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The Inverted Example of Spinning Jobless Statistics

by DoDo Thu Feb 16th, 2006 at 11:52:29 AM EST

In this diary, I can connect the ongoing EuroTrib theme of debunking the mis-use of statistics in economics punditry and policymaking with my ongoing reportage of the mad election campaign in Hungary!

In the last two weeks, while the two smaller parties started traditional (e.g. uninspired contentless) poster campaigns with the basic message, "we're still there!", the two bigs rolled out some serious negative campaigning for the first time (first time under their own name).

It is more than grotesque that both parties try to outdo the other in socialistic rhetoric, while I won't trust either to be honest about that. Anyway, the two opposed poster campaigns try to trash the other's social record (the one in opposition ruled 1998-2002) with flashy numbers showing four-year turns for the worse.

The one that is worth to counter here is about jobless numbers - because the underlying truth is an inverted version of the trickery played by some in the West, say in the USA or the UK.

Said poster is one of the opposition right-populist party, and displays the number "400,000": the number of registered jobless people. Here is the development of that figure until last November:

Now that doesn't look good at all, does it? Only, you'll see an entirely different story if you look at the number of employed, too1:

What you see is two positive trends (overlaid by a minor 2003 boom/2004 bust cycle):

  • a steady growth of employment, and
  • an even faster return of people into the workforce (after the economic collapse and shock therapies - in Hungary, 1995 - of the nineties).

And even the negative trend in-between has a structure that lends to optimism: the growth is almost exclusively of the active unemployed, which indicates both (a) shorter-term unemployment, and (b) wider coverage.

All in all, this is the opposite of what is done in certain countries where a decrease of jobless numbers is touted as great success, while in truth the percentage of employed declined - and longterm jobless were pushed outside of the economy. Two more general thoughts:

The "demographic crisis"

You may have noted that my second graph doesn't display activity and joblessness as percentage of the active-age population, nor as a percentage of the adult population, but the entire population. The picture wouldn't change if I used the other two measures, but I'm trying to make a more general point with this - let me repeat one of my returning hobbyhorses below, the one on the "demographic crisis" of an ageing population.

I contend an ageing population is not the real issue (not an economic danger); the real issue is what percentage of the total population works, and what percentage is supported by those who earn for a living.

What ratio of these supports for non-workers takes the form of (a) payments into retirement funds, (b) taxes used for jobless benefits, (c) taxes used to support families with children, or (d) money parents spend on their children (or workers on their elders or housewives/husbands), is secondary.

If you reduce the number of pensioners by pushing up the number of the jobless, or reduce the jobless number by sending people into early retirement, or reduce the ratio of pensioners by having couples bear four children each, you won't solve any problems - you are only shifting costs between different accounts.

On the other hand, if the goal is to reduce the tax load of companies by making as many non-workers as much poorer as possible; or (as Jérôme argued) if a financier who'd like to take his hands on state-administered funds, the talk about a demographic crisis comes handy...

Comparing countries

I dug up comparable third-quarter numbers for two other countries, to calculate the employment figure according to the measure I argued for:

  • Hungary: 39.0%
  • Germany2: 47.2%
  • USA3: 48.2%

One thing apparent is that the chronic 'Old European' problem isn't one, even if we don't consider the more generous definitions of US statistics and the employment effect of the military-industrial complex.

Another is that behind the impressive macroeconomic numbers of much-praised 'New Europe', you'll find a lot of people who disappeared in an employment black hole (either into the black market or into chronic poverty), and it is not just earnings in which we have to catch up with with Western Europe.

As a bonus, a third graph: development of income (which includes bonuses), brutto and netto wages in Hungary, inflation-corrected:

  1. Note: the activity graph is from the household survey, the previous is an absolute number of people tracked by employment agencies - active + passive unemployed roughly correspond to it. It must be noted that potential but lethargic job-seekers outside of the workforce are probably a much wider group than those covered by the household survey's criteria.
  2. Employment from most recent quarter numbers, population interpolated between 2004 number and 2005 estimate.
  3. 3-month average of monthly total employment from household survey; population 3-month average of Census monthly projections [Excel!] by the widest measure to include overseas military.

Great data and graphs.

This just emphasises how misleading comparisons between "developing" and "mature" economies can be...

by Metatone (metatone [a|t] gmail (dot) com) on Thu Feb 16th, 2006 at 12:48:51 PM EST
I managed to pick seasonally adjusted employment figures for the USA... now corrected (link in footnote too), the figure changed from 48.0 to 48.2%.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Fri Feb 17th, 2006 at 04:35:33 AM EST
To not clog up the diary, here is some update on the story of the Oscar-crowned director who was exposed as an informant - first reactions, and then a development a week ago that shed much more light on the backstory. (And at the end, I post the usual links to earlier diaries on Hungarian politics.)

The initial responses were, well, from my viewpoint, disgusting. The director, István Szabó, gave in interview in which he presented what he did (informing the secret service about his classmates and teachers during his time at the film directors' school almost 45-50 years ago) as a heroic act of disguise to protect one of his classmates, who took part in armed resistance in 1956 and there was filmed evidence for that hidden collectively by the people at the film school. This had a rather stark contrast with the guilt and self-criticism apparent with hindsight in all his films, and even more apparent in past interviews dug up by newspapers.

140 liberal intellectuals signed a petition declaring that they still value him highly because of his work (so life achievement absolves denunciation? The Elia Kazan problem), and there were diverse attacks on the publishing paper, accusing them of ulterior motives or not giving context or strange timing (despite the fact that that weekly journal has an eight-year on-going series on spies).

What was interesting was that those still living of those whom Szabó reported on were to the most part very conciliatory. In fact I read of only one stronger criticism, still one focusing on Szabó's version of saving a classmate - and saying Szabó really wanted to save himself. Szabó later withdrew the claim but didn't apologise. Others also criticised the story of the hidden filmed evidence, pointing out that the person Szabó identified with his classmate has been reliably identified as someone else.

As now usual during every big spy exposure scandal, some other exposures followed in fast succession. One was a former cardinal of Hungary - probably another case when controlling the informant was more valuable to the dictature than the information he delivered. (He signed in the seventies after seven years of harrassment.) The other was the self-exposure of a classmate of Szabó. And this one was really interesting.

It was especially interesting as he wrote up his recollections during a previous spy scandal 3 years ago, but only dared to publish it now - so it is kind of an idependent check on Szabó's version. He, Szabó, and a third, since dead classmate (out of a class of 10) were arrested when leaving a theatre early 1957 - in the framework of a wide 'pre-emptive' clampdown on students whom the regime feared would revolt again in March. All three became informants (without knowing the others became too), from this one's story, with the simple blackmail of killing their career.

From this guy's account, what in Szabó's reports I thought to be enthusiastic forthcoming information, turned out to have been exactly what was demanded. Another interesting angle was that informants had to fear that if they had been to a collective event, another informant was present, and if they left out something the other didn't could get them into prison.

This guy also recounts the story of finding that filmed 1956 material on which they recognised a classmate, and everyone colectively keeping the secret - so this was true, people must have mis-recognised him, on the other hand this wasn't the reason behind becoming an informant. Also, this guy was the "I'm a coward but a saboteur" type informant: he would be ditched after giving unsatisfying reports and not keeping appointments and playing an idiot.

In the end, my impression is that in the case of Szabó, three motivations mixed, with about even weight, and not without cognitive dissonance: his wish for a bright career, still being a faithful believer in the regime, and protecting friends by filtering the information the secret service gets. It also looks like he apparently did little damage to his fellows in the end, though classmates who died since may have more grave stories.

  1. After a bizarre press vs. politicians court case, an introduction of parties & history since 1989.
  2. The workings of non-issue-based politics: the tragicomical double referendum on barring hospital privatisations and giving neighbouring countries' ethnic Hungarians double citizenship.
  3. Bush and Hungary: why the nominal centre-left (now governing) is pro-Bush and the nominal centre-right opposition anti-Bush.
  4. Campaign season opens - half a year early.
  5. Further in the campaign, October polls and nonsensical rhetoric (how can you give preferential treatment to both the elites and the poor?)
  6. The juiciest of the many storm-in-the-bathtub scandals: Mata Hari in Budapest
  7. A foray into history (not much to do with recent Hungarian politics, but some further perspective for the debate on Turkey's accession to the EU).
  8. European Dream: where would Hungarians like to live?
  9. Hungarian Orange (no relation to the Ukrainian version): on a clever opposition poster campaign and its contrast with reality.
  10. On another poster campaign by the same party - how to outsource negative campaign, and how it can be made to backfire.
  11. Of Socialists and Presidents.
  12. On The Mephisto Behind Mephisto and exposed spies for the former 'communist' regime.

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Fri Feb 17th, 2006 at 05:29:31 AM EST
Very interesting.

Your link to #12 is broken, and you should make this its own diary.

A society committed to the notion that government is always bad will have bad government. And it doesn't have to be that way. — Paul Krugman

by Migeru (migeru at eurotrib dot com) on Fri Feb 17th, 2006 at 05:47:01 AM EST
[ Parent ]
Thanks for catching that! Correct link.

OK I will diarise it. When I started to write it, I didn't realise it will be so long...

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Fri Feb 17th, 2006 at 08:46:50 AM EST
[ Parent ]
It is more than grotesque that both parties try to outdo the other in socialistic rhetoric, while I won't trust either to be honest about that.

Ah, the Cassandra in me...

Just today, MSzP (Socialist Party, the major party in government) had a 'campaign-start' event - a disgusting US-style show, launching a campaign titled "New Hungary", crowned by PM Gyurcsány marching in side-by-side with a special guest - Tony Bliar...

Just to repeat again why I hate him so much, the greatest non-war crime of Bliar is that with his blinding rhetoric and apparent success (no one looks at FTPT), he served as role model and inspiration for a whole generation of centre-left leaders across Europe. Bliar did immense damage to the Left.

*Lunatic*, n.
One whose delusions are out of fashion.

by DoDo on Fri Feb 17th, 2006 at 02:09:57 PM EST
Very true. It is fascinating just how easy they were to convince thought...

Almost makes me think we should be glad Bush showed up to revitalise the leftist grassroots. Almost...

by Trond Ove on Sun Feb 19th, 2006 at 06:30:27 PM EST
[ Parent ]

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