Democratic rising star Alexandria Ocasio-Cortez may be a smart young woman, but she has a lot to learn about the labor force and economy. Attributing our low unemployment rate to people holding more than one job is just wrong.
In an interview with Margaret Hoover for Firing Line, Ocasio-Cortez says this about capitalism:
Unemployment is low because people have two jobs. Unemployment is low because people are working 60, 70, 80 hours a week, and can barely feed their kids.
Here’s what she gets wrong:
1. How the unemployment rate is calculated. The unemployment rate, which currently stands at 4 percent, is calculated by taking the number of unemployed people and dividing it by the number of people in the labor force. The Bureau of Labor Statistics, which calculates this rate each month, counts each person – even those with more than one job – only once.
2. Moonlighting is not new. There’s been a marginal change in the number of American workers moonlighting or holding down more than one job. From 2016 to 2017, the rate of workers 16 years old and above with more than one job actually declined from 5.0 to 4.9 percent. In absolute terms, the numbers increased from 7,531 to 7,545.
Is Ocasio-Cortez entirely wrong? She does highlight some pockets of moonlighting.
Among her constituents and certain demographics, there are signs that more workers are working multiple jobs. The rate for Hispanics overall increased from 3.2 percent in 2016 to 3.4 percent in 2017. In New York, many people may (seem to) hold down more than one job or have side-hustles and gigs alongside their primary job, because it’s an expensive place to live.
There were more workers with one full-time and one part-time job last year than the year prior. This isn’t necessarily a bad thing. If workers take more jobs because they want to save up money or pay down debt, the availability of second jobs is a great thing. We don’t know if everyone with a second job is just trying to make ends meet, and it’s disingenuous for her to make that claim.
Ocasio-Cortez blames capitalism for the poverty families face. She adds,
Right now we have is this no-holds-bar-Wild-West-type of capitalism. What that means is profit at any cost. Capitalism has not always existed in the world and will not always exist in the world.
That sounds damning until you look at what capitalism has meant for the world's poor. Global trade and capitalism have allowed poor and developing economies to engage in beneficial trade. Trade helped lift a billion people out of poverty. According to some measures, 700 million people left extreme poverty worldwide between 2001 and 2011.
Capitalism doesn’t sound so bad when we consider that it actually eradicates poverty.
Ocasio-Cortez’s misunderstanding of capitalism and unemployment exposes a lack of economic understanding among many young people on the left. A 2016 Gallup poll found that 55 percent of young people aged 18-29 said they had a positive view of socialism. Yet, 57 percent supported capitalism and 78 percent supported free enterprise.
What we need is for our secondary education system and academia to spend some time explaining what capitalism actually does to young people rather than denigrating it. Then, our rising young leaders might have a bette grasp of how this economic system actually works.