I read an article that said although UK is seeing low unemployment, same as the US, that it is people working two jobs to get by. Now, seeing as UK has socialized medicine, I assume that’s to cover rent and to save up for retirement? So, according to this article, while unemployment was at 4%, at the time it was written, if you factor in multiple jobs, it was 7%, which is bad.
Is this true? Is this a thing? Is that happening in the US?
I am no economist, don’t understand it well, and am curious about this.
No, the way the unemployment rate is calculated by taking the number of people in the labor force and dividing by the number of people seeking jobs. Multiple jobs have nothing to do with the unemployment rate.
I am not sure about the UK but the number of Americans with two jobs is at historic lows, though with the gig economy it has probably gotten harder to measure.
Having a single full-time job often includes benefits like health insurance, matching 401k contributions and other various benefits on top of one’s salary, not to mention the convenience of having a steady schedule and consistent location to go to earn one’s keep.
Having multiple jobs usually means that those are part-time jobs, which often have no benefits beyond the pay, and variable schedules that may cause one job to conflict with the other. People working multiple part-time jobs often end up working longer hours while earning less money than the fully employed, even before taking into account the aforementioned benefits of full-time employment.
Obviously, these are broad generalizations, and it’s possible for some multiple-job workers to be better off than some full-time employees, but most of the time those with more than one job do so out of necessity in order to make ends meet.
You’re asking one question: “How are people getting by these days compared to before, factoring in healthcare, rent, and savings for retirement?” (discretionary income) and then trying to answer it with a not-entirely-related statistic, “How many people who want jobs are still looking for them?” (% employment, not factoring in wages, benefits, etc.)
To answer your question, it’s not enough to know how many people have jobs (or even how many jobs), you also need to know how much money they’re making, what their benefits are, how much they’re losing to taxes (and then which services are then covered by taxes, such as healthcare), etc.
Really, you want to know “are they making enough money now to get by? does this differ between countries?”
Across countries, you can also (roughly) compare levels of income inequality using the “gini index”:
*My understanding is that disposable income = wages - taxes. Discretionary income = wages - taxes - necessary expenses, but there is disagreement as to what constitutes “necessary” (e.g. healthcare).
I am not an economist. Someone will correct me if I’m wrong.
I’m not an economist, but I feel pretty confident saying no, the unemployment rate on its own doesn’t tell you the whole story about how the economy is doing. All it tells you is what percentage of the workforce has jobs. It doesn’t tell you whether or not people are “struggling”, just did you work and get paid for it or not. If you took a low wage job at Wal-Mart, you are employed. For that matter, if Paris Hilton is trying to land a new reality show and no one will give her one, then Paris Hilton gets counted as unemployed*.
No single statistic tells you the whole story. You have to take all the various economic indicators together and look at the big picture.
*This was an actual example I heard an economist give on NPR once.
I couldn’t find any statistics on people in the UK who have multiple jobs and I suspect that it is a small proportion of the workforce. A major problem with such statistics is that many of those who, for example, have a full-time 5-days-a-week and a second job at weekends, may well be working in the so-called black economy.
I have a nephew who works full-time, but at weekends he does peoples gardens for cash in hand. Many of the opportunities for off-the-books work have been stopped by the government enforcing labour laws designed to prevent exploitation and to maximise tax revenues. As a young man, I worked evenings in a pub for cash - that is pretty rare these days. There are still opportunities though, especially for those with a marketable skill that they can sell to householders, like plumbers, gardeners and electricians for example.
Incidentally, the unemployment rate is determined here by dividing the unemployment level for those aged 16 and over by the total number of economically active people aged 16 and over.
You can also look at it in terms of intergenerational social mobility (what % of kids in a country are better off, economically or educationally, than their parents). It ain’t pretty there either, at least in the USA:
Also, the idea that socialized healthcare hurts the economy is an American conservative myth. Pretty much every other developed country in the world has some form of socialized healthcare, and they are still growing:
Healthcare costs in the USA are astronomical, not because we are offering every citizen better care, but because it is inefficient, a lot of it getting lost in a terrible bureaucracy, the lack of preventative care, etc. A lot of the rest of it goes to owners of for-profit healthcare companies (some of which are everyday stockholders, granted). But countries save a lot of money by just abolishing that system and letting people keep more of their money to begin with, by offering a better and cheaper healthcare system instead of endangering the entire populace to appease one industry.
This really isn’t controversial in the rest of the world. No other develop country wants our healthcare system. Certain individuals needing best-of-breed care will travel to the US for care, but that’s a different question from how to provide healthcare to the remaining 99% of your population, a job which our system fails abysmally at.
Multiple jobholders are measured as part of the BLS Current Population Survey. The rate is typically around 5%. I’m not aware of any similar official measure in the UK. But it has little bearing on how the economy is doing, how people in general are doing, or on the unemployment rate. It’s not a number that moves much when the economy is doing well or poor. People work multiple jobs for multiple reasons; this is a very old report on why people work multiple jobs: https://www.bls.gov/opub/mlr/2000/article/reasons-for-working-multiple-jobs.htm
I’m not aware of anything more recent, sorry.
The unemployment rate is one measure of how people are doing and how the economy is doing. Note there are six official unemployment rates in the US. We usually see U-3 reported, but sometimes U-6, which is always higher.
Both rates are historically low.
If the OP wants know more about different ways of measuring “how well an economy is doing”, that might be worth a new thread. We might even be able to handle it in GQ if everyone behaves.
I liken the unemployment rate to be like your body’s sugar level. It is definitely a vital statistic that means something, and the way it moves and interacts with other economic indicators can tell you quite a bit.
On its own though, with no context, it is not entirely useless (100% unemployment is going to be bad in nearly any economic situation), but it gives far less information as to the state and health of the economy and the workforce than some like to believe it does.
There’s a meme-type photo of two older ladies working in a supermarket.
One says: “Trump created 350,000 new jobs last year.”
The other replies - “I know. I’ve got three of them.”
(This isn’t me doing a political jab. You could substitute any politician/country/year in the last 20 and it would fit.)
My impression is that a lot of jobs are part-time, employers love the flexibility. Employees love looking for enough money to pay bills, so have to take two jobs. I imagine too, defining part-time - less than 24 hrs a week - as not needing to receive health care, also helps employers to decide between full time and part time. Scheduling is certainly a big part. In service industries, it helps to not have to schedule workers 40 hours a week when the busiest times tend to be Friday, Saturday, or Sunday.
As a bunch of posts have correctly stated, there’s no logic by which you can construct a different unemployment rate than the official one by considering people who have more than one job. You might use the incidence of people with more than one job as a measure of financial stress, except it doesn’t really work because the % of people with multiple jobs is both small (almost always smaller than people who invoke multiple jobs as a rhetorical device seem to believe), and hasn’t changed much.
There is an arguable logic by which you can say a given unemployment rate now is not comparable to one in the past. Which is that there are people who are not including in ‘Labor Force’ in the equation Unemployment Rate=1-People Employed/Labor Force who would join the labor force if there were more positions mutually attractive to them as employees and employers to employ them. For example, the labor force participation rate in the US has dropped relative to that in the UK. The US rate used to be substantially higher, now it’s about the same. This article concludes that only around 1/2 of the relative change is accounted for by the % of the US population that’s of priming working age also having dropped from substantially higher than in the UK in the 1990’s to slightly lower now.
Thus especially in the US, between those two countries, you could argue that the very low unemployment rate* by US historical standards is not necessarily as low as it looks from the idealized perspective of ‘everybody’ getting a job. Although the labor market might still be tight in terms of the skills employers need, at the wages where they can make a market return on capital, v the skills actually held by the people who are not in the labor force and/or their incentive to join it at market wages.
*Even the broadest measure of unemployment in the US, U-6, which includes ‘discouraged’ workers, involuntary part time etc is now low relative to its history, back to 1994.
It’s more than that, really. Having part timers, especially part timers that want full time, means that you get to get them to fight each other for shifts. this actually works out well for the employer, if someone calls off, you have a bunch of people that you can call that want hours, if someone pisses you off, you can cut their hours and give them to someone else.
As a current employer and a former hiring manager, I absolutely get why we want part time employees. The problem is that it is bad for the worker and the workforce, and the economy overall.
To be fair, this is a result of perfectly valid selection bias. People who work low wage jobs work with other people who work low wage jobs, and those people are far more likely to have multiple jobs than people with higher paying jobs.
You may not know a single person who has to work 2 or more jobs to make ends meet, those of us at this end of the payscale either are one of those (I was for many years of my working life), or we work with and know people who do.
The base percentage of people with two jobs is a meaningless statistic. Break it down a bit, and see will that the percentage of people who make over say 50k a year that work two jobs is a fraction of a percent, and those who make under say 40k a year is much, much higher than the average of all workers.
It’s also fun for the government and their statistics because a part-timer who is laid off from one of two jobs is still technically not unemployed, even if they are now in deep financial doo-doo. Plus, finding two jobs that don’t conflict - or one job will make allowances for the other - is an art.
My wife has managed multiple such businesses. Scheduling adequately is a stressful exercise. Plus, there is a fine line between being too accommodating and driving away employees who need more flexible scheduling. Some employees do multiple jobs because they cannot find one full time job. SOme are like Wayne’s World Wayne “I don’t exactly have a career, but I do have large collection of nametags and hairnets.”
Whereas the rhetorical device of invoking it usually implies it’s a significant % overall, and virtually always implies it’s increasing ‘nowadays’, in reaction to whoever is in office they don’t like.
Multiple jobs are virtually never invoked just to note the obvious as you have, which stated another way is: people with higher incomes work more hours* but are less likely to do it via having more than one job.
Altogether, 'people now have to work multiple jobs in the US to get by in [politician]‘s economy’ is an empty trope in terms of macro statistics, the way it’s almost always used in political debates, and has been used on both sides in relatively recent times.