There was rejoicing here at Eurotrib earlier today when the German and French unemployment numbers were reported, but the numbers can be interpreted differently depending on how you use the statistics--and were done so in the English-language press.
In the German case, a change in the statistical method means that "Unemployment in Germany, Europe's largest economy, jumped in September as people who'd been removed from the Federal Labor Agency's register at the start of the year were reclassified as jobseekers." By the old rules there are fewer unemployed, but by the new rules, more. http://www.bloomberg.com/apps/news?pid=10000085&sid=aaEyfQkp69ho&refer=europe
In the French case, unemployment fell if you used the national recording method, but stayed the same if you use the International Labor Organization standards. http://www.businessweek.com/ap/financialnews/D8CUDU9G0.htm?campaign_id=apn_home_down&chan=db
So there is certainly some bending of the rules going on in this whole area.
It seems to me that trying to define exactly what you mean by "unemployment" is pretty tough. A highly paid consultant who is temporarily between contracts is a completely different situation from an unskilled laborer in a weak economy--yet both may be grouped together. And there is the complexity of how to count "working in the home" as employment; surely a mother at home caring for her young children is "working" just as much as the daycare center worker doing the same tasks. This even feeds into the "looking for work" issue, because I know at-home mothers who would work if they could find a job that paid enough to cover daycare costs, but many jobs don't.
It is a statistical nightmare.
Most of the reporting ignores these issues. It goes back to a comment someone made - I think in my Bad Science posting - that the business reporting was the only stuff that wasn't bad. That's not true. Even the business reporting is rubbish.
In the German case, a change in the statistical method means that "Unemployment in Germany, Europe's largest economy, jumped in September as people who'd been removed from the Federal Labor Agency's register at the start of the year were reclassified as jobseekers." By the old rules there are fewer unemployed, but by the new rules, more.
Following the "old" rules unemployment in September 2005 went down around 150,000 people. According to the new rules, unemployment went only down around 80,000 people. But I´m sorry to say, it didn´went up. :) Not according to media reports in Germany at least.
And as you said, we are counting unemployment differently. In Germany someone working 14 hours a week and willing to work a fulltime job is counted as unemployed. While in the USA someone working - in the worst case - 1 hour a week is counted as employed.
So comparing the numbers is difficult.
Just keep in mind that if you´re officially unemployed in Germany, you´re entitled to unemployment benefits. I wonder if that´s the same cases in the USA?
As Americans don't expect anything else and are used to move from job to job, they handle this pretty well. Europeans expect different and don't know anything else than what they have. So, when they are confronted with US labor market conditions and are not well educated professionals, they usually think that the US is not the place of their dreams.
Of course that is completely different for any immigrant from Asia, Latin America or Africa. Those immigrants are simply happy to make any money at all and usually their family structures are still that much in tact that they are doing well. Everybody is working and everybody goes to school somehow, slowly but they go despite the tuition costs.
I give the example for DC. Federal Unemployment Tax are 0.8 percent of your first $ 7,000.00 of your yearly salary. In addition you pay DC Unemployment Tax of 1.6 % of your first $ 9,000.00 of your yearly salary.
here and here some DC Info .
I don't know how regulations are in Germany, but in DC you must have worked for at least a year, must have lost your job without yourself being at fault. I don't know in detail the eligibility requirements and I think they differ from state to state and it's a bit too much to ask that I research it here.
In DC you can't apply for benefits unless you lose your job without being yourself at fault, it means that if you get fired or if you are forced to accept to resign "deliberately", you have no way to apply for unemployment benefits as in both cases, getting fired with fault or accepting to leave deliberately, which is then also your own fault.At least that's how I understand the rule.
You seem to be eligible for unemployment benefits only, if your employer laid you off, because he is financially unable to continue to pay you a salary.
I don't know if that is the same in Germany, I doubt it. According to this German site anybody who has at least worked for one year - and payed during that year unemployment taxes - within the last three years. There are no condition which make your eligibility dependent as to why and how you lost your job, it seems.
The amount of the benefits and the length they are paid out depends on how long you had worked and paid unemployment taxes. gives you an overview that states that if you paid unemployment tax for two years in your previous job, you will get unemployment benefits for one year.
When your eligibility for unemployment benefits are exhausted you still can apply for unemployment help, which are benefits lower than unemployment benefits. I would say this goes a bit too much in detail and would cost me quite some time to come with all the links and information.
The difference to the US seems to be mainly in the eligibility requirements and in the different labor laws concering being employed "at will" in the US without formal work contracts and labor law protections against "firing" someone "at will" from one day to the other.
May be Detlef knows more about the current regulations in Germany and also how long they are paid out. I think they have changed these laws lately.
So, I see a big difference between the requirements an American must fullfil to be eligible for unemployment benefits (and thus most probably also to register as unemployed) vis a vis a German. In the US it is dependent on why and how you lost your job. In Germany it doesn't seem to be the case.
The Federal Unemployment Tax, at an effective rate of 0.8% (maximum $56 per year) is paid solely by employers, not workers, and is not counted in, nor deducted from, an employee's wages. With the exception of three states (Pennsylvania being the only one of the three I could find), the state unemployment taxes are also imposed entirely on employers. And the totals borne by employees are tiny -- for Pennsylvania in 2004 and 2005, the maximum was $7.20 per year, which is pretty close to an insignificant sum; in 2003 it was $1.60; from 1997-2002, it was zero.
Unless one contends that amounts paid by employers on behalf of their workers constitutes a "hidden" income tax on employees (a favorite argument of the extreme right, by the way, in their drive to completely unfetter businesses), unemployment taxes in the U.S. should be seen in the same manner as Workmen's Compensation taxes: as part of the ordinary cost of running any business with employees.
This whole thing brings me back to the point I made before about Republicans capitalizing on this problem. I think there are real problems that the American poor and working classes are facing, but it's extremely difficult to discuss these problems with people on the left because of depredations that have been done by the right under the rhetoric of low taxes. Any discussion about the tax burden on the poor triggers defensiveness (I'm not directing this at you, Maven, you're comment just brought it to mind). Maybe we can eventually make language a complete impediment to understanding. -Hobbes
The question was raised that I made general comments about length and amount of the unemployment benefits in Germany to be higher than in the US and I tried to respond in several comments to bring in some data about that.
That the unemployment contributions are made in the US by the employer and are not deducted from the employee's gross salary wasn't something I thought about in this context. Is it important (to the unemployed benefits receiver) who paid the unemployment taxes, when you just want to compare the difference on the amount and length the benefits paid out to an unemployed persons in Germany and the US?
Without spending too much time wandering afield from your basic point regarding differences between German and U.S. benefits and application requirements, I think that it is relevant to some degree "who paid the unemployment taxes". Very briefly, here's why:
You are very right. Thanks for explaining too the differences in the payment modalities in Germany vis a vis the US.
And you find out that the answer is "not enough."
The system is set up so that couples with both partners working are generally ok. If one person loses their job, the other can at least buy groceries even if they have a pretty low income. Most large payments (house and car) can be deferred for several months before things come crashing down. I lived next door to someone who made no mortgage payments for two years--the bank put up with it because their other choice was to foreclose and end up with a house to dispose of.
