This is from the Shadowstats.com site.
The official US unemployment statistic most frequently used in the media is U-3. But U-3 excludes short-term discouraged workers, marginally-attached workers, and those who want full-time work but cannot find it and are forced to make do with part-time or causal work.
U-6 includes these types of people, and, by U-6, US employment in 2016 stands at 10%.
But it is worse than this, because there are long-term demoralised and discouraged people who have given up looking for work but could be encouraged back into the labour force if jobs were available. Once these people are added to the data, US unemployment probably stands at something like 23%. This is a total catastrophe and proof of the miserable failure of neoliberalism.
Although I don't disagree with you on the point that the employment situation is bad in the United States, shadowstats' data is something one has to be careful about.
ReplyDeletehttp://www.shadowstats.com/alternate_data/inflation-charts
DeleteWe're close to hyperinflation! :D
Regarding Shadowstats,
Delete(1) Its “alternate” inflation estimates are unreliable, yes. They do not even recalculate inflation data at all: what they do is add a questionable arbitrary constant to the government inflation rate:
http://azizonomics.com/2013/06/01/the-trouble-with-shadowstats/
Moreover, the “Billion Prices Project” at MIT data provides very strong confirmation that the official CPI estimates are a reasonable measure of inflation, as I point out here:
http://socialdemocracy21stcentury.blogspot.com/2013/08/sumner-versus-schiff-and-shadowstats.html
Obviously, the “alternate” real GDP measures are also unreliable, because the real GDP calculations are based on the inflation figures.
(2) But I have seen no debunking of their ShadowStats alternative unemployment rate.
In any case, U-6 is just taken from the Bureau of Labor Statistics, and not calculated by ShadowStats.
LK, people quitting labor force is a sign of the success of "neoliberalism", no? Incomes and welfare have risen so much that they no longer feel need to work!
ReplyDeleteHello,
DeleteWhat 'welfare' is available to individuals who quit the labor force?
UK data suggests there is at least as many people 'inactive - wants a job' as there are unemployed, and about half again that are 'part-time, want full time'.
ReplyDeleteThe job shortage buffer is probably about 10% of the population at any one time in advanced economies - since that's about the level at which the job matching problem starts to bite.
Working from memory, the Shadowstats 20% unemployment rate makes an assumption that the participation rate is constant. Demographic effects are lowering the participation rate (but not by as much as some argue).
ReplyDeleteYou could embed a FRED chart of U-6, and stay clear of debating the reliability of Shadowstats.
I was not aware of the constant participation rate assumption they make. Thanks for this.
DeleteI don't believe anything Shadowstats offers for a second; the problem now is not high unemployment, but a large proportion of the unemployed being over 27 weeks.
ReplyDeletePlus underemployed people and long term discouraged workers who could be drawn back into the labour force.
DeleteYeah I'd steer clear from anything ShadowStats says. Their inflation numbers are effectively a scam. And even if the "real level of unemployment" is higher than U6 (and surely there is some reason to believe it is), it'd be better to pinpoint that and find out what the real slack in the labor market is (students, seniors or housewives who woudln't mind working, those on disability who can still work, long-term unemployed or discouraged not included in the statistics, etc.).
ReplyDeleteRelying on Shadowstats is a huge gamble.