Rogé Karma

So- I've heard of that one.

Yes, yes, you might've heard of it.

I think when most people think of the unemployment rate, they think of, oh, this is just the percentage of people who don't have a job.

That isn't quite true.

So the Bureau of Labor Statistics, the way they calculate the unemployment rate

is they actually try to take out people who have not looked for a job in the last four weeks.

So if you haven't looked for a job in the past month, you are removed from the dataset.

Why do they do that?

Well, there are a lot of people who don't want a job, students, retirees, stay-at-home parents.

Those are the kinds of people that you don't want to include in this dataset because it wouldn't give you as accurate a snapshot of the labor force.

The problem is that that move, that methodological move, also excludes people who would otherwise want a job

but have given up looking for one.

So this was a big thing that happened after the Great Recession.

They were actually, after the Great Recession, the unemployment rate recovered pretty quickly, but then economists went and they noticed, wait a minute, the reason it recovered so quickly is actually because a lot of people were so discouraged that they stopped looking for work altogether, and so they actually dropped out of the dataset and made the unemployment rate artificially look better.

There was a recent analysis by the economists Adam Azamek and Nathan Goldschlag at the Economic Innovation Group that basically found that a very similar thing is happening here, and it completely changes how we think about this question of young people and AI.

So what the EIG folks found is that basically, again, like the story of the Great Recession,

What has been happening over the last couple of years is you've had huge numbers of young people without college degrees dropping out of the labor force, basically giving up looking for work.

And what that basically means, it's the labor market equivalent of the worst performing students not showing up on standardized test day.

All of a sudden, the score, the unemployment rate looks a lot better.

It looks a lot lower for young people without degrees, but that's only because a bunch of the students stopped showing up.