Bradbury's contention -- that there was more slack in the US labour market than at comparable moments in past cycles, and that the unemployment numbers might be understated by from 1% to 3% -- was taken up by a number of economists and commentators.
Brad DeLong here ,
Paul Krugman here ,
and (useful post with a number of references), New Economist here .
A short refutation of Bradbury's brief was written by Diana Furchtgott-Roth of the Hudson Institute. It can be found (pdf file) here .
Ms Furchtgott-Roth is a well-known free-market pundit whose take-no-prisoners style reminds me somewhat of Margaret Thatcher's. Her refutation seems heavy in breezy assertions and light on relevant substance, whereas Bradbury's paper relies on considerable statistical analysis.
In particular, Furchtgott-Roth states that the teens and women Bradbury deduces are "missing" from the unemployment statistics are in school (teens), at home minding the kids (women), and that this is voluntary, and proves how well the economy is working because "we are prosperous enough to devote more time to education and to our families." (sic). Further, "A decision by couples to live on one paycheck and to let one parent stay home with the children is not a labor market problem." (re-sic).
General Glut picks up the issue and says:
I suggest focusing in on a group of workers who over time are almost always in need of work, who do not wax and wane with educational or retirement opportunities, nor with social trends toward greater workforce participation rates: men age 25-64. ...snip... As you can clearly see, at the peak of the last two economic cycles the ratio topped out in the 85.5-86.0 range. Currently the level is just 83.2, right where it was three years ago and nowhere close to the levels of the late 1990s.
As you can clearly see, at the peak of the last two economic cycles the ratio topped out in the 85.5-86.0 range. Currently the level is just 83.2, right where it was three years ago and nowhere close to the levels of the late 1990s.
So: I'm more impressed by Bradbury and supporters than by Furchtgott-Roth. It does seem likely the US official unemployment numbers overstate the dynamism of the US labour market.
End of aside.
People, if you're off to bed, sweet dreams. If you just got out of bed, having read all the above, you'll be going right back.
