
We’re Getting Close to Full Employment - nature24
https://www.nytimes.com/2017/05/05/upshot/were-getting-awfully-close-to-full-employment.html?hp&action=click&pgtype=Homepage&clickSource=story-heading&module=first-column-region&region=top-news&WT.nav=top-news&_r=0
======
rayiner
I wonder if the author has ever taken a stroll around downtown Baltimore on a
weekday afternoon and seen all the people milling about who are "fully
employed."

You need to carry that "employment to population ratio" graph out earlier than
1998:
[https://fred.stlouisfed.org/series/LNS12300001](https://fred.stlouisfed.org/series/LNS12300001).

The employment ratio for men is down from 80%+ in the 1950s to ~65% today.
Many of those men are of course in school, etc., but that merely reflects the
weakness of the economy. You wouldn't expect a larger fraction of people to
voluntarily go to school than in 1950 unless economic pressures compelled them
to. Indeed, given that school is far more expensive today, you'd expect
exactly the opposite.

~~~
harryh
When you go back before 1998 the biggest two reasons for the reduction you see
have nothing to do with the economy. They are, in fact:

1) Women entering the workforce

2) An aging population

I think it makes more sense to look at this graph:

[https://fred.stlouisfed.org/series/LNS11300060](https://fred.stlouisfed.org/series/LNS11300060)

Which shoes that the % of prime age people in the work force is up
significantly since the 50s/60s/70s.

~~~
rayiner
I'm not talking about the economy so much as the idea that everyone who wants
a job has one (vis-a-vis full employment). Presumably men want jobs at a
similar rate as they did in the 1960s (modulo the aging aspect which I had
forgotten to account for).

~~~
cgmg
That's not what full employment means.

[https://en.wikipedia.org/wiki/Full_employment](https://en.wikipedia.org/wiki/Full_employment)

~~~
cgmg
Why did you downvote this? Care to explain?

------
kqr2
Also should consider the number of people who are going on permanent
disability:

[http://www.npr.org/sections/money/2013/03/22/175076784/episo...](http://www.npr.org/sections/money/2013/03/22/175076784/episode-446-the-
invisible-14-million)

    
    
      The number of Americans receiving federal disability
      payments has nearly doubled over the last 15 years. 
    

[https://www.thisamericanlife.org/radio-
archives/episode/490/...](https://www.thisamericanlife.org/radio-
archives/episode/490/trends-with-benefits)

~~~
1024core
This is the hidden secret of "unemployment". A lot of people have just given
up looking for employment, and are on SSDI or some other such program. The
number of Americans on SSDI went from about 4M to 9M between 1998 and 2014:
[https://www.ssa.gov/oact/STATS/dibGraphs.html#3](https://www.ssa.gov/oact/STATS/dibGraphs.html#3)

------
lukasb
Apparently if you break things down by gender the story is not as positive:

'But purportedly “near full employment” conditions notwithstanding, the work
rate for the twenty-plus male was more than a fifth lower in 2015 than in
1948.'

[http://www.mauldineconomics.com/frontlinethoughts/men-
withou...](http://www.mauldineconomics.com/frontlinethoughts/men-without-work)

~~~
ceejayoz
I'd be interested in how many stay-at-home dads are in that drop.

~~~
theparanoid
Approximately 0%. Outside the upper-middle class people don't have the luxury
of not working. Real income has stagnated for middle and lower income people.

~~~
brewdad
As child care costs have risen, at least some families in the middle have
concluded that it makes little sense for the parent with worse career
prospects to work solely for the purposes of paying day care costs. When
stagnated incomes can no longer pay for the expenses required to work, working
makes less sense financially.

------
elvirs
man I know people working as bank tellers, who rent just a room and still cant
make ends meet. I dont think the 'employment' is good enough anymore. The tech
who services my car at the premium car dealership said he has another job in
addition to this full time job and still cant afford stake at home. I think in
last 10 years a lot of new living expenses have been added to our daily life.
cellphone bill, internet bill, all kind of bullshit mandatory donations to
kids school, new 100 dollars per year for each point above 3 points on driver
license, school books cost like 10 times more than they used to, have to have
alarm system costing 30 dollars per month to get a property insurance
discount, all that shit. wages did not keep up with raising costs. i see too
many employed hard working honest people whose average checking account
balance is usually a 2-3 digit number

~~~
vacri
> _man I know people working as bank tellers, who rent just a room and still
> cant make ends meet_

It's always been like this for people. There's this myth these days that all
the employed people of yesteryear had comfortable lives. There's always been a
large portion of society struggling to make ends meet - until recently, it was
basically the definition of 'working class'.

As an example, ask your bank teller friend if they've ever had to darn a sock.
Struggling to make ends meet looks a little different these days, but it's far
from a new phenomenon.

~~~
mikekchar
Honestly, I think the biggest difference is in expectations. Look at this
graph [0] from an NPR article.

The amount of disposable income spent on food has almost been cut in half
since 1960. The example of darning socks is a good one. When people darned
socks it was not really because they were poor, per se. It was because socks
were expensive. Now socks are considered to be disposable items.

When I grew up, my mother had a carbon steel kitchen knife. Singular. I wander
into people's homes and it's rare that I see less than 5 or 6 crappy knives
that are, again, basically disposable. How many people have a sharpening stone
in their house (and I'm not talking about the next-to-useless honing
instrument that people buy and also don't know how to use)?

You've got people spending over $100 per month on cable TV, internet and cell
phone. Not just one cell phone either. Every single person in the family needs
one, so that they can play Candy Crush and take pictures of their breakfast
(pancakes made from a mix because people have lost the ability to add baking
powder to flour). Darning socks? Who has time for that???? Socks are free
anyway.

Look at this graph for real disposable income since 1929 [1]. Money is like
computer memory. The more you have, the more inventive ways you will find to
use it. There is never enough. I wonder how many people would actually be
better off spending an evening darning socks instead of stressing about how
many "likes" they have on Facebook.

[0] [http://media.npr.org/assets/img/2015/02/27/thr-income-
spent-...](http://media.npr.org/assets/img/2015/02/27/thr-income-spent-on-
food_custom-ed63b133b0b3914191e299c179a61271caa0db71-s800-c85.png)

[1]
[https://fred.stlouisfed.org/series/A229RX0](https://fred.stlouisfed.org/series/A229RX0)

------
kbutler
The official unemployment rate includes only those who are "actively seeking"
employment, by specific measures.

It does not include those who have given up looking for work or don't consider
the available work sufficiently rewarding. A sufficiently strong recovery
brings more of those to find work.

Labor force participation may be a better measure.
[https://data.bls.gov/pdq/SurveyOutputServlet](https://data.bls.gov/pdq/SurveyOutputServlet)

~~~
mrbabbage
Did you read the article?

> Broader measures of unemployment tell the same story. The so-called U-6
> rate, which captures people who are working part-time but want a full-time
> job, and those who would like a job but have given up looking out of
> frustration, is also back down to its level before the last recession. It
> fell to 8.6 percent in April from 8.9 percent, and the last time it was
> lower was November 2007.

~~~
notacoward
Yes, but does a U-6 level of 8.6% constitute "full employment"? According to
the technical definition they're unrelated. Less formally, 8.6% unemployed,
underemployed, or discouraged seems quite a bit short of full anything.
Pointing out flaws in the original definition or terminology in no way implies
that the GP hadn't read the article, and the suggestion to prefer labor force
participation is a good one.

~~~
dragonwriter
"Full employment" is a technical term that means no cyclical unemployment; it
can involve arbitrarily large quantities of non-cyclical, e.g., frictional
and, more to the point, structural (mismatch between skills and demand)
unemployment.

It seems intuitively likely to me that _structural_ unemployment is becoming a
bigger problem (and that structural rather than cyclical factors are an
increasing factor in discouraged workers.)

"Full employment" doesn't mean no employment problems, it just means that the
problems are non-cyclical.

------
notacoward
You know how else you get to "full employment"? By eating all the unemployed.
It's scarcely less ethical than what the government and NYT are doing here.

(1) Define "full employment" as 95.3% of the "workforce".

(2) Define "workforce" to exclude arbitrarily many groups.

(3) Ignore all the people who've been forced into one of the excluded groups.

This is not full employment in any reasonable sense of the word. Not unless
"full health care coverage" is 95.3% of people who are above the poverty line
and have no preexisting conditions.

~~~
tunap
A modest proposal, indeed. Let's not leave out the underemployed, degree
holding burger flippers and Wally World clerks. The Circle K by my house had
an architectural engineer for awhile, but he got away.

[https://en.wikipedia.org/wiki/A_Modest_Proposal](https://en.wikipedia.org/wiki/A_Modest_Proposal)

------
seoguru
The official unemployment rate (U3 numbers) should be ignored. This number
serves little purpose other than being a political tool today.

[https://www.facebook.com/ellis.winningham/posts/142209383784...](https://www.facebook.com/ellis.winningham/posts/1422093837849460)

~~~
virmundi
To further this, U6 is around 8.6% - 1.

1 - [http://www.macrotrends.net/1377/u6-unemployment-
rate](http://www.macrotrends.net/1377/u6-unemployment-rate)

~~~
ganfortran
U-6 is close to prior Great Recession too, according to the chart.

~~~
HarryHirsch
Once salaries start rising I'll believe you.

~~~
ganfortran
U don't have to believe anyone.

But if u believe in math, then even with this U-6 metric, it is back to 2007
level. Meaning this U-6 metric is not really an indicator diverging from the
official claim either.

~~~
virmundi
It's positive in that it's tracking with U3. My point is that it unemployment
on a daily basis, what mainstream America feels, is still twice as high as the
"Full Employment" target set by the Feds.

As to purchasing power, I'm not able to readily find numbers not that. Last I
heard, people are working longer hours for the same pay they received in
2007/8\. If that's true, they are functionally making less money. I've seen it
first hand. People working 45-50 hours to make up for short staffing. However,
I only have a few localized, anecdotal data.

------
deft
What does being employeed matter? Having a liveable salary and average
lifestyle for all is more important.

------
yourthrowaway2
I'm just going to leave this here:
[http://www.shadowstats.com/alternate_data/unemployment-
chart...](http://www.shadowstats.com/alternate_data/unemployment-charts)

But I fully expect to be down-voted out of reality

~~~
mikestew
I downvoted the comment because you were lazy and just barfed up a link to
$DEITY only knows where with no further commentary. The fact that your source
is, how to put this politely, frequently demonstrable bullshit is secondary.

~~~
yourthrowaway2
Sorry I clearly misunderstood. I thought the OP was demonstrable bullshit.

~~~
geofft
Can you provide arguments for this claim so we can debate each other's claims
like intelligent people, instead of just linking data without context and
linking curt replies?

See this article from the founder of this forum:
[http://www.paulgraham.com/disagree.html](http://www.paulgraham.com/disagree.html)

------
highd
Report:
[https://www.bls.gov/news.release/pdf/empsit.pdf](https://www.bls.gov/news.release/pdf/empsit.pdf)

My comment was going to be about how unemployment doesn't count multiple very
large and important groups, including those looking for work for 12 months or
more. But actually it looks like those numbers have pretty much all improved
as well, and some even more significantly than the base unemployment rate.

Discouraged workers dropped by about ~20% from last year, marginally attached
workers dropped by about ~10%. Long-term unemployed dropped by ~20% from last
year. At first glance that seems pretty crazy.

I'd love to see some analysis on this.

------
chrismealy
I'll worry about too much employment when labor's share of national income
returns recovers.

------
muninn_
So if we are saying this isn't that great of news, what should I make of some
European countries?

------
virmundi
I had this conversion with a feminist. I claimed that a large reason for wage
stagnation is that women hit the workforce en masse in the 1970s. That's when
the stagnate wages started. I made no judgement on women working. I just tried
to explain why everyone's wages have barely moved: more labor supply.
Compounding this is global labor. Sadly, the individual became quiet combative
about these two facts.

~~~
fulafel
Increased labour supply doesn't naturally lead to lower wage growth, so she
was right.

~~~
wahern
Huh? As a general matter, increased labour supply _does_ naturally lead to
lower wage growth. That's simple supply and demand, which is about as
"natural" of a phenomenon as you can get.

It doesn't necessarily lead to lower wage growth, of course, particularly when
you take into account other factors that might change contemporaneously. For
example there might be union or political pressure to redistribute more
profits to workers.

But the point is that with an increase in the labor supply, ceteris paribus,
we should expect lower wages, and thus lower wage growth averaged over the
period before and after the change in labor supply. The persuasive burden
should be on someone trying to prove otherwise. That burden might be easy or
difficult to overcome, but we shouldn't mistake where the burden should lie.
Otherwise we're rejecting basic, sound economic theory.

~~~
fulafel
But of course it's not "ceteris paribus" since those new labourers are are
wage earners, their consumption results in more economic activity, and so the
wheel of prouction and consumption spins faster.

Take a thought experiment in the opposite direction, if 50% of the labour
force decided to drop out, and so there would be about a 50% drop in GDP - do
you think there would be big real wage increases for those who remained
employed?

~~~
wahern
If 50% of the labor force dropped out, I would absolutely expect wage
increases. I'm ignoring the claim of a 50% drop in GDP because that muddies
the waters, and is conclusory; precisely the thing I think we avoid if we
stick to my original point.

Yes, we know that "ceteris paribus" is a lie--other elements of the equation
will always be different. Moreover, there are complex feedback mechanisms at
play. But _how_ they're different is what matters, not simply that they're
different.

Precisely because those second-order effects are so complex is precisely why
people relying on them for their argument should hold the burden of
persuasion. I don't think that should be controversial.

Yes, it's a PITA. I'm tired as much as anyone else of conservative economists
and conservative politicians applying economic laws too simplistically,
arriving at conclusions completely at odds with _reality_. When our
conclusions differ from reality, that's a strong hint we should look for the
flaw or missing element in our model.

But none of that justifies shifting the burden. Once you shift that burden
you've effectively discarded the laws of supply & demand, and have put
earnest, learned critics on the same pedestal as charlatans and radicals. Once
you prime people to accept the more complex, non-intuitive answer over the
simpler answer, you've poisoned public discourse.

That's how you end up in a situation like Venezuela. Venezuela isn't broken
because it's corrupt; all those working poor knew the government was corrupt
while voting for them. But people there believed the destructive and poisonous
criticisms of liberal economics, and so are simply no longer able to accept
even the most basic precepts of supply & demand.

