Employment rate is propaganda

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Sean in Ottawa
Employment rate is propaganda

We keep hearing the employment rate presented as soemthing politicians have presided over to benefit the people. 

But the truth is more complex than rising employment good falling employment bad. This is becuase employment rate as a statistic is meaningful -- all things being equal but they are not.

I will give two examples of this.

First let's take Trump and the rising African American employment rate. This sounds good and sounds suspicious to thinking people but many people cannot work it out. It is simple really. If you attack food stamps, medicaid, social welfare and tell the people to work or die then they work. Business is happy to comply -- it is after all related to supply and demand theory. So with these supports gone, a starving person will work for less and less and then under the table without protection below minimum wage. They will take self employment (piecework exempt from minimum wage laws). Business can have more semi-unemployed part-time workers with fewer benefits. States can lower minimum wages either through ignoring inflation or direct reductions. More African Amercians are working though. It is possible they are collectively making less than they were 20 years ago but without social supports they are working.

Then let's consider the Canadian example.

Canada used to have high unemployment. We do not any more. Simple solution was to reduce dramatically Unemployment Insurance  and call it employment insuarance. Interesting ideas there. You insure against a bad thing (eg flood insuance, accident insurance etc.). But the name of the game is not to provide insurance for you but instead to make sure the unemployemnt stats, so bad for the politicians, are not too high. So reduce benefit periods and amounts and reduce the ability to qualify and you fix the problem You can call it Employment Insurance. Never again has so many Canadians been unemployed. Theya re desperate enough to work under minimum wage through "self employment" scams where everyone knows that they have no control but have enough so the "employer" does not have to pay them -- or they work for minimum wage. 

Hopefully this can explain Trump's success with the African American employment rate. Impose desperation and more people with not identify as employed.

Next state Recession. You might be able to avoid this if the business can grow by sucking every penny out of the people. this was done by providing credit. this way the economy could contract if you actually had a balance sheet -- everything owned less everything owed -- but we do not do that. These are separate. What does credit do? Well it also attacks wages: more of what you pay goes to the wealthy class, plus interest thereby reducing the actual value of your wages. The difference is that this transfer is called sales and actually lifts economic activity. So a recession is avoided using a mechanism to reduce (not increase) the amount of money ordinary people have.

Just a couple points about the economics Trump and other "trump up."