Towards a Better Metric of Work
In 2018, the United States’ unemployment rate dropped below 4 percent for the first time since the end of the dot-com bubble in early 2000.
This is certainly a historic occurrence: unemployment rates hovered around 3% during the postwar era of golden age capitalism, but the economic contraction that began in the 1970’s was accompanied by a coincident decline in employment, and the unemployment rate reached a ceiling of 10.2% in November of 1982.1 So, if today the metrics that quantify economic health seem to indicate that the coast is clear, why does it still feel like we’re living in a recession economy?
- The nature of employment has changed. In 1948, when the U.S. Bureau of Labor Statistics began reporting the unemployment rate, the face of our economy was drastically different: approximately 20% of the workforce was employed in the primary sector (agriculture), 50% in the secondary sector (manufacturing), and 30% in the tertiary (service) and quaternary (information and administration) sectors.2 Today, the primary sector constitutes just 1.5% of the economy, the secondary sector 12.6%, and the tertiary and quaternary sectors combined account for 80.1% of the economy, with the remaining portion representing the self-employed workers who constitute the “informal economy.”3
- The unemployment rate is simply an antiquated metric that was adequate for describing an economy that no longer exists. In 2017, the TruTV edutainment series Adam Ruins Everything explored the various ways in which the unemployment rate misrepresents the health of our economy, citing that the unemployment rate excludes anyone not actively seeking work, as well as person “who earned more than twenty dollars in the last week.”4 Given that many of the jobs “recovered” since the 2008 recession are part-time, and that some have given up looking for work altogether, it is clear that the prime metric we use to measure unemployment is inadequate.5
- A large portion of the workforce is either working multiple jobs or underemployed - meaning that they are either employed below their education level, or are working less hours than they would like to be. In 2017, the Department of Labor reported that the number of people holding multiple jobs was 4.9%, although the sampling methods used to obtain that statistic are dubious, and the figure is likely higher.6 Meanwhile, NPR estimates that 33 percent of college graduates are underemployed, “with trouble finding jobs in their chosen field,” even as employers clamor for more skilled workers.7
- Finally, there remains the severely under-examined question of just how much work being performed is entirely unnecessary. In his 2018 book Bullshit Jobs: A Theory, the anthropologist David Graeber explores a growing trend in developed economies, of workers who genuinely believe that their work is pointless. Graeber attributes the rise of “bullshit jobs” to administrative inefficiencies primarily within the quaternary sector, where jobs abound that could easily be automated or legislated out of existence.8 A survey conducted in the U.K. found that 37 percent of workers believed their jobs made no meaningful contribution to the world, and a similar study in Holland found that 40 percent of Dutch workers felt the same way.9
The reality is that, while some of us are working longer hours than ever before10 in jobs that are, in many cases, completely pointless, many Americans who want employment are not finding it. As of June 2018, the rate of participation in the labor force (defined as all people 16 or older either working or looking for work) was as low as 62.7 percent.11 Moreover, the underemployment rate is at 8 percent, though that number was almost double as recently as 2008.12 Furthermore, none of the existing employment metrics account for wages, and thusly, they entirely fail to account for quality of life among those who are lucky enough to find work.
It is vital that labor economists begin to develop a new toolset to address these massive shortcomings in the way that we quantify work. An improved set of employment metrics should seek to capture the following elements:
- The average amount of hours worked to earn a living wage in a given region;
- The amount of workers who are employed for too few hours to earn a living wage;
- The amount of workers who are employed sufficiently to earn a living wage;
- The amount of hours worked above the minimum needed to earn a living wage.
The unemployment rate is a political metric, and at present, it is being used as a bandage to cover a festering wound: that the distribution of labor in this country is grossly unequal, and that something must be done, before discontent in the realm of economics spills over into the realm of politics.
Jack Collis is a first-year Master of Public Affairs student at the LBJ School of Public Affairs, focusing on environmental and economic policy, especially as they relate to international food systems. Jack is working on a dissertation which explores the interlinked trilemma of rising food prices, stagnating economic growth, and soaring inequality, and hopes to finish his studies at the London School of Economics. During his undergraduate career at UT, Jack served as an officer at Austin's storied 21st Street Co-op, and interned as a junior caseworker in the offices of Senator Kirsten Gillibrand and Member of British Parliament Tom Brake. After graduating, he worked as a legislative proofreader for the Texas Senate and then as a campaign organizer for a local non-profit and a judicial race, during which time he helped to found a labor union for political canvassers.
The views, information, or opinions expressed by blog contributors are solely those of the individual authors and do not necessarily represent those of the Center for Health and Social Policy, the LBJ School of Public Affairs, or The University of Texas at Austin or affiliated employees.
1. “Seasonally Adjusted Unemployment Rate.” Bureau of Labor Statistics. Retrieved from bls.gov, February 9, 2019. https://data.bls.gov/timeseries/lns14000000
2. Graeber, David. Bullshit Jobs: A Theory. London: Simon & Schuster, May 2018. Retrieved from The Anarchist Library at theanarchistlibrary.org, uploaded 2018. pp. 109.
3. “Employment by major industry sector.” Bureau of Labor Statistics. October 24, 2017. Retrieved from bls.gov, February 22, 2019. https://www.bls.gov/emp/tables/employment-by-major-industry-sector.htm
4. “Adam Ruins the Economy.” Adam Ruins Everything. TruTV. October 3, 2017. Web.
5. Clifton, Jim. “The Big Lie: 5.6% Unemployment.” Gallup. February 3, 2015. Retrieved from news.gallup.com, February 22, 2019. https://news.gallup.com/opinion/chairman/181469/big-lie-unemployment.aspx
6. Sherman, Erik. “More People Probably Work Multiple Jobs Than The Government Realizes.” Forbes. July 22, 2018. Retrieved from forbes.com, February 27, 2019. https://www.forbes.com/sites/eriksherman/2018/07/22/more-people-probably...
7. Garcia-Navarro, Lulu. “How Underemployment Is Affecting the Job Market.” National Public Radio. Retrieved from npr.org, February 27, 2019. https://www.npr.org/2018/07/15/629212924/the-call-in-underemployment
8. Graeber, 2018. pp. 6-10.
9. ibid, pp. 11.
10. Robin, Vicki, and Joe Dominguez. “Why humans work longer hours than ever before.” The Big Think. April 8, 2018. Retrieved from bigthink.com, March 1, 2019. https://bigthink.com/big-think-books/vicki-robin-joe-dominguez-your-mone...
11. Guilford, Gwynn. “Americans need to stop obsessing over the unemployment rate.” Quartz. June 7, 2018. Retrieved from qz.com, March 1, 2019. https://qz.com/1297561/the-dazzling-us-unemployment-rate-is-blinding-ame...
12. Edwards, Jim. “Misleading unemployment numbers may be prompting the Fed and the Bank of England to make a huge error.” Business Insider. September 22 2018. Retrieved from businessinsider.com, February 27, 2019. https://www.businessinsider.com/statistical-evidence-unemployment-undere...