12-08-2016, 10:59 PM
(This post was last modified: 12-08-2016, 11:00 PM by Warren Dew.)
(12-08-2016, 01:24 PM)X_4AD_84 Wrote:(12-08-2016, 09:01 AM)Warren Dew Wrote:(12-08-2016, 12:04 AM)Ragnarök_62 Wrote:(12-07-2016, 10:30 PM)Warren Dew Wrote: To the contrary: the unemployment rate is below 5%, which is pretty close to full employment levels. It's a tight labor market and an ideal time to stimulate labor supply.
No it isn't. That number is propaganda. The real rate of unemployment is north of 20%.
We have loosey-goosey labor supply and thus we need to increase the supply of jobs which aren't party time shit-work like fastie foodie stuff.
http://www.shadowstats.com/alternate_dat...ent-charts
Supporting stat here: https://fred.stlouisfed.org/series/CIVPART
The 5% figure is relevant to the people in the labor market - that is, looking for jobs. People who aren't looking for jobs are not part of the labor supply and bringing them back into the labor market is exactly what supply side policies are designed for.
Figures on job openings are extremely high, so the labor demand is there. It's just that the amount employers are willing to pay doesn't match the amount people are willing to work for. Supply side policies can help close that gap by removing extraneous costs that employers have to pay but employees don't consider to be worthwhile in terms of compensation. Reducing taxes would be part of that. Costs that act like taxes, such as the requirement for gold plated health care for fast food workers working more than 30 hours a week would be another part. A lot of workers would be happier working 40 hours a week, but getting the health care costs in the form of dollars of direct pay instead.
He's also including underemployed. Underemployed can be extreme. For example, a person who lost a good paying job. They were looking and looking for something that could at least replace 50 - 60% of their former income. Then their unemployment ran out and they went to work in retail or fast food. That person's pay is less than their unemployment benefit was and way way less than their former income. That person is de facto unemployed from the stand point of their living situation.
That situation is indeed common and it's a good illustration of why the economy isn't in the good shape Obama's fans think it is.
However, the underemployed are obviously not taking any of the 5.5 million job openings out there, so they aren't part of the labor supply at the moment.
Look, from the standpoint of how bad the economy is, I agree that the 5.5% unemployment rate is not an indicator that the economy is good, from the standpoint of the average person. It's not. The headline unemployment rate just isn't a good indicator for how well off people are.
However, the 5.5% headline unemployment rate is a good indicator of two things. One is the likelihood of civil unrest: even if you're underemployed, the bad job you do have lets you eat and gives you a stake in the system, making you less likely to participate in armed revolution. That's something the political elites really care about. The other is the tightness of the labor market. The number indicates that the supply of labor at current wages is tight, and thus that the situation is ripe for supply side stimulus of the economy.