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When reading statements of Donald Trump, e.g. this Tweet, there is a better employment rate than ever in the USA right now. But many news sources in Europe report, that there is mass unemployment. What is the actual state? Are there numbers that can be interpreted in the one or the other way?

reirab
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hilario
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    Unemployment is at 13% which was the average of 2008. So high, but good for a record breaking global pandemic. – Paul Draper Jul 05 '20 at 23:04
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    The linked tweet does not make the claim that this question asks about. It's a claim regarding the number of jobs added (back) to the economy in May (which is probably true, as a lot of stuff reopened in May.) A lot of businesses shut down (either voluntarily or by requirement) in March and April. A very large percentage of those reopened in May. – reirab Jul 06 '20 at 04:36
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    @PaulDraper good for a record breaking global pandemic - Only true if you assume a pandemic must lead to massive unemployment. Many countries simply furloughed workers: they did not become unemployed. – Oscar Bravo Jul 06 '20 at 08:33
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    @OscarBravo, that's not a distinction relevant to these numbers. According to the Bureau of Labor Statistics (the source of U.S. unemployment figures), furloughed employees are counted as unemployed, specifically "unemployed on temporary layoff". In fact, the vast majority of "unemployed" persons in the U.S. over the last few months were furloughed not terminated. – Paul Draper Jul 06 '20 at 09:52
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    @PaulDraper So the US furloughed the workers but left them in that big red spike of unemployed in the graph? I think we might have different interpretations of furloughed... In the UK, furloughed workers were paid 80% of their salary by the Govt. and did not become registered unemployed. – Oscar Bravo Jul 06 '20 at 12:05
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    @OscarBravo Very different, in the US "furloughed" is usually "mandatory, temporary, unpaid leave". For federal furlough (e.g. during federal shutdown) usually workers are paid after for that time, but for a private furlough you're just...not paid. – user3067860 Jul 06 '20 at 12:32
  • @user3067860 Except for collecting unemployment. Which, while not typical, was actually more than 100% of normal pay in some cases due to the weird way the temporarily-increased unemployment benefits for COVID were designed. – reirab Jul 06 '20 at 16:24
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    Very confused as to how this is still open. Linked tweet doesn't support the question as asked. I realize this isn't Skeptics, but still, standards?? – Joe Jul 06 '20 at 17:50
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    @OscarBravo "In the UK, furloughed workers were paid 80% of their salary by the Govt." Not working and on government dole sounds like "unemployed" to me. Why does it matter whether the dole is called "furlough pay" or "unemployment insurance"? – Acccumulation Jul 06 '20 at 18:01
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    @OscarBravo that's similar to the U.S. The employer mandates unpaid leave, and the employee files for unemployment insurance (can depend on the state). IMO it's odd that the UK wouldn't count people without work (but with govt benefits) as unemployed, but as long as it's consistent I suppose. – Paul Draper Jul 06 '20 at 19:09
  • I reverted the change from Glorfindel because the added reference was from early March. The U.S. actually did have its best unemployment numbers in quite a long time at that point, as that was before any significant number of layoffs or furloughs happened due to the pandemic. The question is asking about now, not pre-pandemic, but the claim in the question has not actually been made since the pandemic started significantly affecting employment. – reirab Jul 07 '20 at 07:03
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    @Accumulation Furloughed UK employees are actually still being paid by their employers. The employers are receiving money in grants from the government to fund that. If you count that as unemployed, then pretty much any employee of a government funded body is 'unemployed' – Ty Hayes Jul 07 '20 at 10:52
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    @PaulDraper As mentioned by Ty Hayes - UK furloughed workers are not unemployed. They cannot claim unemployment benefit, still get a payslip and still pay tax! They also go back to work when the scheme ends. You might argue that this is an artificial situation and that there might not be any jobs left then, but for the moment, the UK unemployment rate is not enormously higher than it was pre-Covid. – Oscar Bravo Jul 07 '20 at 11:47
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    @Acccumulation: other than the payroll procedure, the meaningful difference is that furloughed employees are still under contract to their employer, and we do not (mostly) have "at will employment" in the UK. So there is a meaningful contractual difference between being furloughed and not having a job at all: once the agreed period of furlough ends you still have a job (perhaps one at risk of redundancy, but a job). – Steve Jessop Jul 07 '20 at 11:57
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    Granted, it is temporarily a zero hours contract with a generous retainer, and you can quite reasonably argue that (a) monthly unemployment figures should include anyone working less than a threshold of hours regardless of contract; (b) in some cases furlough is just delaying the inevitable redundancy and hence is manipulating the stats. But there's definitely a difference between "furloughed" and "sacked, but with a possibility of being rehired in future". You're accumulating length of service, leave entitlement, etc. You are, in all senses other than actually doing any work, an employee. – Steve Jessop Jul 07 '20 at 11:57
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    @TyHayes Oscar Bravo said they're being paid by the government. And the argument "If you call one person getting money from the government unemployed, then you have to call everyone getting money from the government unemployed" is bizarre. – Acccumulation Jul 07 '20 at 17:54
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    @SteveJessop It may make a difference to the individual employee, but it's not much difference as far as evaluating the health of an economy. – Acccumulation Jul 07 '20 at 17:55
  • @Acccumulation Oscar's initial comment was poorly phrased, especially if you are unfamiliar with the system, but is the difference clear to you now? They are not getting money from the government, their employers are. – Relaxed Jul 08 '20 at 15:08
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    @Acccumulation: it is, because there's a significant difference to the economy between someone who has a job lined up for August, and someone who doesn't. For a more extreme case of the same thinking, we don't demand that the reported unemployment rate must spike at the weekend (and even if the government for some reason subsidised employers to give people the weekends off, we still wouldn't). – Steve Jessop Jul 08 '20 at 15:13
  • @Relaxed There isn't much difference between the government giving money directly to workers versus them giving the money to someone to give to workers. – Acccumulation Jul 10 '20 at 00:46
  • @SteveJessop I don't see much difference. Society is organized around people getting weekends off. Society has "decided" that there are benefits to taking weekends off, and thus doing so is better than working every day. Those benefits don't apply to taking several months off. – Acccumulation Jul 10 '20 at 00:54
  • People use weekends to socialize, do errands, catch up on housework, etc. The first is significantly curtailed, the second is limited if they involve nonessential businesses, and the last has diminishing returns once you have every day off. Not only does taking two days a week off naturally disrupt supply lines less than taking several months, supply lines have been built around people taking weekends off. – Acccumulation Jul 10 '20 at 00:54
  • @Acccumulation There is a difference, that's the whole point of these measures. A business is a complex thing, preserving the links between its different parts preserves the economy's productive capacity. You mentioned supply lines, you're very right about that and that's exactly the point. Taking week-ends off or leave days (in Europe 3-4 weeks at once is normal) do not disrupt them as much as breaking the employment relationship. The type of furloughs we are talking about are precisely a way to organise society to have people take some additional weeks off when necessary. – Relaxed Jul 12 '20 at 15:37

3 Answers3

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Trump has indeed claimed something along the lines of "there is a better employment rate than ever in the USA right now". Now before the Covid-19 crisis, unemployment rate was at a low level. According to official sources, the U.S. Bureau of Labor Statistics, it was about 3.5% since September 2019, which was the lowest level in the 21st century. Looking at this website the last period with such a low unemployment rate was around 1970.

Only when the pandemic hit America, in March 2020, did the unemployment increase. And it's safe to say that there is a (for United States unprecedentedly) high unemployment rate right now:

enter image description here

Now, specifically about the Tweet you mention in the comments:

Greatest Top Five Monthly Jobs Gains in HISTORY. We are #1!
enter image description here

The Bureau of Labor Statistics is mentioned as source, so the graph is as credible as the one about unemployment rates. I would say that this is a clever way to frame the decrease in unemployment rate from 13.3% in May 2020 to 11.1% in June 2020. That is a lot less unemployment / more jobs than the month before, but the president doesn't claim the employment rate is better than ever. He's just showing some figures that cause him to make a good impression, as many politicians (and CEOs, and who not?) are wont to do.

Glorfindel
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    The introduction "When did he make the statements you're referring to? Because before the Covid-19 crisis, unemployment rate was at a low level." seems disingenuous, since the OP gives a URL to the Trump tweet in question, which provides the timestamp: "4:31 PM · Jun 5, 2020." Therefore citing pre-COVID times isn't relevant. – agc Jul 05 '20 at 17:57
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    @agc well, the initial version didn't have any statements at all. I've edited it in after the OP provided it in a comment here. But it could use some rework, true. – Glorfindel Jul 05 '20 at 18:07
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    @agc The tweet does provide a timestamp, but it doesn't make the claim that the question asks about. – reirab Jul 06 '20 at 04:43
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    It's sufficient to just say that the claim is actually something different than what the OP understood, without being snarky about it. – user3067860 Jul 06 '20 at 12:34
  • That unemployment rate is not unprecedented in US history, it was higher during the Great Depression. But as far as I know unprecedented since then. – nasch Jul 07 '20 at 22:48
  • And this also ignores all the people that don't qualify for unemployment normally. https://www.youtube.com/watch?v=fVaLmnUZOjQ This simply means that the actual unemployment rate is higher than reported even during normal times. – computercarguy Jul 08 '20 at 16:43
  • I think you have a typo in the last sentence – Pedro A Jul 08 '20 at 22:33
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There is mass unemployment. The unemployment rate is 11.1%, which is certainly quite high by US standards, as you can see from Glorfindel's source. 11.1% is higher than the peak unemployment rate during the Great Recession.

Trump's tweet contains this image:

enter image description here

The data in this image can indeed be true, but it doesn't mean there's low unemployment. That's because the US is coming off massive job losses leading to historically high unemployment. This is easiest to see with some numbers.

Scenario 1: Let's say the country only has 1000 workers, and has an unemployment rate of 5%. That means 50 workers are unemployed, the remaining 950 are employed. If the unemployment rate drops to 2% now, there are 20 unemployed workers, so this is equivalent to a jobs gain of 30.

Scenario 2: Let's say the country has 1000 workers, but has an unemployment rate of 10%. This means 100 workers are unemployed. If the unemployment rate drops to 5% now, there are 50 unemployed workers, so there is a jobs gain of 50.

Therefore if you plot only the jobs gains, you might be fooled into thinking the second scenario is better than the first one, but digging deeper you should see that it isn't - unemployment is higher in scenario 2 than scenario 1.

We are seeing something similar. US unemployment shot up to about 15% recently, so a drop back to 11.1% manifests itself as a large number of jobs gain. But the current 11.1% unemployment rate is still poor. Therefore you must be careful what question you're asking. If it is "is there mass unemployment in the US", the answer is yes. If it were instead "did the US job market improve in June 2020 by more than any other month in history in absolute numbers", the answer is again yes. If it were instead "did the US job market improve in June 2020 by more than any other month in history in percentage terms", it could well be no (I have not checked). The differences are subtle, but they're there.

Allure
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Mass Unemployment

According to Wolf Street, the BLS numbers are highly misleading.

enter image description here

Essentially, there is a massive discrepancy between the unemployment numbers published by BLS vs. the unemployment claims reported by the DOL (Department of Labor). Either there is rampant employment fraud, and tens of millions of Americans are claiming unemployment benefits while holding down a job, or the BLS methodology is heavily flawed. Given that DOL data comes from actual claims, while BLS data comes from sampling phone surveys, you can draw your own conclusions about the reliability of the reports...

Lawnmower Man
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    BLS is a division of DOL, so all the data you are referencing is DOL data. – user4556274 Jul 07 '20 at 09:31
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    @user4556274 Thanks, I was too lazy to look that up. Good ol' bureaucratic departmental walls... – Lawnmower Man Jul 07 '20 at 17:37
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    Is Wolf Street considered a credible source? The website looks a little ... uh ... not? – Azor Ahai -him- Jul 07 '20 at 21:04
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    @AzorAhai--hehim I looked for critical reviews of it and didn't find any with a modest effort. More importantly, I believe that all the numbers presented can be found in the DOL report linked under "week ended June 27". In particular, the 12.8 million PUA continuing claims appears at the bottom of page 7 of the report. If you find any discrepancies or unsourced data, I would be happy to reconsider. – Lawnmower Man Jul 07 '20 at 23:13
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    This ridiculous answer makes some kind of implication that DOL is reliable and BLS is not, while as noted BLS is a division of DOL, and further BLS is the official source of labor statistics for the US government and the public. – qwr Jul 08 '20 at 18:09
  • @qwr Do you dispute the notion that unemployment claims statistics are more reliable than employment surveys? And if BLS is not an official source of labor statistics, then why does the WH cite it every chance it gets? – Lawnmower Man Jul 08 '20 at 19:06
  • I wonder if the discrepancy comes from people on furlough who are collecting unemployment but might still report that the are employed. – eps Jul 08 '20 at 19:58