Happy Unlabor Day!

It’s Labor Day here in the USA and that means it’s time to celebrate the workers of America.  Unfortunately, this is a tough day to celebrate when so many people are out of work.  The current 7.4% unemployment rate is a level that’s historically consistent with past recessions.  So, if you have a job be thankful.  And while we celebrate the employed we shouldn’t forget about all those unemployed out there.

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Cullen Roche

Cullen Roche

Mr. Roche is the Founder of Orcam Financial Group, LLC. Orcam is a financial services firm offering research, private advisory, institutional consulting and educational services. He is also the author of Pragmatic Capitalism: What Every Investor Needs to Understand About Money and Finance and Understanding the Modern Monetary System.

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Comments

  1. The unemployment rate is a difficult to reconcile statistic with the economy. Too much depends on demographics and sampling criteria. If you look at the unemployment data and the Civilian Workforce participation rate it’s impossible to draw any conclusion. From 1965 to 1980 the participation rate rose at rates never seen before or since, yet mostly unemployment increased. When d CWp/dt fell off or went negative, unemployment soared. Now d CWp/dt is very negative (at a rate never seen before) yet the projected UR is also negative.

    Both are imperfect measures, but when the signs of the two are completely opposite then there is likely something really bad happening (even taking into account boomer demographics and economics).

    http://research.stlouisfed.org/fred2/series/CIVPART?cid=32443

  2. I really think the whole issue of economics and employment would benefit by moving away from the term “unemployed” with consideration going towards the term “Underemployed” which catches both unemployed and the nuances of degrees of underemployment. Ithink we are missing something of importance by dwelling on unemployment numbers.

  3. There is no “true” unemployment rate, just various indicators of the state of the labor market, and they all confirm that it is pretty bad. In economics measurements are never perfect, so we use what resources we have to construct policies. Krugman explains this much better than I:

    http://krugman.blogs.nytimes.com/2013/07/14/there-is-no-true-unemployment-rate/

    As I like to say, it is very disappointing that the economics debate has, for the most part, turned its back on the unemployed. Full employment, within the framework of a capitalistic private enterprise system, should be the ultimate goal of economic policy, and every choice among policymakers should be in the context of moving the economy in this direction.