You may have noticed that we Americans have trouble communicating. We may–or may not– talk to each other, but talking is not the same thing as communicating.
One of the reasons we are so polarized is that we not only occupy different realities, we use the same words to describe very different things.
I’ve previously pointed out that “conservative” does not accurately describe a radical MAGA movement filled with White “Christian” Nationalists. Labeling every social program, no matter how modest, as “socialist” confuses modern mixed economies with soviet-style, authoritarian regimes. But the problem goes beyond propaganda and intentional misdirection, because we can’t solve our problems if we can’t describe those problems accurately.
In an article awhile back Vox illustrated that problem. The first paragraph was eye-opening:
A person who is looking for a full-time job that pays a living wage — but who can’t find one — is unemployed. If you accept that definition, the true unemployment rate in the U.S. is a stunning 26.1%, according to an important new dataset shared exclusively with “Axios on HBO.”
The article then noted that the official unemployment rate excludes people who might be earning only a few dollars a week, along with people who have stopped looking for work for whatever reason–perhaps a lack of available jobs or child care. The definition of “unemployed” that we use affects our evaluation of the severity of the problem. As the 2020 article pointed out, that year, if we had identified as unemployed anyone over 16 years old who wasn’t earning a living wage, the overall rate would have been 54.6%. For Black Americans, it would have been 59.2%.
The Axios article gave the backstory of our current measurement metric:
The official definition of unemployment can be traced back to the 1870s, when a Massachusetts statistician named Carroll Wright diagnosed what he referred to as “industrial hypochondria”.
By restricting the “unemployed” label to men who “really want employment,” Wright managed to minimize the unemployment figure.
Wright went on to found the Bureau of Labor Statistics, and he brought his unemployment definition with him.
To this day, to be officially counted as unemployed you need to be earning no money at all, and you need to be actively looking for work.
More recently, Gene Ludwig, a former U.S. Comptroller of the Currency, founded the Ludwig Institute for Shared Economic Prosperity. According to calculations by that institute, in January of 2020, when the official rate of unemployment was 3.6%, the true rate was seven times greater — 23.4%. Whether you agree with Ludwig that the higher number is the “true” unemployment rate is less significant than the fact that most Americans don’t understand what the official number measures.
What would be helpful–what would allow us to actually communicate about jobs and wages– would be a report that broke down the data into categories: these are people actively searching for jobs who don’t have one; these are people whose jobs don’t pay a living wage; etc. That sort of report would allow voters and policymakers to focus on the actual issues involved. As it is, a single number that excludes everyone who has any sort of employment–whether part-time or poorly paid–obscures reality.
We can’t fix a problem we can’t properly define.
Insufficient jobs and insufficient wages are two very different problems. The Biden administration has done an admirable job of creating new jobs, and various economic reports indicate that the administration has also presided over significant wage gains, but few of us have the time or ability to delve into the official data of the Bureau of Labor Statistics and to calculate what percentage of workers has escaped the “under-employed” category.
This problem of accurate–or at least agreed-upon–definition isn’t limited to employment figures. Some years ago, I was looking into arguments about the U.S. balance of trade, and realized that those official calculations only included tangible goods–not services or other intangibles. So if we were sending printed books (or cars or widgets) abroad, those got counted; but if Americans were selling publishing rights (or providing design services) to consumers in other countries, the value of those exports wasn’t included. (I don’t know whether that is still the case.)
What was that bible story about the Tower of Babel?
We live in a very complex society, and wide differences in culture, education and expertise add other complications to even the most sincere efforts at communication. But–assuming we elect people in November who are committed to running a functional government–we really need to look at the way official data is compiled and reported.
Using the same words to talk about the same things would be a start….
Speaking of the Unemployed and UNDER Employed.. It was the Republicans that came up with incentives for corporate America to “Off Shore” their labor costs.
The idea was to fire American workers and hire low wage foreign workers. The R encouraged and subsidized this war on the American worker. “Morning in America” Republican style. Vote BLUE no matter who.
If the minimum wage were tied to reality, how much underemployment might there be?
if the billionaire class wasnt,and that money flowed into living wages, we wouldnt have this issue. the money locked up into the wealthys pocket (not taxed)would make a living wage for every person working.and theynwould still be rich. bucket some cost controls and taxes where needed, and we would have a brighter society. doom and gloom are the mantra to keep everyone wanting and seeing no light at the end of outter space. hense, we pay the billionaires taxes to make them safer to hoard more, while they use America as some welcome mat for their muddy shoes. reinvesting their hoard into the likes of blackrock at 7% a year, and never seeing taxes unless they spend it. instead of rewarding the surfs who are demanded by the rich to sweat and kill themselves for any wage,while corps, investors musk,etc,look at stats whereas, a 1% lose rate from dying on the job as acceptable. seriously, that is the stat used in investor owned trucking companies..
The Soviet government failed. Why? Authoritarianism, not socialism.
There was an era of experimentation with various extreme forms of government and economic systems, which is over. What’s been found to work best is a liberal democracy with a strong executive, a mixed economy of socialism and regulated capitalism, coupled with a graduated income tax to redistribute wealth from the effects of capitalism back to those who create wealth from those who buy it through investing.
Now, the system needs to be tuned, not replaced, by attention to detail by well-meaning and well-trained public servants.
This election should be about filling jobs with well-meaning and well-trained public servants, but it is not. It seems to be about repelling attacks on what works instead of tuning what needs additional optimization.
Seems unlikely either party would be willing to put out a more accurate report that would, by default, make that party look like they presided over a significant increase in “unemployment”.
Not to mention that the true “living wage” varies wildly depending on where you live, Manhattan v/s Montana for example. MIT has a great database for this https://livingwage.mit.edu/.
Sheila writes, “We can’t fix a problem we can’t properly define.”
If the issue is unemployment, why haven’t Wharton economists with the federal government set out to define it and measure it so everybody is on the same page?
Because the percentage of underemployed or low-wage employment isn’t very flattering for the oligarchy running the show, it also reveals rates that reflect negatively on the “greatest economy in the world.”
And the worst outcome would consist of angering the plebes and serfs. The oligarchy needs to keep us fighting over issues like immigration and abortion so we don’t come to realize that it’s class warfare, and instead of turning on each other, we need to turn on the oligarchy.
However, I spent less than five minutes on Facebook this morning and saw two stupid memes being shared amongst my Republican friends, so I don’t hold out much hope for humanity. I commented on one yesterday about the price of gas and inflation 4 years ago and reminded folks of the shutdown of the global economy due to Covid and lack of demand versus the re-opening of the global marketplace with high demand for goods and low supply because supply chains were broken. The responses I got weren’t even coherent. They have no clue, which makes them very easily manipulated. That’s the role of the media today instead of being the Fourth Estate and holding our government accountable.
Note to all Christian Nationalists: Jesus, by your definitions, was a WOKE SOCIALIST of the first order. These deluded folks can’t even get out of their own way.
Since teachers remain the lowest salaried positions requiring a college degree, aren’t they part of the “under-employed” too?
Whichever percentages one wants to use, corporate/banking America has seen to it that the relativity of wages to cost of living remains unfavorable to working people. It’s what unregulated capitalism does … and has always done. Our original capitalists in southern states, for example, based their entire agrarian economy on free labor, aka, slavery.
The divisions between the haves and have-nots has ALWAYS been part of the human condition ever since the invention of economics. We are compelled to exploit one another for our own survival – since we are mostly not worried about being eaten by leopards. So, communication “variations” should come as no surprise to anyone.
So, Todd, you have described a serious part of the problem with “They have no clue.” And the R’s want to further destroy what is left of our education system.
And, you probably showed exactly why Sheila wrote this blog installment.
Todd and Vern, very good points today. Vernon you nailed your comment today. You are absolutely correct at Christ would have been considered a socialist. That is if you would have been involved in politics today.
Todd, that’s the issue with supply chains. Supply chains should be located in the country where they are most used. Not somewhere else that cannot guarantee the workforce, or the quality of work for that matter. And some cases wages are pennies on the dollar. Remember when it came out that some of the Apple supply chain manufacturers had fences and barbed wire to keep people in? I believe it was China.
The workers might as well be living 2, 3, 4, 500 years ago, because human existence has not changed. People are still used as slaves. The wealth does not trickle down, just like Vern mentioned about Manifest Destiny and the Agrarian Society based on Slavery. The labor is bought once, so all profits go to the owner. It doesn’t matter if one is sick, or one has a family, no work, no food, no shelter, and forget education or health care.
Folks don’t realize, when those in power have eaten their opposition, they eat their own! In this system, they’re always has to be someone at the bottom. A rising tide can’t lift all boats, especially if there are no boats to lift!
I attended an AMWAY event once, when I was a grad student. There was a part of his spiel that has stuck with me all these years.
“Nomenclature is extremely important I don’t have. DOGS, I have SECURITY ANIMALS. I don’t have a DEN in my house, I have a HOME OFFICE. I don’t have a CAR, I have a DELIVERY VEHICLE. And if I think it’s good for my business’s image to deliver cartons of SA-8 in a Rolls-Royce, there’s nothing that the IRS can say about it.”
The disconnect between the employment rate and the under-employment rate goes a long way toward explaining why even when things were doing better under Obama and things looked OK under Trump, it alway felt like things were just at a standstill and not actually doing well.
I don’t think the definition of the employment rate is a terrible thing, I think we just need to be smarter to know that number ignores a huge part of the picture and that there is other data we should be acting on.
A $17 or $20 an hour minimum of wage should not be unreasonable.
If you really want to lose your s—, look at what the Indiana DOE is trying to do to graduation standards. It’s the Chamber’s wet dream, all about training and downgrading academics. And they are doing it quickly before people get the word, and they apparently are prepared to steamroll it through and not only destroy the futures of intelligent kids in Indiana (because who needs those troublemakers, am I right?), but more importantly inspire the sort of people who vote blue to get the hell out of the state for the sake of their kids.
Anyone who focuses on just one or two pieces of data is missing the forest for the trees. I researched Sweden’s unemployment rate and it was over 9% in June. However, their labor participation rate was 79%. Our unemployment rate was just over 4% and our labor participation rate was about 63%. Which country has a better safety net? Who’s better off, who invests more in education and child care?
One of your best and most cogent arguments ever. Thank you for the insight.