Three ways of looking at Employment

[cthulu2016]

Last edited Fri Jun 1, 2012, 12:50 PM - Edit history (1)

Of these three employment statistics which one looks like the real world?

To me, the employment-population ratio (black line) best tells the tale, avoiding all the definitional "who is looking for work" type issues and really showing how this is not a normal recession. In all the other recessions (going back to 1960 as shown here, but you can take it back further) we drop and then rise. Drop and then rise.

But in this event we dropped and then went sideways, finding stability at a lower new-normal.

When this whole mess started there was a lot of public debate about whether the event would be "V-shaped" or "L-shaped." The two demand very different policy responses. You couldn't ask for a more L-shaped event than the employment-population ratio delineates.
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The employment/population ratio is affected by demographic factors, of course. More retirees or college students would make the p/e ratio lower while not increasing unemployment. So with this type of statistical series it can be useful to isolate the "prime working age" population to make sure the decline is from the economy, not from demographics.



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Charts from CalculatedRisk blog which is a well-respected daily analysis of economic statistics from a non-RW perspective. And it always has awesome charts.

http://www.calculatedriskblog.com/

[lumberjack_jeff]

1. Great graph. nt

[cthulu2016]

2. And the now-classic one

that is updated every month but always looks eeriely the same:

[malthaussen]

3. Ever think about prison inmates?

We incarcerate more people than any other country on the planet. We incarcerate more people than some continents. I submit that they should be included in the Unemployed, since they are assuredly out of the labor pool.

-- Mal

[Wounded Bear]

4. Unfortunately, they're not....

In many prisons, prisoners are put to work at minimal wages and exploited for corporate good.

They are in the work force, but not documented. In that regard, they drive wages down.

[malthaussen]

5. Right, of course

What I should have said was "out of the competitive labor pool." The labor we do extract from them would certainly contribute to driving down wages, and I do believe there have been some proposals floating around recently (GA? AL?) to extend the use of prisoners for forced labor... err, "social service" or whatever spin they'll use.

On the one hand, if done with a true eye to the public good, putting prisoners to work sounds like a good idea. But alas, ideas like that never do seem to be implemented with an eye to the public good.

-- Mal

[hunter]

6. This

[cthulu2016]

7. ...