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Unemployment Numbers, Now With More Biden…

November 15th, 2016 · No Comments

I can’t resist appropriating a good meme…

It occurred to me earlier that some people didn’t get the joke, so allow me to ruin it by explaining. Donald Trump, staying in theme with the fake news that made him look good during his campaign (and after I guess), has on numerous occasions claimed that the “real” unemployment rate is around 40 percent rather than the 5 or so percent that the government reports. His general idea appears to be that the 5 percent doesn’t include nearly enough people who should be working but aren’t, but to get to Trump’s number you’d basically have to count every student, grandma, stay-at-home-mom-married-to-i-banker, etc. as unemployed. While it is true that convincing them to work would increase output (i.e. GDP), I tend to recall that history suggests that people don’t like being forced to work, so the 40 percent calculation isn’t really helpful from a policy perspective as an indicator of economic health. Besides, the government already publishes a number of “alternative measures of labor force underutilization,” which try to capture discouraged and underemployed workers that the main unemployment number doesn’t account for. (The government is clearly better at numbers than coming up with sexy names for said numbers.) To be fair, however, labor force participation has been declining since about 2007, which does give a bit economists a bit of pause, though it’s important to understand a bit more about the drivers of this decline (hi, retiring baby boomers!) before deciding what, if anything, to do about it.

I’m sure Ivanka’s going to explain this to him any day now.

Tags: Macroeconomics

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