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> I could lose my six-figure job, turn around, and get hired on as a server at Applebee's for minimum wage, and the "unemployment" rate would stay the same. No
by mywittyname 1y ago
> I could lose my six-figure job, turn around, and get hired on as a server at Applebee's for minimum wage, and the "unemployment" rate would stay the same. Not to mention that it doesn't include those not actively looking for work.
This is captured as part of the "U-6" figure for unemployment. The thing is, at a large scale, these events don't matter. They are rare enough to be noise in the grand scheme of things.
The reason the U-3 is the canonical "unemployment rate" is because that is where the core signal is. The bulk of the change in all of the other more inclusive rates is the change in the U-3 scaled by some factor.
But really, your complaint has nothing to do with actual employment, but instead with earnings. Wages are also a metric captured and reported by the BLS and better serve your message.
- wing-_-nuts 1y ago>This is captured as part of the "U-6" figure for unemployment. I always wonder how this is captured. For U-3, you could go with the number getting unemployment benefits. For U-6, you'd have to literally call people and ask them, and I've literally never been called to ask if I'm working in my field and I'd guess most of us haven't either. I have to think if they are sampling, it's a very narrow sample likely biased by geography, industry, age, etc.
- jandrewrogers 1y agoThe models are pretty complicated and incorporate several data sources, sampling is just one part of it. I've seen (very dry) documents that go into the methodology in detail. The model does introduce some obvious biases through assumptions of representativeness but how those interact with the headline numbers is not straightforward.
- jordanb 1y agoU-6 mostly comes from the BLS Occupational Employment Survey. I don't think the original poster would be considered as part of U-6 unless his new job is defined as "marginally attached to the workforce or part-time for economic reasons." Simply getting a job with less pay doesn't put you in U-6.
- phendrenad2 1y agoIf that's true, you've identified a huge hole in the measures. And you can't fix what you can't measure. I think you're right, because despite massive tech unemployment in the last 4 years, I don't see any of the charts spiking. Furthermore, people keep saying "this is captured in Figure X" but if it were really captured, it would be somewhat separable and could produce a chart that shows it in detail. I fear we're giving the Fed too much credit here.
- jordanb 1y agoU3 is kinda silly but is mostly used because it is the original employment rate definition and therefore is comparable across time. U6 would not include the original poster unless his new job was "minimally attached or part-time for economic reasons." U-6 does not, generally, include people who got a new job for lower pay.
- MangoToupe 1y agoThe harm is when people take the metric as literally "what percentage of people who want to be employed can find a job", which U-3 emphatically does not represent.
- deleted 1y ago[deleted]
- jacobr1 1y agoIt doesn't directly measure it, true. But the parent poster was saying it has extremely high positive correlation to measures that do measure it, so it probably doesn't matter.
- gruez 1y agoBy that logic should we also further broaden "unemployment" to mean "100% - employment rate"? That's a pretty common misconception as well, maybe even more common than the one you listed.
- wnc3141 1y agogig work platforms have definitely skewed the traditional significance of U-3