What Defines 'a Job', Really? With Guest Gene Ludwig

Gene Ludwig, head of the The Ludwig Institute for Shared Economic Prosperity, joins us to discuss 'functional unemployment', and how we can improve the well-being of middle- and lower-income Americans through economic research and education.

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Episode Transcript

(00:11):
Face Palm America. I'm Beowolf Rocklin. Facepalmamerica dot com is where you can
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(00:34):
at us, and if you wantto send a message or even give us
a call, you can do thatat two zero two six five six six
two seven to one. I havesaid on this program before that I am
just enormously frustrated with the economic datathat comes to us through most of the

(00:55):
media, even even you know,what I identify as very progressive media will
take the numbers, especially in termsof job numbers, unemployment numbers, and
just kind of nod their head,accept that as real. And so often
we see around us like signs andindications and experiences of actual human beings that

(01:22):
contradict that. And I, asa result, want to welcome back to
the show Jean Ludwig. We've spokenbefore, but I think it's really important
to emphasize just like how we're accuratethese economic numbers are he's the head of

(01:42):
the Ludwig Institute for Shared Economic ProsperityA Gene Welcome back to Fixball in America.
Thanks so much for being here.It's really great to be with you.
Honored to be with you. Well, this is i've been a very
important topic and I'm glad you're takingit so seriously, and I hope your
listeners will and enjoy what we haveto say. Not happy, but yeah,

(02:04):
yeah, it really is important because, like we keep hearing, and
we've heard in recent months that youknow, unemployment is way down, there's
hundreds of thousands of jobs being created. And the first question I have that
you actually answered pretty extensively in arecent article is what is a job?

(02:25):
When the government says there's a newjob and that it's been created, what
does that actually mean. Well,it includes anybody who has worked at all
in a prior two week period.In other resview, work for fifteen minutes
an hour, you're countada is havinga job, even if you want to

(02:46):
have a full time job. I'mnot talking about people who want to work
part time. I'm talking about peoplewho want to work full time and can't.
So that's countada as a job.We, for purposes of our own
definition of what a real job is, do not include somebody who can't get
a full time job if they wantit. The other thing is that you've

(03:07):
got a job according to the governmentstatistics, the headline statistics, even if
you earn a poverty wage, anda poverty wage in America is below more
or less twenty five thousand dollars ayear. So if you earn not enough

(03:28):
really to put food on your tableso or have a roof over your head,
and you're not able to work enoughto basically get the wage you need,
you're still counted as having a job, which we think is a mistake.
We think it creates a real classof what we call functionally unemployed.
That is, as a practical matter, they're really unemployed. Right, So

(03:52):
you hear about these hundreds of thousandsof jobs that are being created from the
official government numbers, and what thatcan often mean is that yes, there
are quote unquote jobs, but theycan be extremely minimal in terms of the
hours, in terms of the pay, and that in order to cobble together

(04:16):
any kind of actual existence, peopleneed maybe two or three of them in
order to can they think at that. Yeah, no, we count if
somebody has two or three job theycan get to get up to what it
would be a full time employment,that would be that would be functioning from
our perspective employment. I'm not peoplewho can't even cobble together two or three

(04:39):
things to get a full time job. By the way, one woman put
it this way, I thought itwas really a cool way to characterize her
life in terms of not being ableto have a really functionally functional job with
enough rough wages to live on.And she said, you know, there's
the upper class, the lower class, this class. That class says,

(05:02):
I'm not hanging on by my fingernailsclass. That's right. I think that's
right. That's where too many Americansare. They're barely hanging on. Yeah,
and that's just not reflected in thenumbers, because, gosh, recently,
I think the the unemployment rate raysjust just barely from a three point

(05:25):
seven to three point nine percent.That's that sounds like everybody's doing fine.
But what you guys measure at theLudwig Institute for Shared Economic Prosperity is the
true rate of unemployment, and thatjumped recently from twenty three point three percent
to twenty four point nine percent,and that's that's the highest level since July

(05:50):
of twenty twenty one. To startwith, how do you measure the true
rate of unemployment? What are themetrics that you use? Okay, we
take the government statistics what it hasoften referred to his fancy name as you
three, which are just what youwhen they say three point nine percent,

(06:13):
that's what they're the media or youknow, touting the U three which are
they count? They count everybody.But the problem is that the definition which
i've we you and I just discussedthe definition which was formed in the nineteen
thirties out of concepts of the eighteennineties. In those days, you either

(06:36):
had a job in the factory oryou didn't have a job. If you
had a job in the factory,for the most part, you had a
full time job. There were veryfew part time jobs, and there might
be overtime, but you had areal gig economy did not exist at that
point. Gay economy did not exist. But the more we've had this gig

(06:58):
economy where people grab little work inuber they're a little gray a little work
delivering food and dowordish or whatever,and they can't get a full time gig.
That's that's real for people, andit means that counting them as uh
uh, you know, fully employed, which is what the headline statistics do,

(07:20):
seems to me to be not notin line with what the American people
expect, and it gives us afalse sense of how well we're doing.
So I don't necessarily want to urgeyou into the realm of speculation, But
why do you think it is?And I understand that you deal in hard

(07:41):
numbers. Why do you think itis that if these numbers, the that
the Department of Labor provides and thatthe media so thoroughly and uh, you
know, unquestioningly propagates, uh,are so inaccurate it, why do they
keep getting pushed out there? Isit? Is? It? Just?

(08:05):
Is it force of habit? Isit that they haven't investigated it is?
And if the bureau, I meanpresumably the people at the Bureau of Labor,
Department of Labor are not stupid people. They've got to know in a
sense that this does not really reflectwhat's actually going on. Why do they
keep producing this number? Well,it's hard in big bureaucracies to change,

(08:31):
to make change, and in ourmarket based economy, right, everybody likes
to talk their book, whether itis somebody selling a product or running for
election or whatever they do. Right, we want to We tend to have
a tilt towards optimism. And wherethe numbers are historic, uh, and

(08:56):
there's not a lot of ground swellto change them, we sort of fall
in the same old rut. Now, I'm happy to say that our getting
these numbers out, which we've donefor a little over a year, is
beginning to make a difference. Weexpect. We've signed a contract. We
do this for free. We dothis for free with Bloomberg, and Bloomberg

(09:18):
is going to begin to put theseon their site, which is a great
thing. That's great, a greatthing because people will see that regularly and
bail well, if you're fulfilling avery important civic duty. It seems to
me in getting this out, becausethe more we can get people focusing on
reality, the better off we are. We're completely neutral. This is not

(09:41):
left, this isn't right. We'renot trying to. We think policy makers,
regardless of their political persuasion, oughtto be dealing with the facts.
And our goal really is to getthe BLS to change their headline statistics will
at least include hours alongside what they'reputting out today. Let me ask you

(10:05):
a question, is the way thisinformation is conveyed? It seems I'm glad
to hear that it's changing, andI'm glad that as big a disseminator of
economic data as Bloomberg is realizing theneed for something like this. But you
know, as we know, changesis slow in coming. Certainly in the

(10:30):
United States, this continues to bea big problem. What is the state
globally of information? Like do internationalnews sources depend on know better sources of
information from their individual governments or isthis a problem that's common around the globe?

(10:52):
As best we can tell, itis common. We focused heavily on
the United States. But let megive you an example of the headline data
points it's used globally, is,in essence, the GDP. How fast
is the economy growing? Right theyread in the paper, you hear in

(11:16):
the news GDP is up three percent? GDP's up to it makes you feel
good, But the fact is that'san enormous aggregate. And while the name
of it is GDP stands for grossdomestic product, most people would think that
it means what's produced, actually producedmade domestically within your country. But that's

(11:41):
not what it means at all.It's really more of a consumption index.
So it doesn't mean that, youknow, we're increasing production in the United
States and therefore increasing good jobs.If a car company makes all their cars
odd but the money actually comes toone place in the United States and the

(12:05):
cars are sold here. Even thoughthere's no meaningful job increase in the United
States or it's very small, it'sit's included in an increase in GDP,
right. And furthermore, GDP doesn'tyou know tell us this GDP may be
going up, but it's GDP.But I like to say GDP for whom,

(12:28):
who is getting that bump up?And what part of the United States
is getting that bump up. Sothe numbers, the numbers not and this
is a global problem. The numbersnot wholly revealing in terms of what one
thinks it means on the one handor on the other hand, because it's

(12:50):
a huge aggregate, it varies tremendouslywithin a country, area area. And
furthermore, it depends on you know, where you are on the siety,
who's who's winning and who's losing doesn'ttell us that either, right, that
is a global number problem, andcorrect me if I'm wrong. But but

(13:20):
as I understand it, the grossdomestic product doesn't take into account like big
sectors of the functional economy. Ifyou if you if you're if you are
you know, I mean, ifyou're if you're doing you know, housework
or or or things that just don'tfall into certain economic categories that doesn't get
counted, and and and and andso. So it really is a focus,

(13:46):
as you say, of like certainthings that are being uh consumed that
you know that doesn't you know,take teachers and firefighters and and so forth
into account, Am I am?I correct on that. It certainly does
not take into account how household work. Uh So, if I, you
know, take off the week soI can really do house cleaning at home,

(14:09):
that's not increasing the GDP. UhNo, that's an important service.
Or if so that's that's that's notit's it's a it's a very imperfect measure.
But when I'll tell you, whenyou look at this true and the
headline data about jobs in the UnitedStates, the reason it's jumped up in

(14:35):
large part is because of the inflationwe have and wages have not been keeping
pace except in some lower income jobs. But it's large enough in keeping pace
with inflation now to be fair.And by the way, it's it's worse
for minority it's worse for for BlackAmericans, Suspect Americans, and women then

(15:03):
twenty four percent, it's twenty ninepercent well functionally employed Hispanic twenty seven point
seven for Black Americans, and forwomen it's believed or not about thirty percent.
So that's extraordinary those numbers. Thatmeans you can't earn a job,

(15:28):
really and put roof over your head, right, No, not at all.
I'm interested in your personal story becauseit would have been very easy to
go along and get along in theworld of economics and just kind of follow
the numbers the way they are,the GDP, the unemployment rate. What
brought you to this point and whydid you decide to develop this metric?

(15:50):
What did you see that caused youto go in this direction. Well,
I'm kind of, honestly, well, a boy scout American up in a
small town. And when I grewup the town which you think of as
small town America, it was verymuch a community. And what I've seen

(16:11):
is that that's York, Pennsylvania's whereI grew up in Amish Country, right
at the edge of Amish Country.And I've seen the town just physically as
I go look at it decline overthe period of time since I was growing
up. Even more stab in theheart for me is I have either walked
by, ridden my bicycle by,or driven by the Federal Reserve every day

(16:37):
that I'm in Washington for my professionalcareer, which started here in nineteen seventy
three. And there's only one thingthat's clearly changed in that period of time,
and it's changed markedly in the lastten years, and that is the
huge homeless population sleeping in tents aroundthe FED. And you can't look at
that and not say to yourself,something, it's really wrong. This isn't

(17:02):
the America I grew up in.Something is Royan, It is not.
It is not you know, it'slike people like to say, oh,
it's lazy people, or it's peoplewho ought to be you know, mentally
challenged or whatever it is. Yeah, there's some of that, but in
any case, they ought to havea roof over their head too. But
it's also a lot of people whowork and can't afford They don't earn enough

(17:26):
to basically put a roof over thehead accepted ten. That's terrible. We
can't have that. And so whenI look at the numbers that you should
you look at the numbers and say, hey, I'm feeling better at three
point nine percent unemployment, Hey Ishould be cheering. People are really employed.
They have houses and of affordable housesand good food, and that's not
the way it is. And that'scaused me a certain amount of both anger

(17:52):
at the situation and I feel anobligation to do what I can to make
it better. Well, I'm soglad that you doing that. And it
really seems like that, you know, from my perspective, some people are
using this cynically in order to putforward a rosy picture when it would be
more of an effort for them toactually take concrete steps in order to change

(18:21):
the situation, in order to getpeople into houses, in order to you
know, make sure that they hadjobs that paid for their needs. And
in the meantime, the alternative seemsto be that people are sleeping on concrete
steps and perhaps through something of asense of irony, if they choose the

(18:45):
Federal Reserve and outside that particular buildingas a location for that. But I
know realistically that most people in thatsituation will just choose what they can.
Where can we find out more aboutwhat you do the numbers that you produce,
and you tell our listeners how theycan get more information. Well,

(19:10):
we have a website, and Iencourage people to go to the website.
U and I think it's quite accessibleby everybody who likes w w W dot
uh uh liicip dot com. That'sl I l I s e p dot
org E P l I s ep I guess as I'm sorry dot org

(19:36):
because it's liesip dot org because it'sa nonprofit and uh, I think you'll
find an enormous amount of factual data. We uh. Again, we're not
trying to take sides Americans who tendto be uh you know, lean left
or lean right. There are alot of great Americans that is kind of

(19:56):
trying to do the right thing.But we believe for America to do the
right thing and policymakers they've got tolook at the honest numbers, and that's
what our job is. So Iencourage folks, your respect of your political
leaning to look at these numbers andthen hopefully get a national commitment, your
own commitment in your heart to basicallychanges. We don't want to see some

(20:21):
people sleeping intents, We don't wantto see a few people sleeping intents.
Then we got to commit ourselves toseek no people sleeping intents. No child
in America should go to sleep hungry. No child in America should not have
a roof over his or her head, or or good and safe access to
going to school. And I thinkwe've just got to commit ourselves as a

(20:44):
nation, all of us attack togetherto right these wrongs. All right,
Well, thank you for doing whatyou do. And here's to the prospect
that perhaps some administration of either partywill see the light and perhaps nominate you
as a Secretary of Labor, becauseI think that would be a far better

(21:07):
situation than the ones that we havehad recently. I look forward to seeing
that in headlines soon. So thankyou so much. Well, I'm honored
to say that, Baywell, thanksfor doing this important show. And anytime
I can be helpful, just giveme a holler. Absolutely. Gene Ludwig
is the co founder of the LudwigInstitute for Shared Economic prosperity again. You

(21:33):
can find more information at LYCEP dotorg. That's l I s EP dot
org. Thanks so much for beingwith us today on face paulm America.
Thank you bywell, great bye bye. Thanks so much for being with us
today on face Palm America. Iwant to urge you to go to two
squared Media Productions dot com. That'sthe company and its website owned by me

(21:55):
that produces this show and Ace Elsonand Rooseabel High and produce it. Thank
you so much and until next time, enjoy the day.