And yet, within the last couple years, the unemployment rate has remained stable within its usual 3-5% healthy band, and the total amount of people employed has increased overall.
Where labor has contracted in some places, it has grown elsewhere.
That metric is so gamed it doesn’t even make sense. If you’ve been out of work for 6 months (or is it 12) you just fall off the metric. So the entire homeless population of the US is not counted as unemployed. That’s been baked into the metric for decades and they have only gotten more discriminatory as to who counts as unemployed since.
There’s no duration for when you’re counted out of the labor force; only when you stop looking for work. Your incentivized to report your looking for work (and provide proof) to get unemployment benefits, and those who opt out of such benefits for more than 4 weeks are not counted as part of the labor force.
I think that’s fair, since even if you are homeless, as long you’re receiving unemployment benefits, you count as part of the statistic.
And there’s good reason to count certain people out of the labor force. Retired folks, stay-at-home parents, anybody else that’s willfully unemployed—if your working in or around government trying to make labor policy decisions, including these people gives you an inaccurate picture of the labor market. If you want to help people get jobs, you need to focus on the people that actually need help.
Of course no statistic is perfect, but broadly, I think that the unemployment rate is a useful and accurate measure. If you think otherwise, I’d invite you to propose a good alternative.
Are you seriously implying that removing people from “unemployed” status after 4 weeks of not submitting a job application is not a deliberate gaming of the statistic in favor of having better job reports?
It’s not on me to invent a new statistic. It is on me to push back on ridiculous claims that minimize the fact that this statistic has been defanged over and over again in the decades since it was first introduced.
The unemployment problem is about people looking for a job and not being able to find one. If someone doesn’t even want a job though, that’s not something you can “fix” anymore.
To include people who don’t want to be employed in the labor force is counter-productive, since why would you try to find jobs for people who don’t want them?
It’s not even that these people are “lazy” like many who (wrongly) disparage the unemployed say. They just aren’t looking for jobs at the moment—stay at home parents, retired people, anybody that doesn’t need/want to work. (And by the way, plenty of homeless people receive unemployment benefits and are therefore included in the statistic.)
The unemployment rate is useful because it helps us see how many people need jobs. If you start including people who don’t need jobs, the metric just becomes less useful.
To your other point, I’m not asking you to invent a new statistic. It’s just that when people say one metric isn’t working, someone smart usually has come up with alternatives. A lot of people for example don’t like using GDP, and thus economists have come up with HDI, GNI weighted GDP, or whatever else suits their taste.
I bring this up because there are few alternatives to unemployment metrics, simply because they are not nearly as problematic as you paint them to be. Practically every competent government on Earth uses the same measures for unemployment, and specifying the labor force to only people actively looking for work is very standard; if you want to say that this nearly ubiquitous method is wrong, I think it’s reasonable to ask what needs to be fixed.
They headline U3 because it's best at answering the question "who is looking for work but can't find it", but of course they use U6. It's literally one of the main metrics in the monthly unemployment report by the Buerau of Labor Statistics. The BLS created the U-# system, and was in fact the first to report a separate U6 metric.
Eurostat, the Internation Labor Organization, OECD--what incentive do all these organizations have to globally misrepresent unemployment? Of course they measure and consider U6, but they choose to headline U3 instead not because it's prettier and they want to serve national propaganda interests, but because it's just more useful.
Didn't we have negative unemployment rate sometime during or right after COVID? I remember people talking about how gamed and disconnected from reality these numbers were because (I think) a bunch of people stopped looking for work or filing for unemployment and were dropped from the labor force for official statistics. It really messed up the models being used.
As far as I understand, that’s (negative unemployment) not possible with the way the statistic is measured. I might be confused though as I’ve never heard of the term.
In any case, COVID was a hellish time for pretty much every economic metric, but for unemployment specifically, the catastrophe didn’t actually end up lasting that long, and the labor market in the U.S. has recovered remarkably well.
Where labor has contracted in some places, it has grown elsewhere.