True Rate of Unemployment

Anybody who believes ~30% of the workforce was functionally unemployed in 1999 does not know what those words mean, or was not an adult in 1999.

I get what they are trying to convey, but the stronger message is the more straightforward: there are too many jobs that do not pay enough to live on.

I have to wonder how much of this is "would like a full time job but has a part time job paying over 26k." Because of mandatory benefits (such as health insurance) for full time workers, a lot of companies only hire part time workers, but often people are making a living wage from those jobs. I'm not sure if a bartender making $50k+ (including untaxed tips) working 32.5 hours a week should count as unemployed.

> ...or does not earn a living wage, conservatively pegged at $26,000 (in 2025 dollars) annually before taxes.

I couldn't easily tell how they decided on a $26,000 "living wage" figure but in most of the US, even double that is not Easy Street.

The "True Rate of Barely Getting By" is ridiculously high in the US from what I can gather.

While I struggle to see the value here, I dont trust the official numbers and applaud their efforts to come up with alternatives.

However, I fear they conflate "living wage" with desire for full time work in this metric. It also seem to so closely track the official unemployment rate as to not be useful.

Also, as others states, 26k is a surprisingly low number to be called a living wage. I think that number also varies depending on household make up, but I can see why they skipped that complexity.

> the percentage of the U.S. labor force that does not have a full-time job ...

What is the "U.S. labor force" defined as? Is it a age group thing?

Similar statistics for Australia: https://www.roymorgan.com/findings/10192-australian-unemploy...

It all depends on the definition of "Unemployment". Most governments do not count you as unemployed if you've stopped looking for work, been unemployed for over 6 months, or if you made $25 as an Uber driver for 1 hour's work that month.

> the True Rate of Unemployment tracks the percentage of the U.S. labor force that does not have a full-time job (35+ hours a week) but wants one, has no job, or does not earn a living wage, conservatively pegged at $26,000 (in 2025 dollars) annually before taxes

Seems like reasonable criteria. "Regular" unemployment is

# unemployed/# employed

where unemployed is they do not have a job, have actively looked for work in the prior four weeks, and are currently available to work. But not much criteria in terms of what work people are finding.

Looking at the "True Rate" vs "Headline Rate" graph.... The "Headline Rate" seems to be a good proxy for the "True Rate".

As long as we are not comparing them in the absolute term, what's the problem?

I see some odd effects. I wonder how these would be explained?

According to the headline rate, unemployment was about the same in 1995. According to this alternative measure of unemployment, it's gone down by around 8% overall.

When split by race, it's gone down the most for Hispanics.

By education, it's gone down the most for people who didn't complete High School.

This definition sounds like U-6 unemployment (https://fred.stlouisfed.org/series/U6RATE) with an additional term for people making below a living wage. That's better constructed than most of these "real stats" I see, so I hate to be too critical. But they don't really engage with the important question of whether this metric is sufficiently robust for policymakers to use. Just eyeballing it, it seems to be quite a bit more volatile than the headline rate; if the Fed tried to target it, for example, would they end up doing a bunch of unnecessary rate cuts to stave off unemployment spikes that aren't real?

I don't see the revelation, it still appears we're near historical lows and it's not spiking. It's not like there is any divergence between before and now. It's not bad to know what this rate is but it's also not revealing a lie. If you apply their stat methodologies to other G-7, you get similar results.

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