<p>If the true unemployment rate were 20%, things would be very difficult. We would have a situation similar to the Great Depression, and there would be very large numbers of people camping out looking for work. Although there are tent cities around major cities, they are much smaller than was the case during the Great Depression. This tells us that the 20% unemployment rate you give is incorrect. This is not surprising, as the source you cite is well known as being unreliable. It makes money by selling questionable statistics to people who are convinced the the government is lying to them. I only looked at the CPI data on that site, and they implied outcomes that were obviously not consistent with any other public or private data source. I will not pursue that discussion further here; if you wish, ask another question specifically on that topic (“Is the US unemployment rate really 20%?)</p>

<p>The official statistics are consistent with what we know about the economy, although one also needs to understand the official methodology. There is a large amount of underemployment, which shows up in the U-6 unemployment rate, and some ancillary series. However, people who are underemployed are still working, and have some income.</p>

<p>One thing to keep in mind is that the unemployment rate is a survey, like an opinion poll (but a much larger and better-designed sample). <a href="https://www.bls.gov/cps/cps_htgm.pdf" rel="nofollow noreferrer">This document provides a summary of the BLS methodology.</a> Since the BLS needs to sample the same people for 4 months in two years, I believe that they cannot include homeless people in the sample (that is a guess on my part). So yes, the people in tent cities are likely invisible in the employment data (although they mught show up in the census; I do not know). You would need to go to other sources to find estimates for the homeless population; I would not suggest the source you originally cited.</p>

<p>Also, the government cannot track illegal activity on a high frequency basis - by definition. Therefore, there are no monthly estimates of the number of people earning money with criminal activity, nor working “under the table.” In some European countries with generous welfare states, it is suspected that a good number of “unemployed” people were working in construction before the Financial Crisis. Once again, you would need to track down estimates from other sources.</p>

<p>Otherwise, they either have to live off savings, credit, or family and friends; they could have a partner that is working (which is fairly common). The phenomenon of grown children coming back to live in their parents’ basement is well known. Also, student loans are widely available, allowing people to drop out if the labour force and pursue training/education. Also, food bank usage is quite high, and so that reduces required spending.</p>

CC BY-SA 3.0
2018-02-02T22:13:50.430Z
It's definitions.  The percentage of adults who do not work is certainly over 20%, probably over 30%; but that also includes many people who are not looking for a job, or who even want a job.  Those are rightfully (and openly) excluded from the official metrics.  I expect the vast majority of those are supported by family.
Ask About Monica
CC BY-SA 3.0
2018-02-03T13:14:55.950Z
If you look up the employment-population ratio on FRED, only about 60% of the “working age” population works. So it’s 40% of the population not  20%. People are students, married, retired early, rich, hospitalised, etc.
Brian Romanchuk
CC BY-SA 3.0
2018-02-02T13:31:56.393Z
2018-02-02T14:07:19.080Z
2018-02-02T14:07:19.080Z
Brian Romanchuk
<p>In USA, more than 1 in 5 persons in working age are unemployed (that includes people looking for jobs, and also the ones not looking for jobs, so is not just the officially unemployed population).</p>

<p>That number is taken from private sources (like <a href="http://www.shadowstats.com/alternate_data/unemployment-charts" rel="nofollow noreferrer">this one</a>)</p>

<p>The question is: What is the source of income for that people?
Is there any data on it?</p>

<p>They cannot all live from welfare (for a decade). A large percentage had work until 2009.
They live off rents?
From family support?
Are most of them beggars?</p>

<unemployment>
Unemployment. What is the source of income?
nocapo
# Unemployment. What is the source of income?

(Asked by: username_0 on 2018-02-02)

In USA, more than 1 in 5 persons in working age are unemployed (that includes people looking for jobs, and also the ones not looking for jobs, so is not just the officially unemployed population).

That number is taken from private sources (like [this one](http://www.shadowstats.com/alternate_data/unemployment-charts))

The question is: What is the source of income for that people?
Is there any data on it?

They cannot all live from welfare (for a decade). A large percentage had work until 2009.
They live off rents?
From family support?
Are most of them beggars?

**Tags:** unemployment

---

## 1 answers

### Answer by username_1 on 2018-02-02. Score: 2

If the true unemployment rate were 20%, things would be very difficult. We would have a situation similar to the Great Depression, and there would be very large numbers of people camping out looking for work. Although there are tent cities around major cities, they are much smaller than was the case during the Great Depression. This tells us that the 20% unemployment rate you give is incorrect. This is not surprising, as the source you cite is well known as being unreliable. It makes money by selling questionable statistics to people who are convinced the the government is lying to them. I only looked at the CPI data on that site, and they implied outcomes that were obviously not consistent with any other public or private data source. I will not pursue that discussion further here; if you wish, ask another question specifically on that topic (“Is the US unemployment rate really 20%?)

The official statistics are consistent with what we know about the economy, although one also needs to understand the official methodology. There is a large amount of underemployment, which shows up in the U-6 unemployment rate, and some ancillary series. However, people who are underemployed are still working, and have some income.

One thing to keep in mind is that the unemployment rate is a survey, like an opinion poll (but a much larger and better-designed sample). [This document provides a summary of the BLS methodology.](https://www.bls.gov/cps/cps_htgm.pdf) Since the BLS needs to sample the same people for 4 months in two years, I believe that they cannot include homeless people in the sample (that is a guess on my part). So yes, the people in tent cities are likely invisible in the employment data (although they mught show up in the census; I do not know). You would need to go to other sources to find estimates for the homeless population; I would not suggest the source you originally cited.

Also, the government cannot track illegal activity on a high frequency basis - by definition. Therefore, there are no monthly estimates of the number of people earning money with criminal activity, nor working “under the table.” In some European countries with generous welfare states, it is suspected that a good number of “unemployed” people were working in construction before the Financial Crisis. Once again, you would need to track down estimates from other sources.

Otherwise, they either have to live off savings, credit, or family and friends; they could have a partner that is working (which is fairly common). The phenomenon of grown children coming back to live in their parents’ basement is well known. Also, student loans are widely available, allowing people to drop out if the labour force and pursue training/education. Also, food bank usage is quite high, and so that reduces required spending.

> **Comments:**
> **username_2**: It's definitions.  The percentage of adults who do not work is certainly over 20%, probably over 30%; but that also includes many people who are not looking for a job, or who even want a job.  Those are rightfully (and openly) excluded from the official metrics.  I expect the vast majority of those are supported by family.  
> **username_1**: If you look up the employment-population ratio on FRED, only about 60% of the “working age” population works. So it’s 40% of the population not  20%. People are students, married, retired early, rich, hospitalised, etc.  

---

