Twenty Million People Became Unemployed Last Year

By Matt Bruenig, People’s Policy Project

Jeff Stein had a piece last week in which he asked various economists why they think the public has a negative view of the economy right now despite the fact that, by many measures, it is doing fairly well. In the piece, Jason Furman answered the question this way:

Many economists — including top Democratic ones — say this trend provides a simple explanation for voter anger. The job market recovery benefits roughly 6 million Americans who have been hired, whereas inflation hurts the roughly 150 million Americans who already had a job last year but are now getting poorer, said Jason Furman, who was a senior economist in the Obama administration.

Furman’s point is simple enough: the increases in hiring benefited a small number of people while the decreases in inflation-adjusted wages hurt a large number of people. But I think Furman’s argument here is actually weaker than it needs to be and the reason for this weakness is that his implied mental model of unemployment as affecting a specific, identifiable group of people who are out of work when times are bad but are brought into employment when times are good is not really how unemployment works.

When we say that 6 million people got a job last year, that is a net figure. What actually happened is that 20.3 million people lost a job at some point last year and 26.6 million people got a job at some point last year.