All countries, whether inadvertently or on purpose, distort their unemployment pictures with the public sector, and we'd have to take on quite an accounting project to get the full story.
My main point was that we couldn't look at it in a static model, in which those in prison or in the military would be unemployed but for being in prison or the military. Certainly many would be, especially among the prison population. I don't deny that for a moment. But many would not be. A lot of it is simply a matter of resources being shifted one way or another -- or, in the case of prison, taking people, some who would be productive, and making them unproductive.
As always, macroeconomics doesn't lend itself to clean mathematics. It's murky. Better to focus on trends and how the degree of impact from different variables may affect things than to say "X means y." It's sort of like trying to call the point at which we hit recession. We can all see a recession coming in many cases, but when it actually hits is anybody's guess. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
Yes, frankly, I think macro-economic indicators (as far as I understand them), are a mess, along with methods of observation. The trouble is the big numbers are wheeled out and used to keep everyone's mind rolling on the same tracks. I think it's worth taking them apart and putting them together again to see what they're made of, and particularly identifying where and how they're made of bs, or don't mean what they're plugged to mean.
Now, if income growth is lagging for such a large number of people that the indicators clearly don't mean shit, I'd think we start to see dissatisfaction in polling on the economy. And, indeed, that's exactly what we've seen in America. The press hasn't understood it, but anyone who's familiar with the important numbers can tell exactly what the public is so pissed off about: The typical American's income changes have ranged from falling to only slightly rising over the current business cycle. Conservatives want live babies so they can raise them to be dead soldiers. - George Carlin
