Tag: Underemployment

No, There Aren’t More Than 90 Million Americans Unemployed

 

shutterstock_238058275Back in August, Donald Trump told Time:

You have 90 million people that aren’t working. Ninety-three million to be exact. If you start adding it up, our real unemployment rate is 42 percent.

While I usually don’t hear much about the “real” unemployment rate being that high, I frequently hear claims about 90-some million Americans being “jobless” or “out of work” or “on the sidelines” and so forth.

U3 Unicorns Puking Rainbow Recoveries

 

unicorn

Do you ever feel a bit of a disconnect between the continuous media reports that the economy is doing awesome (here, here, and here to name a few) and how much it feels like the economy, to use a technical term, sucks outside of the stock market? Well, you’re not alone, and a couple of basic charts will validate your feelings. This is not data produced in the depths of my basement while I replace the tinfoil around my head. These are government-reported numbers on the health of the labor market. I call your attention to the time period during which the media was harping on the theme of, “It’s the economy, stupid!” and our recent “awesome recovery.”

This first chart shows the labor force participation rate, measuring the percentage of adults who are working. I’m using this instead of the commonly reported – and improving – U3 unemployment rate, because U3 has about as much correlation with the health of the labor market as the ratio of pixies to hobgoblins in Neverland. The reason I’m so down on U3 is that it behaves as if the underemployed are fully employed. (Settle down, James Pethokoukis, I mean the objectively underemployed, as in, part-time workers who want or need to work full time.)