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Friday, December 02, 2016

Willfully or not, this MSNBC piece distorts the BLS employment situation report and subtracts from the sum of human knowledge

So MSNBC has a post up with this headline:
What are 95 million Americans doing out of the labor force?

In which the reported proceeds to write this:

“…the nettlesome problem of too many people who find it's just easier to collect welfare and other transfer payments rather than go back to work…”

Let’s start with some reality checks: 

The unemployment rate is a measure of the percentage of people who are not employed, but who are actively seeking work. If you are not actively seeking work, you are not counted as unemployed. So, for example, my wife is not actively seeking work. She will probably never again actively seeking work. She should be counted as unemployed? Of the 60+ students in my two classes this semester, over 50 are not actively seeking work. They are attending college full time. They should be counted as unemployed? Most of those 95 million people are either retired or full time students.

 The real issues arise in three places. One is "discouraged workers," people who would like to work, but have quit looking because they are, well, discouraged by their prospects. There is an alternative unemployment rate, calculated and published every month by the Bureau of Labor Statistics that includes them.

 The second is people who are employed part time, but want full-time work. Think of them as partly employed, partly unemployed.  There is an alternative unemployment rate, calculated and published every month by the Bureau of Labor Statistics that includes them.


The third is people receiving disability benefits and not working. Now, this depends on whether you think that the disability system is "broken," that there are a whole lot of people receiving disability benefits who could be--and who ought to be--working. My own reaction to what I know about the disability system is that to get disability benefits, one really does have to be disabled. So I don't take this to be a big deal. (Others may disagree.)

  (You can find those alternative measures of unemployment here:  U6, which is the broadest measure of underutilization of labor is down from 9.6% in November 2015 to 9.0% in November 2016.)  In fact, the number of people not in the labor force has increased  by less than 1% over the past year, while the relevant population has increased by nearly 2%.
Finally, the notion that millions of people can collect "welfare" (there is almost no cash assistance for people able to work any more) and the "other transfer payments"--SNAP (a/k/s Food Stamps), renter's assistance (woefully underfunded)--is all but laughable.

When crap like this winds up being widely disseminated, it reduces, rather than adding to, the stock of human knowledge.


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