Is the unemployment rate voodoo labor-market economics?

Man Out

We hear a lot about how well the U.S. economy is doing, creating jobs, with tight labor markets driving up wages. On the surface, it’s easy to point to an official 4.1 percent unemployment rate in March and ooh and aah about how it’s near historic lows.

But, something’s wrong with this picture.

All told, 20 million or more adult men are not working. Have they been shafted by a bad economy (masquerading as a good one), or are some of them lazy and being supported by partners, parents, or government? Not working not only impoverishes people, but it does a number on an individual’s self-esteem and, for many men, it is a blow to their masculinity, as men have traditionally been viewed as the “providers.”

But, this doesn’t really provide a true picture either. This excludes the 2 million men who are incarcerated, which would push up the number not working, or men in the 1.1 million active-duty men in the military, which would bring the number down. However, the number of young adults shouldn’t be counted as not working, but there are more than 6 million 16-to-24-year-olds who are neither in school nor working. In addition, as more men and women are working longer, the upper bounds of what is “working age” get fuzzy, since the age for full Social Security benefits is 66 and many people work into their late 60s and 70s.

Finally, the 21 percent number, which may be slightly higher because of the above considerations, is further distorted by part-time and contract, or “gig economy,” work. One-fourth of the 79-80 percent of men 20 and older men working at the end of last year worked part-time, and a quarter of them said they really wanted a full-time job. Some estimates have put the number of men working on contract, in the “gig” or “1099” economy–part-time or full-time–at about 13-14 percent of all working men.

So what’s the real number, and what does it say about the U.S. economy, and how well men (and women) are doing in it.

At the very least, a new measure needs to be devised, but the number would be much scarier to the people, politicians and markets than the current, blandly reassuring “unemployment rate” is.

 

 

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