Recent essay Published by Eugene Ludwig Politico Despite most economic data that shows a healthy US economy in 2024, the situation is actually bad. He tries to persuade us by providing alternative data. But careful investigations of his alternative data are not convinced. Such alternatives are not a better measure of the labor market, and personal income is disappearing in the United States. And even many alternatives are still well -economically good.
labor market
Ludwig presents a scale of “true” unemployment developed by his organization, suggesting that about one quarter of potential labor force is unemployed, unemployed or poor. This figure may seem amazing, but it is a measure of poverty rather than traditional unemployment indicators. This bill can be compared with standard poverty measures by setting a $ 25,000 threshold per worker per household. It is useful to measure poverty, but it is not necessary to integrate the scale of poverty and the employment scale. That will add confusion.
But despite the author’s own action, data does not support the economic decline. The 23.3 %reading in January 2025 was the second lowest reading in the record, and in January 2024, it was slightly lower to 23.0 %. In addition, this figure was the first year of the data series with a 10 percentage point lower than in January 1995. Whatever it is, this suggests long-term improvement of economic conditions rather than the economic pain suggested by the author even if it is much larger than the current 4 % official U-3 ratio.
Income and income
Ludwig’s second economic data criticism focuses on BLS’s mid -day income report, which claims that it offers incomplete paintings except for part -time workers. But this complaint ignores the fact that BLS produces a measurement value. Especially for part -time workersIt is also included in the monthly report. Full time measurements are worth it because they have most of them.80 % or moreConsultants of regular workers.
In addition, tracking separate measures for full time and part -time workers is beneficial because it allows a clear understanding of the labor market trend. Many part -time workers are individuals who voluntarily choose part -time jobs for students, caregivers or lifestyles. Their income is important, but if you get together with full -time workers, the overall picture of the wage trend will distort.
More importantly, the average income of inflation adjustment by part -time workers reached the best record, except for the rude area of infectious disease. The part -time wage is maintained lower than the full time wage, but this trend does not argue that imported data systematically underestimates economic pain.
Inflation and consumer price index
Essay also challenges the accuracy of inflation data, but at least this criticism Shadow Start. However, the claim that alternative measures actually provide different inflation pictures are exaggerated. BLS Its itself already creates an experimental CPI. Income was classified by the fifth quartile.
The difference between the author’s preferred measurement and official CPI levels is relatively humble. Since the end of 2005, when the BLS began to provide a specific research series, the price was 64.4 %for the lowest income fifth quartile, 6.7 %for the middle fifth quartile, and 56.8 %for the up to 5 quartiles. The lowest income furniture was slightly higher in inflation, but as the author knows, the change is not bold.
In addition, when adjusting actual wage growth using such inflation levels, data The most powerful for low -income workers since 2019. This contradicts the claim that inflation has made the low -income sector of the workforce. Instead, evidence suggests that the increase in wages at the bottom of income distribution leads to price hikes, resulting in the actual benefits of low -income workers.
GDP and income distribution
The authors’ final criticism focused on GDP, claiming that single measures could not effectively capture income distribution. This point is reasonable, but GDP cannot explain inequality and cannot be explained, and it means that economic benefits are not shared.
He mentioned the survey of the Federal Reserve Bank, which suggests that Americans without university degrees since 2013, but the data from the Federal Reserve’s Consumer Finance Survey (SCF) draws different pictures. SCF shows that there is a profit of the inflation adjustment. Those who have a degree still have much more assets, but are the largest for individuals without college degrees. This suggests that despite the imbalance, economic interests are not limited to the richest social sector.
You can also see data on your own website of Ludwig Institute. Weekly income from the overall income distribution. According to their data, wages have grown in realistic and are essentially recorded over income distribution. Their series began in 1982, and since the actual income growth was at the bottom of the distribution, the 25th percentiles increased by 71 %, an increase of 49 % of the rich workers (90th percentile).
conclusion
The author of the political essay says we want prosperity. share. He even put the phrase as the title of his lab. But using your own data and other data sources, we can see that we are already sharing prosperity in the United States. Income is increasing across the distribution, poverty is part of the lowest level we saw and the unemployment rate is almost record low. The United States faces many economic challenges, but many solutions to these problems include continuing the way of economic growth without changing the course.
Jeremy Horpedahl is an associate professor at the University of Central Arkanson. He is on the blog Economists are writing every day.
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