needed for a modern workforce, and the result of that is more lifetime earnings, not less. A third part is many people are opting for one income, since many couples can now live on one income. More people moving from the middle class did so by moving up rather than down.
ryandrake 8y ago
You’re getting downvotes but it’s really difficult to take any report on employment seriously, since partisans are always bending definitions of things like “wants a job” and “has a job” to suit their narrative.
Bluestrike2 8y ago
Each employment example you've provided is tracked by the BLS, along with others. Refer to table A-15, or "Alternative measures of labor underutilization"[0] and this[1] release which expands a bit on what they mean. There's also a more detailed FAQ that discusses how unemployment is measured.[2] There's no single, simple metric that can fully encompass everything when it comes to unemployment. So they rely on six different metrics, which tend to correlate closely. When they don't, it's obvious in the alternative measures . When politicians talk about U-3, they're comparing it to the same measure in previous periods. Politically, the trend is the focus. In no way is this a case of "statistical smoke and mirrors." Brightlines have to be drawn, and U-3 does just that in way that's fairly straightforward and usable by the public at large. More importantly, trying to focus on U-6 (for example) as your main unemployment rate has significant drawbacks. While these different cases are all related to one another, the economic policy proscriptions for targeting general unemployment aren't necessarily the same as trying to ameliorate involuntary part-time workers (U-6) who want to work full-time and would if the opportunity presented itself. Finally, BLS also collects wage data by area and occupation[3] that addresses your final concern. It just doesn't get mentioned as much in the press, or by politicians, because wage data isn't easily boiled down into a single number; it's a bit more involved to deal with. It's still used in econometric modeling and to inform fiscal and monetary policy. It's not something that's ignored. 0. https://www.bls.gov/news.release/empsit.t15.htm https://www.bls.gov/news.release/empsit.t15.htm 1. https://www.bls.gov/lau/stalt.htm https://www.bls.gov/lau/stalt.htm 2. https://www.bls.gov/cps/cps_htgm.htm https://www.bls.gov/cps/cps_htgm.htm 3. https://www.bls.gov/bls/blswage.htm https://www.bls.gov/bls/blswage.htm

by ProAm 8y ago

exclusiv 8y ago

Agreed. Wage growth has been non-existant for a long time. Every administration is basically like "hey we're doing great - look at these unemployment numbers" and then you talk to people and they're saying the opposite. Savings is atrocious too. Some of that is people being bad with money but a lot is that the lack of wage growth and rising expenses on things like healthcare, education and home ownership makes it hard for them to save. 60% of Americans can't afford a $500 unplanned expense [1]. That alone forces many to take crappy job(s) to just stay afloat. [1] http://money.cnn.com/2017/01/12/pf/americans-lack-of-savings/index.html http://money.cnn.com/2017/01/12/pf/americans-lack-of-savings...

hnlurker 8y ago
Maybe they should stop playing the lottery? Average adult American spends over $300 per year on lottery tickets[0]. I'm all out of sympathy for smokers that get lung cancer, and other self-induced disasters. [0] https://www.fool.com/retirement/2017/01/07/heres-what-americans-are-spending-on-lottery-ticke.aspx https://www.fool.com/retirement/2017/01/07/heres-what-americ...
- SketchySeaBeast 8y ago
  Saving that $300 a year at a highly unlikely 10% interest ends up being $36k after 25 years. It's not solving any problems. To even save up that $500 minimum would take 2 years. We can't just blame it on a single straw-man.
  - hnlurker 8y ago
    I was just responding to the often cited claim that average Americans would be devastated by an unexpected $500 expense. They're spending $300+ on lottery tickets, and yet can't cover a $500 expense. It seems a rather simple solution to me.. don't throw away your money on lottery tickets.
    - lovich 8y ago
      500>300 so it's not really gonna help without a multi year plan. That would be an ideal move if humans were emotionless automatons but that point people need some amount of entertainment or hope to keep on going day after day. If you took away everyone's vices _and_ subjected them to the reality of life as an average American you'd have riots on your hands
mgkimsal 8y ago
this comes up a lot, and I can never find the actual questions that get asked on these surveys. do they mean an actual savings account at a bank? the kind that pay 0.02% interest? few people I know, even with high net worth and liquidity, have much of anything in a 'savings account'. But... "Only 41% of adults reported having enough in their savings account". Do they just mean 'savings'? Or liquid cash? I can never find the actual text of the questions asked, and any clarifications on this point, although I see pop media references to these sorts of surveys regularly
- SketchySeaBeast 8y ago
  They go on to mention that they'd have to put it on credit card, or ask friends, so while the article says savings account I don't think they are that literal. But you're right, it's a flaw in the language.
- wgerard 8y ago
  > few people I know, even with high net worth and liquidity, have much of anything in a 'savings account' Really? It's fairly common advice to store an emergency fund in something akin to a savings account (or at least something with FDIC backing). Either way, it seems bizarre for a high net worth individual not to have at least $500 in something extremely liquid like a checking/savings account. Either way, it's fair to assume it means liquid cash, since the question is basically "could you afford an unexpected $500 expense?". If you want to take that study to task, I think the far more interesting statistic is the 20% who would put it on their credit card: While those could be people who are just going into debt to afford the bill, it could also be people who just pay their card off in full every month and want whatever rewards they might be entitled to from using the credit card.
  - ryandrake 8y ago
    > Really? It's fairly common advice to store an emergency fund in something akin to a savings account (or at least something with FDIC backing) That’s where I have my emergency fund (earning nearly zero interest of course). If OP knows of some other type of account with enough liquidity to use as an emergency fund AND generates significant interest, you have my full attention!
ChrisLomont 8y ago
>Wage growth has been non-existant for a long time Wages grew at the fast rate on record in 2015. [1] Nearby years are similar. Here's FRED real median household income [2]. Real wages have been growing for several years. [2] https://fred.stlouisfed.org/series/MEHOINUSA672N https://fred.stlouisfed.org/series/MEHOINUSA672N [1] https://www.washingtonpost.com/news/wonk/wp/2016/09/13/the-middle-class-and-the-poor-just-had-the-best-year-since-the-end-of-the-great-recession/?noredirect=on&utm_term=.2a8b5e3bf19e https://www.washingtonpost.com/news/wonk/wp/2016/09/13/the-m...
- pmiller2 8y ago
  Look at the MAX chart on your link [2]. We’re barely above where we were in 1998. Hell, look here: http://www.pewresearch.org/fact-tank/2014/10/09/for-most-workers-real-wages-have-barely-budged-for-decades/ http://www.pewresearch.org/fact-tank/2014/10/09/for-most-wor... Real wages have been stagnant since the mid 60s. The short term picture is most likely a blip.
  - ChrisLomont 8y ago
    >Real wages have been stagnant since the mid 60s. Most people working today were not working in the 1960s. They have seen their wages grow. Also as working demographics skew younger as boomers retire, the median worker is earlier in their career, so they earn less, making it look like wages are lower, yet for each person wages have increased. The higher paid cohort is retiring. All this is covered in Census reports.
    - pmiller2 8y ago
      Not true. Wages have been flat over the entire period from 1964 onwards. Individuals may experience wage growth through job changes and raises, but that doesn’t change the fact that overall real wages are stagnant. You can’t cherry pick the last 3 years of a 50-year trend and say it’s all good.
      - ChrisLomont 8y ago
pitaj 8y ago
Most people could absorb a sub-$1000 emergency expense with a credit card, not a savings account.

notarealaccount 8y ago

There is a worse not so hidden cost. The deficit is going from $600B to $1T, almost doubled. Instead of the government borrowing $3000 a year in my name it will be borrowing $5000 a year in my name which I or my children will have to pay back at some point. This way, down here in the South, all the dumb as coal red necks are very, very happy with their manual labor job that they drive their pickup to in the morning. I'm going to see myself out and return to /r/politics.

ChrisLomont 8y ago
>which I or my children will have to pay back at some point Which is not as relevant as you think, since if your kids have to pay it in 50 years, deflation will have made it effective 1/4 as much or so. And if the current spending results in more total wealth at that point than if the spending was not done, then everyone is better off. Not all deficit spending is bad economics, in the same way buying a house or paying for college is on average a positive economic move in the long run.
- polotics 8y ago
  You wrote deflation, but I think you meant inflation: with deflation the purchasing power of the $5000 borrowed would go up, not down.
  - notarealaccount 8y ago
    Either word, this commenter, doesn't know too much about what they are commenting on.
    - dang 8y ago
      Maybe not, but please don't post unsubstantive comments here. And certainly not personal attacks, which this dips a toe into. https://news.ycombinator.com/newsguidelines.html https://news.ycombinator.com/newsguidelines.html
  - ChrisLomont 8y ago

pascalxus 8y ago

Not to mention all those job posting that aren't openings at all: the ones that never ever higher anyone despite getting hundreds of applicants.

HillaryBriss 8y ago
yeah. that's mostly how i interpret a number of suspiciously durable job postings i see on sites like LinkedIn and Glassdoor. either that or the working conditions are so bad that there's a high turnover.

wgerard 8y ago

> those who are earning less this year compared to last due to inflation and wage stagnation. The article discusses this briefly: > The trucking industry is instructive here: Trade groups have argued that it is facing a shortfall of 51,000 workers, yet businesses have not yet shown much willingness to cut hours, boost pay, and improve conditions to lure workers in. Indeed, across the economy, companies have shown a remarkable unwillingness to boost wages, with growth barely keeping pace with inflation even as the unemployment rate has dropped to 4 percent. It'll be interesting to see what happens if those industries start to get really desperate for employees. My guess in some of them is a hard push for automation (esp. in trucking), but we'll see.

elvirs 8y ago
one of the reasons for reluctance to boost pay could be the fact that profit margins of trucking companies have decreased in recent years despite increasing demand for their services. Also they have found a way to enable illegal immigrants to drive trucks which gives another source to companies to keep trucker wages low. I am an immigrant and know so many guys (from my country) who could not find any other job (because lack of paperwork) start driving trucks, mostly for Florida based companies.
- HillaryBriss 8y ago
  why have trucking profit margins decreased?
  - elvirs 8y ago
    I would guess because of competition from VC funded companies from ecommerce and self driving trucks industries trying to disrupt trucking business

aero142 8y ago

Stop getting your economics reports from political news sources. "They don't count people who've stopped looking" is not a meaningful statement. There are many statistics that report this. Labor force participation rate is the one I always look at next to unemployment rate and gives a better overall picture. https://data.bls.gov/timeseries/LNS11300000 https://data.bls.gov/timeseries/LNS11300000 In this case, I think you make a valid point. Why is the labor force participation rate not climbing back to 2008 levels?

deleted 8y ago
[deleted]
Ensorceled 8y ago
> Why is the labor force participation rate not climbing back to 2008 levels? Probably because the boomers are 10 years older than in 2008?
- plasticchris 8y ago
  Were the boomers more likely to participate per capita? Or did I misunderstand the statistic?
  - Ensorceled 8y ago
    Older people are less likely to participate than normal, boomers are a population hump and America is a pretty ageist work place.
ChrisLomont 8y ago
A large part is demographics, and the drop was known for decades before it happened, as mentioned in papers from Census. FRED reports also explain this. Another part is people staying in college longer (or going back to college) to get more education which is needed for a modern workforce, and the result of that is more lifetime earnings, not less. A third part is many people are opting for one income, since many couples can now live on one income. More people moving from the middle class did so by moving up rather than down.

ryandrake 8y ago

You’re getting downvotes but it’s really difficult to take any report on employment seriously, since partisans are always bending definitions of things like “wants a job” and “has a job” to suit their narrative.

Bluestrike2 8y ago

Each employment example you've provided is tracked by the BLS, along with others. Refer to table A-15, or "Alternative measures of labor underutilization"[0] and this[1] release which expands a bit on what they mean. There's also a more detailed FAQ that discusses how unemployment is measured.[2] There's no single, simple metric that can fully encompass everything when it comes to unemployment. So they rely on six different metrics, which tend to correlate closely. When they don't, it's obvious in the alternative measures . When politicians talk about U-3, they're comparing it to the same measure in previous periods. Politically, the trend is the focus. In no way is this a case of "statistical smoke and mirrors." Brightlines have to be drawn, and U-3 does just that in way that's fairly straightforward and usable by the public at large. More importantly, trying to focus on U-6 (for example) as your main unemployment rate has significant drawbacks. While these different cases are all related to one another, the economic policy proscriptions for targeting general unemployment aren't necessarily the same as trying to ameliorate involuntary part-time workers (U-6) who want to work full-time and would if the opportunity presented itself. Finally, BLS also collects wage data by area and occupation[3] that addresses your final concern. It just doesn't get mentioned as much in the press, or by politicians, because wage data isn't easily boiled down into a single number; it's a bit more involved to deal with. It's still used in econometric modeling and to inform fiscal and monetary policy. It's not something that's ignored. 0. https://www.bls.gov/news.release/empsit.t15.htm https://www.bls.gov/news.release/empsit.t15.htm 1. https://www.bls.gov/lau/stalt.htm https://www.bls.gov/lau/stalt.htm 2. https://www.bls.gov/cps/cps_htgm.htm https://www.bls.gov/cps/cps_htgm.htm 3. https://www.bls.gov/bls/blswage.htm https://www.bls.gov/bls/blswage.htm