Matthew Boesler — Goldman's Jan Hatzius: People Are Looking At The Wrong Unemployment Rate

U3 v. U6.

Business Insider
Goldman's Jan Hatzius: People Are Looking At The Wrong Unemployment Rate
Matthew Boesler

Lynn Stuart Parramore — Half Lives: Why the Part-time Economy Is Bad for Everyone

Between late 2007 and May 2013, the number of part-timers jumped from 24.7 million to 27.5 million. A 2013 Gallup poll shows that one in every five workers is now part-time. Some folks, like students, work part-time because they want to. Nothing wrong with that. But involuntary part-time employment is not a choice, it’s a burden. Often it means substandard jobs with crazy schedules that don’t pay nearly enough. According to the Labor Department, as many as a third of all part-timers fall into the involuntary category....

Part-time workers are far more likely to be paid minimum wage than full-time workers (13 percent v. 2 percent). As they struggle to make ends meet, many will take on multiple part-time jobs to compensate for indadequate hours and pay. Involuntary part-time employment stigmatizes workers, attacking their self-esteem and diminishing their expectations for the future. It disproportionately impacts women, younger workers and minorities....

In the past, research on employment usually focused on only two categories of people: the employed and the unemployed. But in the last decade or so, more studies have devoted attention to the plight of the forced part-time worker and the underemployed. The findings are alarming.

The American Psychological Association reports a variety of ailments associated with underemployment, including depression, anxiety, psychosomatic symptoms, low subjective well-being and poor self-esteem. Researchers have found that full-time work is critical not only to the mental well-being of workers, but to their physical health as well. An increase in chronic disease is but one of the ways that forced part-time workers suffer.

On a macroeconomic level, plenty of negative effects pile up when people face the kind of insecurity that forced part-time work often brings. They may squirrel away every penny to cover surprise medical expenses, for example, which hinders the whole economy: When people don't have money to spend, businesses can’t sell products and services. Part-time workers become increasingly dependent on public services, which strains state and municipal budgets.

AlterNet
Half Lives: Why the Part-time Economy Is Bad for Everyone
Lynn Stuart Parramore

Clonal — Fred chart of U6

Page source

Clonal:

The chart needs a bit of explaining. This is standard unemployed/underemployed that go into the u-6 plus all the people that are no longer in the work force because they cannot find employment.

Till 2000, the ratio of (people not in the work force)/(Total Labor Force) was steadily declining and had reached a figure of 48%, and this ratio had been declining since 1948. Suddenly, after 2000, this ratio has steadily increased. So id I subtract the low point from the ratio, I get the amount of adjustment needed for the U-6 to assume the same labor force participation that existed in 2000. I add this back to the U-6 to get my corrected U-6.

The decline in the ratio was obviously coming from the addition of increasing number of women to the work force.

The increase in the ratio can come from two possible sources.


1) An increase in perceived family wealth, so that one partner decides that it is no longer necessary to work.

or


2) People can no longer find a job, no matter how hard they try.



You be the judge as to which of the above two factors apply.