9 ms·

Why haven't I been reading this kind of hemming and hawing over the lack of full employment for, oh, the last 50 years or so? The fed has a mandate for that too

Why haven't I been reading this kind of hemming and hawing over the lack of full employment for, oh, the last 50 years or so? The fed has a mandate for that too, but somehow when they didn't manage to achieve it, I never heard about how society is going to collapse any minute now. Only when poor people are making income gains. Strange.

vorpalhex 5y ago
We are pretty close to full employment. Rising groceries and fuel costs hurt everyone, but that hurt is more so on the poor who have less overall cash flow.
- adolph 5y ago
  > We are pretty close to full employment. The number of persons not in the labor force who currently want a job was little changed at 5.7 million in January. This measure decreased by 1.3 million over the year but is 708,000 higher than in February 2020. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job. BLS publication "THE EMPLOYMENT SITUATION — JANUARY 2022": https://www.bls.gov/news.release/pdf/empsit.pdf https://www.bls.gov/news.release/pdf/empsit.pdf See also the Labor Force Participation Rate: https://fred.stlouisfed.org/series/CIVPART https://fred.stlouisfed.org/series/CIVPART
  - vorpalhex 5y ago
    > These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job. I mean, I suppose we can forcibly employ everyone? Anyone not employed in two weeks gets contracted out to the IRS or whatever.. but that doesn't seem to be the goal. If you aren't looking for a job, and you can't take a job.. you aren't going to be employed. That isn't some kind of "only the strong survive" thing, that's just a tautology - you must in fact apply for jobs to get a job. Why do you think "people who aren't looking for jobs aren't employed!" is a response here?
    - int_19h 5y ago
      You'd need to investigate why those people aren't actively looking to make meaningful conclusions. E.g. if they don't because they tried and consistently failed and just gave up, I think it's fair to count them as unemployed.
- hparadiz 5y ago
  I remember gas hitting $4 during the Bush administration on the east coast when I was still in high school. Meanwhile I'm currently paying 4.50 at costco for Premium gas. Given recent inflation I think that we're actually paying less for gas than we did during the Iraq war.
  - HarryHirsch 5y ago
    Under Bush II you could actually afford a roof over the head, that's why you didn't notice the energy prices quite as much. Commutes might have been shorter as well then.
    - hparadiz 5y ago
      Under Bush II I was still in high school. Now I own a house. Never had a problem affording rent. I work remote so my commute went down to zero. Energy prices for me are becoming less and less of an issue as I'm getting solar and battery backup put in this year. I don't know where you live but if it's not in LA, SF, or NYC you can probably afford a mortgage no problem with even a modest tech salary.
  - alisonkisk 5y ago
dsjoerg 5y ago
Their mandate is not for "full employment" but for "maximum sustainable employment". https://www.chicagofed.org/research/dual-mandate/dual-mandate https://www.chicagofed.org/research/dual-mandate/dual-mandat...
e4e78a06 5y ago
Poor people are making _nominal_ income gains. Their real income is actually declining because wage gains aren't keeping up with inflation despite a red hot labor market. It's almost like rents rise to match incomes unless you build more housing. Rent control just means that the costs get offloaded to other things like the security deposit, application fees, and deferred maintenance. You can't regulate the market out of existence.
- lumost 5y ago
  Except, with higher interest rates the nominal price of housing falls relative to wages. A worker can reasonably hope to buy there way out of rents at some point in the future (assuming the price of the house is set as a multiple of it's rental equivalent cash flow discounted over time)
  - deleted 5y ago
    [deleted]
  - HarryHirsch 5y ago
    You are discussing the theory. The practice is that housing has been severely underproduced since 2008. Since the GFC, the state of Massachusetts has been adding on average 15000 units/year. You can't buy what doesn't exist, and with the present shortages you can't even build. It's a long-standing policy problem, but not a monetary policy problem.
    - danaris 5y ago
      I don't know about anyone else, but a figure like that (15000 units/year) is meaningless to me without context. What's the change in demand year on year? What was the rate of adding new units before 2008? We're not all experts in Massachusetts' housing market, so it would be helpful to include information that makes your numbers meaningful.
      - HarryHirsch 5y ago
        It's not hard to discover that the population of MA went from 6.54 million in 2008 to 6.89 million in 2019. Just one look at the housing price indices is enough to tell that there's a severe shortage. (Anecdotally, around here (Western MA), ruins of type as-is-where-is that no bank will give you a mortgage on sell for > 125 USD/sqft.) Anyone who disagrees should be cheery about the shortage of automobile parts and make sure it continues. Nowadays you pay more for a 3-year used car than you used to pay for a new one three years ago! Finally, you can invest in a car!
AmericanBlarney 5y ago
Because we've been at or near full employment most of the time. Also, the exact definition of full employment is fuzzy, whereas grocery bills rising is quite tangible.
naasking 5y ago
Full employment is not a desirable goal. There should always be some degree of unemployment because it indicates the labour market is actually working, with people moving between jobs, leaving jobs to get retrained, etc.
- aahortwwy 5y ago
  "Full employment" is not 100% employment. It's exactly what you describe. From Wikipedia: > Full employment is a situation in which there is no cyclical or deficient-demand unemployment. Full employment does not entail the disappearance of all unemployment, as other kinds of unemployment, namely structural and frictional, may remain. For instance, workers who are "between jobs" for short periods of time as they search for better employment are not counted against full employment, as such unemployment is frictional rather than cyclical. An economy with full employment might also have unemployment or underemployment where part-time workers cannot find jobs appropriate to their skill level, as such unemployment is considered structural rather than cyclical. Full employment marks the point past which expansionary fiscal and/or monetary policy cannot reduce unemployment any further without causing inflation.
- imtringued 5y ago
  Full employment is a desirable goal because full employment is defined according to the desire to be employed. Someone who is leaving a job to be retrained is closer to full employment than an employee who is stuck in a part time role even though he is willing to work full time. Someone who is working 40 hours but wants 20 hours is overemployed, not fully employed

vorpalhex 5y ago

We are pretty close to full employment. Rising groceries and fuel costs hurt everyone, but that hurt is more so on the poor who have less overall cash flow.

adolph 5y ago
> We are pretty close to full employment. The number of persons not in the labor force who currently want a job was little changed at 5.7 million in January. This measure decreased by 1.3 million over the year but is 708,000 higher than in February 2020. These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job. BLS publication "THE EMPLOYMENT SITUATION — JANUARY 2022": https://www.bls.gov/news.release/pdf/empsit.pdf https://www.bls.gov/news.release/pdf/empsit.pdf See also the Labor Force Participation Rate: https://fred.stlouisfed.org/series/CIVPART https://fred.stlouisfed.org/series/CIVPART
- vorpalhex 5y ago
  > These individuals were not counted as unemployed because they were not actively looking for work during the 4 weeks preceding the survey or were unavailable to take a job. I mean, I suppose we can forcibly employ everyone? Anyone not employed in two weeks gets contracted out to the IRS or whatever.. but that doesn't seem to be the goal. If you aren't looking for a job, and you can't take a job.. you aren't going to be employed. That isn't some kind of "only the strong survive" thing, that's just a tautology - you must in fact apply for jobs to get a job. Why do you think "people who aren't looking for jobs aren't employed!" is a response here?
  - int_19h 5y ago
    You'd need to investigate why those people aren't actively looking to make meaningful conclusions. E.g. if they don't because they tried and consistently failed and just gave up, I think it's fair to count them as unemployed.
hparadiz 5y ago
I remember gas hitting $4 during the Bush administration on the east coast when I was still in high school. Meanwhile I'm currently paying 4.50 at costco for Premium gas. Given recent inflation I think that we're actually paying less for gas than we did during the Iraq war.
- HarryHirsch 5y ago
  Under Bush II you could actually afford a roof over the head, that's why you didn't notice the energy prices quite as much. Commutes might have been shorter as well then.
  - hparadiz 5y ago
    Under Bush II I was still in high school. Now I own a house. Never had a problem affording rent. I work remote so my commute went down to zero. Energy prices for me are becoming less and less of an issue as I'm getting solar and battery backup put in this year. I don't know where you live but if it's not in LA, SF, or NYC you can probably afford a mortgage no problem with even a modest tech salary.
- alisonkisk 5y ago

dsjoerg 5y ago

Their mandate is not for "full employment" but for "maximum sustainable employment". https://www.chicagofed.org/research/dual-mandate/dual-mandate https://www.chicagofed.org/research/dual-mandate/dual-mandat...

e4e78a06 5y ago

Poor people are making _nominal_ income gains. Their real income is actually declining because wage gains aren't keeping up with inflation despite a red hot labor market. It's almost like rents rise to match incomes unless you build more housing. Rent control just means that the costs get offloaded to other things like the security deposit, application fees, and deferred maintenance. You can't regulate the market out of existence.

lumost 5y ago
Except, with higher interest rates the nominal price of housing falls relative to wages. A worker can reasonably hope to buy there way out of rents at some point in the future (assuming the price of the house is set as a multiple of it's rental equivalent cash flow discounted over time)
- deleted 5y ago
  [deleted]
- HarryHirsch 5y ago
  You are discussing the theory. The practice is that housing has been severely underproduced since 2008. Since the GFC, the state of Massachusetts has been adding on average 15000 units/year. You can't buy what doesn't exist, and with the present shortages you can't even build. It's a long-standing policy problem, but not a monetary policy problem.
  - danaris 5y ago
    I don't know about anyone else, but a figure like that (15000 units/year) is meaningless to me without context. What's the change in demand year on year? What was the rate of adding new units before 2008? We're not all experts in Massachusetts' housing market, so it would be helpful to include information that makes your numbers meaningful.
    - HarryHirsch 5y ago
      It's not hard to discover that the population of MA went from 6.54 million in 2008 to 6.89 million in 2019. Just one look at the housing price indices is enough to tell that there's a severe shortage. (Anecdotally, around here (Western MA), ruins of type as-is-where-is that no bank will give you a mortgage on sell for > 125 USD/sqft.) Anyone who disagrees should be cheery about the shortage of automobile parts and make sure it continues. Nowadays you pay more for a 3-year used car than you used to pay for a new one three years ago! Finally, you can invest in a car!

AmericanBlarney 5y ago

Because we've been at or near full employment most of the time. Also, the exact definition of full employment is fuzzy, whereas grocery bills rising is quite tangible.

naasking 5y ago

Full employment is not a desirable goal. There should always be some degree of unemployment because it indicates the labour market is actually working, with people moving between jobs, leaving jobs to get retrained, etc.

aahortwwy 5y ago
"Full employment" is not 100% employment. It's exactly what you describe. From Wikipedia: > Full employment is a situation in which there is no cyclical or deficient-demand unemployment. Full employment does not entail the disappearance of all unemployment, as other kinds of unemployment, namely structural and frictional, may remain. For instance, workers who are "between jobs" for short periods of time as they search for better employment are not counted against full employment, as such unemployment is frictional rather than cyclical. An economy with full employment might also have unemployment or underemployment where part-time workers cannot find jobs appropriate to their skill level, as such unemployment is considered structural rather than cyclical. Full employment marks the point past which expansionary fiscal and/or monetary policy cannot reduce unemployment any further without causing inflation.
imtringued 5y ago
Full employment is a desirable goal because full employment is defined according to the desire to be employed. Someone who is leaving a job to be retrained is closer to full employment than an employee who is stuck in a part time role even though he is willing to work full time. Someone who is working 40 hours but wants 20 hours is overemployed, not fully employed