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📰🕒❓ With government jobs report delayed, what other data reveals about the economy

🤖 AI Summary

  • 🗓️ The latest official report on jobs and unemployment was missed for the second straight month because of the government shutdown [00:00].
  • 📉 Despite the lack of crucial official data, the overall labor market does not look very strong [00:11].
  • 📰 Contradictory private reports indicated both 42,000 new jobs and over 150,000 job cuts in October, with some cuts tied in part to the AI boom [00:19].
  • 🇺🇸 Past presidents have struggled with slow job creation numbers, but Donald Trump was the first to declare war on the data, claiming the Bureau of Labor Statistics (BLS) commissioner rigged the totals [01:06].
  • 💵 The headline unemployment rate sits barely at 4%, which is lower than the average of every decade since the 1960’s [01:54].
  • 💳 Two-thirds of U.S. workers report living paycheck-to-paycheck [01:58].
  • 🚫 The BLS definition of employment is flawed and outdated, established in the 1930’s when it was more typical to either have a factory job or not have one [03:33].
  • ⏱️ You are counted as employed if you work at least one hour for pay or profit during the survey week [03:21].
  • 📱 Statistical resources have failed to accommodate the rise of the gig economy, where a high percentage of the population relies on short-term gigs [03:42].
  • 💔 Millions are functionally unemployed, unable to find as much work as they want or earning less than $25,000 a year [03:55].
  • 📈 This means the true functional unemployment rate is between 24% and 25% today, moving closer to 25% [06:01].
  • 📊 The rosy headline number causes policymakers not to take the employment problem as seriously as it really is [07:28].

🤔 Evaluation

  • 🔍 The video accurately cites the existence of the broader Bureau of Labor Statistics (BLS) measure, U-6, which includes discouraged workers and those working part-time for economic reasons [06:33].
  • ⚖️ Economists often view the BLS U-6 rate, which generally hovers around double the headline U-3 rate, as a more meaningful indicator of labor underutilization than the most commonly reported U-3 rate (Investopedia, U-3 vs. U-6 Unemployment Rate: What’s the Difference?).
  • 📈 The main point of contrast is the Ludwig Institute for Shared Economic Prosperity’s (LISEP) “Functional Unemployment” rate, which is reported in the video at 24% to 25% [06:01].
  • ⚠️ LISEP’s definition, while highlighting economic distress, is criticized by some for conflating income inadequacy with unemployment status.
  • 💸 The Functional Unemployment rate includes all people earning below a set poverty-level wage, which is a measure of economic hardship, not solely job-seeking activity or labor underutilization in the traditional sense (CNET, Unemployment Statistics Are Misleading. Economic Hardship Is Much Worse).
  • 📚 To explore this further, research the specific methodology and ethical justifications for setting the poverty-wage threshold used by the Ludwig Institute.
  • 🌐 Additionally, investigate how other developed nations, particularly those with a significant gig economy, classify involuntary part-time employment and measure labor underutilization.

❓ Frequently Asked Questions (FAQ)

💡 Q: What is the official unemployment rate (U-3) and why is it criticized as misleading?

💡 A: The official U-3 unemployment rate is the percentage of the labor force without a job who have actively searched for work in the last four weeks. 📉 It is often criticized as misleading because its 1930s-era definition counts anyone who worked for just one hour in the reference week as employed, thereby failing to capture underemployment in the modern gig economy.

💻 Q: How does the official unemployment rate definition fail to account for the modern gig economy?

💻 A: The Bureau of Labor Statistics (BLS) counts a person as employed if they worked at least one hour for pay or profit during the survey week. 📱 This standard is considered obsolete because it fails to capture the reality of the gig economy, where a growing segment of the labor force may be involuntarily working part-time or performing unsustainable, low-income work, yet is still counted as fully employed.

📊 Q: What is the functional unemployment rate (TRU) and how high is it?

📊 A: The Functional Unemployment Rate, or True Rate of Unemployment (TRU), is a broader measure created by the Ludwig Institute for Shared Economic Prosperity (LISEP). ⚖️ It includes the jobless, those seeking but unable to find full-time employment, and those who hold poverty-wage jobs (earning below an annual living threshold). 📈 This rate is significantly higher than the official figure, calculated to be between 24% and 25%.

📚 Book Recommendations

↔️ Similar

  • 📚 The Vanishing Middle Class by Peter Temin. This book provides a detailed analysis of the growing labor market divide and widening economic disparity, which helps explain the persistence of high economic distress despite low unemployment figures.
  • 📱 Gigged: The End of the Job and the Future of Work by Sarah Kessler. This explores the explosive growth of the gig economy and its disruptive effects on traditional employment models, including the issues of underemployment and precarious work.

🆚 Contrasting

  • 🏛️ The Wealth of Nations by Adam Smith. This classic text lays the fundamental groundwork for free-market economics, offering a traditional perspective on the role of labor and market mechanics against which modern critiques can be weighed.
  • 🤖📈 The Second Machine Age: Work, Progress, and Prosperity in a Time of Brilliant Technologies by Erik Brynjolfsson and Andrew McAfee. This book details the transformative power of technology and Artificial Intelligence to create new economic growth and productivity, presenting an optimistic view that contrasts with the video’s focus on AI-related job cuts.

🎨 Creatively Related

  • 📊🤥 How to Lie with Statistics by Darrell Huff. A foundational guide on the manipulation and misinterpretation of data, which is highly relevant to the video’s discussion about how different calculation methods create wildly divergent unemployment statistics.
  • 🤔🐇🐢 Thinking, Fast and Slow by Daniel Kahneman. This book explains the dual processes of human thought, offering insight into why simple, headline statistics (like the U-3 rate) are often more influential with the public and policymakers than complex, detailed metrics.

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