The Complete Picture is the Only Useful One August 1, 2008Posted by Jim Satterfield in 2008 Presidential Campaign, Business & Society, Economics, Politics.
Every time you turn around there is someone using the unemployment rate to make a point, good or bad, about the economy. 5.5% isn’t that bad. 5.7% isn’t good enough. The simple sound bite versions of that message go on and on. But notice that when pgl at Angry Bear is writing about the unemployment rate he includes some very important data that simple numbers almost never includes, the labor force participation rate. No one discussing jobs is doing a decent job of it if they only use the basic unemployment rate. But there are other things to factor in as well.
There is also underemployment, a growing problem as this NY Times article shows. Whenever a politician says that they want to do this or that to help create jobs call them on whether the jobs are any good or not. How much do these jobs they are promising pay? Not in terms of a per hour wage, but how much when you take into account the number of hours. Are there benefits? Vacation? Sick pay? A 401(K) or some other retirement arrangement? How many hours will the employee be able to work? All jobs are not created equal and unless you know the details it’s far too easy to think that things are better (or worse sometimes) than they really are. Keep that in mind through the campaign season.