See a problem? This “full employment” is one of those desert mirages: cool, refreshing water that isn’t really there.
Driving To Poverty
It’s true that the economy is changing. People have new opportunities that old data methods don’t capture.
However, the data we do have isn’t always encouraging. Consider the “gig economy” jobs, like driving for Uber or Lyft, which give people a way to make extra income. Maybe it helps, but not much.
Drivers for the ride-sharing services have to pay their own expenses. According to an MIT study released last month, the median driver profit is $3.37 per hour before taxes. And that’s the median, so half the drivers make even less.
MIT found that 74 percent of Uber and Lyft drivers earn less than the minimum wage in their state, and 30 percent actually lose money when you add in vehicle expenses.
For some, the loss might have helped reduce their taxes on other income. But the higher standard deduction that takes effect this year may reduce or eliminate that benefit for many.
Clearly, the gig economy isn’t as miracle-producing as some people think.
Incoming Data
This Friday, we’ll get another round of jobs data, and it will probably look good on the surface. For some people, it probably is good—but not for everyone.