Unemployment rate truthers department
The very sharp Kevin Drum gets it largely right:
: U6 Is Now the Last Refuge of Scoundrels: “Tuesday Donald Trump repeated his fatuous nonsense about the real unemployment rate being 42 percent….
…Then Neil Irwin of the New York Times inexplicably decided to opine that ‘he’s not entirely wrong’ because there are lots of different unemployment rates. Et tu, Neil?
Bill O’Reilly picked up on this theme today, with guest Lou Dobbs casually declaring that unemployment is ‘actually’ 10 percent… [and] Bernie Sanders… ‘Who denies that real unemployment today, including those who have given up looking for work and are working part-time is close to 10 percent?’… The 10 percent number is colorably legitimate… U6… unemployment plus folks who have been forced to work part time plus workers who are ‘marginally attached’….
But you can’t just toss this out as a slippery way of making the economy seem like it’s in horrible shape…. What’s normal in an expanding economy is about 8.9 percent…. The US economy is not a house afire…. I’m getting pretty tired of the endlessly deceitful attempts to make it seem as if we’re all but on the edge of economic Armageddon, and the last thing we need is for liberals to sign up for this flimflam too. It’s good politics, I guess, but it’s also a lie.
There are two arguments you can make that are not lies but are, rather, coherent arguments that are more likely than not true:
- That the US labor market performs abysmally at the low-wage end essentially all the time, as evidenced by U6.
- that the unemployment rate is a misleading indicator today because of the long-run disruptions to the labor market occasioned by what we must soon start calling “The Longer Depression”, as evidenced by the divergence in the behavior of unemployment and the employment-to-population ratio. And, no, this divergence is not primarily due to population aging.
Thus I think the Sanders conclusion–that the U.S. labor market is not performing all that well right now–is more likely than not to be correct. I object to the road he claims to reach it by. And I join Kevin Drum in doubly objecting to Trump and Irwin.