As we are getting further in to Piketty's book on inequality, this article(link) grabbed my attention. I've read many like it that talk about how so many people who work minimum-wage jobs aren't earning enough to live on, let alone support a family. I think the sheer number of articles like this one indicates just how serious of an issue wage gaps and inequality are. This article talks about adults with families who work multiple part-time jobs to try to earn a living. Most of the time these people work full time hours and still only get paid for part-time because of the kind of job they hold (i.e. retail, fast food). One man is quoted as saying that he "hates depending on the government." Temporary government assistance is being used for long periods of time, but it's not necessarily due to people getting lazy, there is a severe lack of opportunity for many people to gain a higher position with a higher pay that will actually allow them to be self-reliant.
When reading articles like this and reading Piketty's book, do you think that the Fed is assessing the rate of unemployment correctly? Can we really count people who work part-time jobs, but need and want full-time jobs to be employed?
I think Shelby raised a very interesting question. There are huge gaps among people in employment portion. If the people mentioned in the article are also counted as employed, I think there should be changes in the definition for employment: as employed and able to live with the wage. Because the conditions that they are experiencing are so much different from those who are employed with livable wage.
ReplyDeleteI'm not sure if the Fed is necessarily assessing the rate of unemployment wrong or right, but I think it would be good to have some sort of measurement that takes into account those employees that only have part-time jobs, but are looking for full-time jobs. Also, I think minimum wage is a big issue in the U.S. right now, but I'm not entire sure what should be done. Keeping minimum wage low and raising it both have their repercussions, it's just a matter of which are worse, in my opinion.
ReplyDeleteWhile statistics like unemployment rates are easy to compare from quarter to quarter or year to year, after reading this article it's clear that they don't always show the whole picture. The changes in age demographics of minimum wage workers requires a reconsideration of how employment is looked at. It might be useful for the Bureau of Labor Statistics to provide an estimate each quarter of the percent of workers who feel that they are underemployed in addition to unemployment statistics.
ReplyDeleteI think that it is hard for the Fed to control employment based on monetary policy. The only thing that they can do is really manipulate the interest rate to spur or stop growth. While those play a part in employment, they are not the sole factor, nor the only important one. I think it is tough to use one figure to determine how well the country does in terms of jobs. There should be a number of figures that determine how employment is going for all types of jobs and classes of society.
ReplyDeleteI think Kate brought up an important mistake that the Fed makes when using the unemployment rate to base their policy decisions off of. The US may be at a normal unemployment rate (5.4% -WSJ) however, the underemployment rate in this country is far worse. The Gallup Agency conducted an underemployment study from March 2014 to March 2015. Their data showed the underemployment rate reached as high as 16.9% during the year and the most up to date numbers showed a rate of 15.5%. Maybe the Fed should put more emphasis on referencing/assessing these kind of statistics when deciding when we are at full employment?
ReplyDeleteI agree with Nolan that there should be multiple statistics that the country uses to asses employment and underemployment to paint a clearer picture on the state of the economy. Just as Kate mentioned, it's misleading to focus in on one statistic and will not accurately represent groups in the economy.
ReplyDeleteI agree with everyone that there should be multiple statistics used to measure more than just typical unemployment but I also think that the issues described in the article are not a problem because of lack of reporting. As Shelby stated, there are an incredible number of articles written on the topic and furthermore, policy makers don't need a concrete statistic such as unemployment to tell them that a large number of people in the United States are underemployed and not able to live off of the current minimum wage. There have been protests all across the country with workers demanding higher wages. In my opinion, this article brings into question the need for a higher minimum wage moreso than it does the need for better reporting.
ReplyDeleteI agree with everyone above that although their are several statistics to how the Fed meausures unemployment, but agree with Bronte that I believe that policy makers have a wealth of infomation on the topic of inequality due to wage gap in the US and yet still do not know what is the correct way to go. As others have stated many people in our country are underemployed and are unable to live off of the minimum wage that our country currently has in place. I feel as though policymakers have the information and should make a decision on what they want to do to address this problem because I feel as though they hide behind their titles instead of helping the people in our nation.
ReplyDeleteI agree with the above commentaries. I also think there should be multiple ways to measure unemployment or underemployment. However, I agree with both Bronte and Carter, that the underlying issue is of raising the minimum wage rate is being ignored. However, I think as the saying goes, we are preaching to the choir. To many Americans, it is clear for the need to increase the minimum wage rate. Unfortunately, I think the people who have the authority or power to do some seem to disagree. I think this brings about another issue at hand. The issue being, how do we as a society get the "elites Americans" to notice as well as support issues that the majority Americans deal with (I.e., need to increase minimum wage rate, inequalitie,etc)?
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