[lavrov]

The point that he's making is not that individual observation should trump objective measures, but the epistemic claim that if what we perceive contradicts those measures, it's worth interrogating the validity of those measures.

I don't think that the particular example that you're giving is "fraught with peril". Note the lack of an upper bound on the labor force participation rate that you cite - 16+ includes people of retirement age, whereas the measure given in the article shows that the official unemployment rate for men 25-55 is just 1/3 of the "true" unemployment rate that includes disaffected workers. This is significant.

[rory096]

>whereas the measure given in the article shows that the official unemployment rate for men 25-55 is just 1/3 of the "true" unemployment rate that includes disaffected workers. This is significant.

Using that as the "true" unemployment rate is, frankly, bullshit. The number they're citing is the OECD "employment rate"[0][1], defined as the employed share divided by the total population in that demographic. Thus it includes the disabled, stay-at-home-parents, the leisure class, those enrolled in education, and anyone else who is not working but has no desire to do so. The decline is almost entirely driven by the reduction in labor force participation rate from 97+% in that demographic in the 1960s to 88.8% today.[2] Is it unreasonable to expect males may on average voluntarily spend 3 years outside the labor force during their prime years?

If you want to count discouraged workers, use U4 — which currently stands at 4.1% vs. the U3 at 3.9%.[3] (U3 is 3.0% for the demographic in question.[4]) U6, which adds all other marginally attached workers and those employed only part-time who'd like to be full-time, stands at 7.4%.

If your concern is falling LFPR, say so. If your concern is discouraged workers, use U4/U6. But don't change the denominator on the unemployment rate from the labor force to the whole population and act like it's some huge hidden increase the authorities have been concealing from us.

[0] https://data.oecd.org/emp/employment-rate.htm

[1] https://fred.stlouisfed.org/series/LREM25MAUSA156S

[2] https://fred.stlouisfed.org/series/LRAC25MAUSM156S

[3] https://www.bls.gov/news.release/empsit.t15.htm

[4] https://fred.stlouisfed.org/series/LNU04000061

[lavrov]

I don't agree that using the OECD employment rate is bullshit. The argument is not that at a single point, the fact that this other measure of unemployment is much higher than the standard measure shows that the economy is not healthy, the argument is that the divergence between the OECD employment rate and the standard measure indicates that the economy is unwell. If you deny this, then you're forced to argue that somehow the number of "disabled, stay-at-home-parents, the leisure class, those enrolled in education, and anyone else who is not working but has no desire to do so" has increased within the same demographic (25-55 males, so generally post-school), while wages have remained flat.

[rory096]

>this other measure of unemployment is much higher than the standard measure shows that the economy is not healthy

No it doesn't. Aside from it being a nonsensical measure of 'health', the overall 'employment rate' is well above pre-1990 rates (as women have continued to enter the workforce).[0]

>If you deny this, then you're forced to argue that somehow the number of "disabled, stay-at-home-parents, the leisure class, those enrolled in education, and anyone else who is not working but has no desire to do so" has increased within the same demographic (25-55 males, so generally post-school),

Of course it has. Being a stay-at-home-dad was unthinkable in 1950. Post-graduate education is increasingly common, as is mid-life career switching. I can think of many reasons why we shouldn't expect a 98% labor force participation rate from that demographic in this century.

[0] https://fred.stlouisfed.org/series/LREM25TTUSM156S

[lavrov]

You misread my comment - I'm saying that the argument is not that the fact that this other measure of unemployment is much higher than the standard measure shows that the economy is not healthy, but that the sudden divergence over the past decade hasn't been plausibly explained by anything except an increase in disaffected working-aged males.

>Of course it has. Being a stay-at-home-dad was unthinkable in 1950. Post-graduate education is increasingly common, as is mid-life career switching. I can think of many reasons why we shouldn't expect a 98% labor force participation rate from that demographic in this century.

All of the points that you raised should not show such a sudden effect in the past < 10 years.

[rory096]

What sudden divergence?

https://i.imgur.com/WZaIpjL.png

[byproxy]

It was pretty interesting (and disquieting) to see a linear trend.

I don't know how the statistics are gathered, but I wonder if they separate those who wish to/need to work from those who don't. For those who have given up searching, that is.

[smogcutter]

> I wonder if they separate those who wish to/need to work from those who don't. For those who have given up searching, that is.

Indeed they do. The rate you most commonly see tries to measure unemployment in the active labor force. If you're not actively looking for work, you're not counted as unemployed. There are other measures which do count "discouraged workers" and others not usually included. They're much higher.

[byproxy]

Yea, I was talking about further filtering "discouraged workers", or those who've given up searching for work. I think it'd be interesting to apply the "wish to/need to" filter to those who are employed, too!

This article[1] gets into a bit, but

"Some men choose not to work and can afford not to. That’s great, Furman says. But for many, probably most, dropping out of the work force not only means a lack of income but also a loss of the dignity that comes with not working."

still sounds like conjecture, to me.

[1]: https://www.brookings.edu/blog/up-front/2016/08/15/men-not-a...

[rory096]

>Discouraged workers are a subset of persons marginally attached to the labor force. The marginally attached are those persons not in the labor force who want and are available for work, and who have looked for a job sometime in the prior 12 months, but were not counted as unemployed because they had not searched for work in the 4 weeks preceding the survey. Among the marginally attached, discouraged workers were not currently looking for work specifically because they believed no jobs were available for them or there were none for which they would qualify.

https://www.bls.gov/cps/lfcharacteristics.htm#discouraged

[smsm42]

True but has a common failure mode, aka "how X won the election if I don't know a single person who voted for him?". It's rather hard to directly perceive a diverse 300+M trillion-dollar economy without resorting to some aggregating measures.

[enraged_camel]

>>The point that he's making is not that individual observation should trump objective measures, but the epistemic claim that if what we perceive contradicts those measures, it's worth interrogating the validity of those measures.

I don't know if I agree with this. I mean okay, if your house is on fire and your thermometer is showing a comfortable 75 F, you should probably question your thermometer. But in the overwhelming majority of situations, especially involving extremely complex phenomena such as a national economy, one should absolutely not trust their perception or use it to question the validity of empirical evidence that has been collected.

[moorhosj]

Here is an example:

On the first Friday of every month when the Employment Situation report is released, we get new analysis on jobs created, hours worked and hourly wages. This is great information, the only issue is that the hours and wage information is an average, not a median [2].

If economic reality changes to a point where citizens/politicians/economists become concerned with income inequality, this measure begins to lose it's significance. Average wages could increase while median wages fall. It is still "empirical evidence" but it isn't necessarily measuring what we think or want, labor force participation rates before/after women joined the workforce is an example. We should always be questioning the validity of our economic measures over time.

[1] https://www.cnbc.com/2018/09/07/us-nonfarm-payrolls-aug-2018... [2] https://www.bls.gov/news.release/empsit.b.htm

[lavrov]

Why not? Determining how we measure the health of our economy, and implicitly, what we want to optimize for, is a political process, not simply an objective, scientific one.