True Rate of Unemployment

Original Article ↗ Hacker News Discussion ↗

An alternative “True Rate of Unemployment” metric argues that official U.S. jobless figures understate economic hardship by excluding people who want full‑time work but only have part‑time jobs, as well as those earning below a proposed living wage of about $26,000. Commenters note that this broader measure is much higher than the headline rate yet largely moves in parallel with it, prompting debate over whether it reveals anything new or simply repackages existing BLS measures like U‑6. The exchange widens into concerns about low‑wage work, welfare cliffs, housing and land costs, and whether changes to tax and labor policy are needed to reduce the large share of people who are technically employed but barely getting by.

Methodology vs Official Unemployment Stats

  • TRU (True Rate of Unemployment) counts people who:
    • Lack a full‑time job (35+ hours) but want one,
    • Have no job,
    • Or earn below a “living wage” (≈$26k, inflation‑adjusted).
  • Several commenters note this is conceptually close to BLS U‑6 (broader underemployment), and say the dramatic gap vs the headline U‑3 comes largely from mixing in low‑wage workers.
  • Others argue TRU is more inclusive and intuitive, highlighting people who “would gladly work” or are working but can’t live on their income.

Is There Really a “Revelation”?

  • Skeptical view: unemployment measures are mainly useful directionally; U‑3’s methodology is transparent and stable, and TRU mostly tracks the same ups/downs.
  • Supportive view: public and media misuse U‑3 as “everyone who wants a job but doesn’t have one”; TRU makes explicit how many are functionally not getting by, so it’s politically and morally important.

Living Wage, Poverty, and Transfers

  • Many think $26k/year is far below a true “living” wage in most of the US; some suggest rebranding as “surviving wage.”
  • Others counter that raw wages ignore tax credits and in‑kind transfers (SNAP, housing, Medicaid, refundable credits) that can roughly double cash income for low‑income families.
  • Follow‑up replies stress:
    • These transfers are often non‑cash, delayed, or hard to access.
    • Benefit cliffs mean small earnings increases can make households worse off.
    • Even with effective ~$50k “feels like” income, families are often still just scraping by, especially given housing costs.

Underemployment, Part‑Time, and Labor Force Definitions

  • People debate inclusion of:
    • Part‑timers who want full‑time work vs those happily part‑time,
    • Students, stay‑at‑home parents, retirees, disabled people.
  • Some criticize TRU’s wording for not clearly excluding retirees and others not seeking work, calling that misleading.
  • Repeated clarification that “labor force” in official stats already excludes many non‑seekers, and that employment status is binary (multiple jobs don’t show up).

Historical & Structural Context

  • TRU series suggests functional unemployment was higher in the 1990s; some doubt that matches lived experience and suspect definition effects.
  • Long digression links “barely getting by” to:
    • Housing and land prices,
    • Tax treatment of capital gains and real estate,
    • Proposals like land value tax and wealth taxes, with substantial disagreement about feasibility and side‑effects.

Data Presentation & Politics

  • Several criticize TRU graphs for non‑zero y‑axes and varying scales, seeing this as exaggerating race/sex differences and undermining credibility.
  • Others emphasize that multiple unemployment measures already exist, but political rhetoric and media typically fixate on the rosiest single figure.