What we uncovered shocked us. The bottom line is that, for 20 years or more, including the months prior to the election, voter perception was more reflective of reality than the incumbent statistics. Our research revealed that the data collected by the various agencies is largely accurate. Moreover, the people staffing those agencies are talented and well-intentioned. But the filters used to compute the headline statistics are flawed. As a result, they paint a much rosier picture of reality than bears out on the ground.
Take, as a particularly egregious example, what is perhaps the most widely reported economic indicator: unemployment. Known to experts as the U-3, the number misleads in several ways. First, it counts as employed the millions of people who are unwillingly under-employed — that is, people who, for example, work only a few hours each week while searching for a full-time job. Second, it does not take into account many Americans who have been so discouraged that they are no longer trying to get a job. Finally, the prevailing statistic does not account for the meagerness of any individual’s income. Thus you could be homeless on the streets, making an intermittent income and functionally incapable of keeping your family fed, and the government would still count you as “employed.”
I don’t believe those who went into this past election taking pride in the unemployment numbers understood that the near-record low unemployment figures — the figure was a mere 4.2 percent in November — counted homeless people doing occasional work as “employed.” But the implications are powerful. If you filter the statistic to include as unemployed people who can’t find anything but part-time work or who make a poverty wage (roughly $25,000), the percentage is actually 23.7 percent. In other words, nearly one of every four workers is functionally unemployed in America today — hardly something to celebrate.
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This is really bad, with some pretty serious misinterpretation of statistics (e. g. assuming that everybody working part time would prefer to work full time but can’t find a full-time job). He’s also acting like he’s exposing some deep secrets, but this is stuff anyone who follows economics stats would already know.
I’m hoping to find some time to write up a full debunking.Report
I would *LOVE* to read a full debunking.
I wouldn’t mind reading a loosey-goosey one-cheeked debunking.Report
Yeah his notion of a person working full time for minimum wage as being functionally unemployed miscalls takes my entire state’s economy down. And I think a LOT of Mississippians would disagree with that statement.
Looking for ears to your debunk.Report
Even in Mississippi, the median hourly wage was $18 in 2023. Certainly not great, but 2.5 times the minimum wage.
https://www.bls.gov/oes/2023/may/oes_ms.htm
Nationally, the 10th percentile weekly earnings for full-time workers is $611, and the BLS considers “full time” to start at 35 hours, not 40. As far as I can tell, essentially nobody works full time for federal minimum wage anymore. Even part-time work rarely pays that little except in tipped jobs.
https://fred.stlouisfed.org/series/LEU0252911200QReport
While it is true that this person at the very least plays fast and loose with some of the statistics, I think their broader message is correct. That is, viewed with traditional metrics, the economy looked pretty good last year. Viewed with expanded metrics, such as under employed, people who’ve stopped looking at work, prices of everyday goods relative to what they were a few years earlier, etc., last year’s economy looked pretty bad, at least if you were not already wealthy.
The liberal/Democratic narrative both in the lead up to and with extra vehemence after the election, was that people were being deceived into believing that the economy was bad, and they were worse off financially than they were in 2020. In addition to being ridiculously condescending (as though people can’t look at their bank accounts and credit card statements, or the price of a new car or a home, or home repairs, or groceries, etc.), this narrative was also just wrong, and it’s good that people are trying to point this out with numbers, but it’d be better if they were using the numbers correctly.Report
In my estimation It’s all in the cost of living. You can have a job and still feel poorer. People lost a significant chunk of their actual income from inflation and the cost of money made it harder to make big purchases like a home or car. People feel those changes in a way that they don’t feel a low unemployment rate or good stock market.Report
Here’s a bombshell from Zillow via Fortune Magazine:
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Yea I don’t know how anyone who isnt independently wealthy has bought a house since 2022 or so.Report
Heh… what if we wake up to find that *all* the narrators are unreliable?Report
Noah Smith goes through a fairly thorough refutation of this in a recent post (it’s item number 2): https://www.noahpinion.blog/p/at-least-five-interesting-things-978Report
I wasn’t really convinced. I think Smith is right in the sense that the government data isn’t wrong or misleading. It just isn’t measuring what is actually impacting peoples’ assessment of the economy.Report
This, which is something Smith and Stensil and the like simply can’t comprehend.Report
I mean, on the facts he’s simply correct – Ludwig mishandled the data.
Of course, that’s not the same as saying people don’t have reasons to be angry about the economy but that’s a separate issue. The reason people feel bad about the economy is that while inflation has gone down, prices are still much higher than they were 5 years ago and wages are still catching up. But nothing Smith said contradicts that.Report