Research presented at a Boston Federal Reserve labor market conference suggests that millions of gig workers in the U.S. might be overlooked in the government’s employment reports. This oversight has significant implications for how the Federal Reserve evaluates the job market and inflation risks. Economists Anat Bracha and Mary A. Burke found that gig workers often don’t consider themselves “employed” or part of the labor force, leading to a potential undercount of those working. Estimates range from a few hundred thousand to as many as 13 million workers, representing a significant portion of the adult population that could be working at least part-time.
This undercounting indicates that the labor market may be tighter than assumed, suggesting that the economy has more capacity to increase work and production without triggering inflation. The research also involved analyzing responses to a New York Fed survey of informal work from 2015 through 2022, revealing discrepancies in how gig work is reported compared to traditional employment. This data gap has implications for long-standing economic theories connecting low unemployment with inflation. Despite these findings, U.S. central bank officials, including Fed Chair Jerome Powell, still see a link between joblessness and inflation.
The research also highlights the potential labor contributions from women and suggests that stronger family and childcare policies could further increase their participation in the workforce. It concludes that the potential hours worked and the potential GDP were likely higher in recent years than official employment estimates suggest, indicating a larger labor supply than previously thought. This could mean that higher economic activity levels may not necessarily lead to inflation, requiring tighter monetary policy.
See first source: Reuters
FAQ
1. What does recent research suggest about U.S. gig workers?
Research indicates that millions of gig workers might be unaccounted for in the U.S. government’s employment reports.
2. Who conducted this research?
The research was conducted by economists Anat Bracha and Mary A. Burke.
3. What are the implications of this discount?
This miscount affects how the Federal Reserve assesses the job market and associated inflation risks.
4. What is the estimated range of this undercount?
The undercount could range from a few hundred thousand to as many as 13 million workers.
5. How does this miscount impact the labor market perception?
It suggests the labor market might be tighter than previously thought, with more room to increase work and production without causing inflation.
6. What other demographic was highlighted in the research?
The research highlighted the potential increased labor contribution from women, particularly with better family and childcare policies.
7. What is the significance of this finding for monetary policy?
If the labor supply is higher than estimated, higher economic activity may not necessarily lead to inflation, impacting monetary policy decisions.
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