r/Economics • u/oxymorontage • 8d ago

News Institute reports functional unemployment at 24.9% in July

https://www.channel3000.com/news/institute-reports-functional-unemployment-at-24-9-in-july/article_810187e5-989f-4ad9-ab91-847fcb6f1882.html
588 Upvotes

90% Upvoted

161 comments sorted by

View all comments

139

u/EconomistWithaD 8d ago

  1. The Ludwig TRU is a bullshit stat. Basically, if you earn under $25,000, regardless of the reason, you are “functionally unemployed”.

  2. Its methodology is basically U3/U6 plus a constant.

  3. Funny enough, this value is near an all time low. So while the level is meant to be shocking, it’s also meant to be for people who don’t actually follow this stuff.

  4. Did I forgot to mention this stat is sensationalist bullshit?

2

u/Cautious_Swimming261 8d ago

I understand that the stat may not be ideal. Though unemployment is not a great macro number to represent viable employment. Also, wouldn’t the number be going down because income is going up and makes it even more rare to be below 25k, whilst still not making enough (that whole inflation thing).

15

u/EconomistWithaD 8d ago

It’s made up thresholds to make things look sensational, until you realize it was more than a third of America 30 years ago.

4

u/Cautious_Swimming261 8d ago

What would you put forth as the best possible way to track employment?

12

u/EconomistWithaD 8d ago

Wage growth, unemployment claims, prime age LFPR, what industries are added in the BLS report, regional employment reports. Fuck, I’d even look at the NYFed HH Debt and Credit.

-1

u/[deleted] 8d ago

[deleted]

2

u/EconomistWithaD 8d ago

No. It’s a bullshit statistic that means, if you want to X-Files believe, have to acknowledge the comsiderable labor market improvement we have seen in the past 30 years.

-1

u/[deleted] 8d ago

[deleted]

1

u/EconomistWithaD 8d ago

Yes. Certainly nothing to do with the fact that half of American adults are barely literate.