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How to think about employment and unemployment.

by Colman Mon Jun 26th, 2006 at 06:29:09 AM EST

I've been accused recently of everything up to and emulating UFO believing conspiracies recently for trying to understand and illuminate the reality of unemployment and employment. I've been told to simply use the existing statistics, that I should trust the experts at the OECD despite the fact that the statistics in question give only a partial picture, something that is abundantly clear if you actually read the reports of those experts in detail.

Unemployment statistics measure something very precise, cheap and easy to measure: the number of people who have recently looked for a job and failed to get one. They neglect all sorts of other people who are, for any reason, no longer looking for a job. This ranges from those on disability benefits who may be forbidden from looking for a job to those who have retired early because they can to parents staying at home because they want to raise their families to parents staying at home because it is uneconomic to work and pay for their young children to be minded to myriad other cases. Nor do unemployment statistics take into account differences in the choices that countries make which affect the composition of the labour force: a large military and prison population in the US, massive free education in France, training schemes and so on across Europe. Not to mention emigration and immigration.

Comparing labour markets without taking into account all those factors is impossible. The official OECD unemployment rate takes the simplest possible measure and ignores everything else. It can tell you something about changes in the labour market within a country but it's not an effective way of assessing differences between them. It is useful, if it's not manipulated by government policy, as a measure of how an economy is performing: dropping unemployment generally does mean that more jobs are being created in an economy. Rising unemployment isn't a good sign: even the aliens agree on that.


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I have a more useful post in the works for later, but I have a flying saucer to polish right now.
by Colman (colman at eurotrib.com) on Mon Jun 26th, 2006 at 06:37:43 AM EST
Where were you accused thus?

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Mon Jun 26th, 2006 at 07:25:56 AM EST
[ Parent ]
See the debate box.

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 Mon Jun 26th, 2006 at 07:29:13 AM EST
[ Parent ]
wc?

*Lunatic*, n.
One whose delusions are out of fashion.
by DoDo on Mon Jun 26th, 2006 at 07:39:45 AM EST
[ Parent ]
See also Colman's cross-posted diary on dKos.

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 Mon Jun 26th, 2006 at 07:40:58 AM EST
[ Parent ]
Just waded through it for an hour...

...actually not so bad: most comments were supportuve, only a few obnoxious.

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

by DoDo on Mon Jun 26th, 2006 at 09:13:46 AM EST
[ Parent ]
And a lot of the negative comments point to some important issues about presenting the stuff.
by Colman (colman at eurotrib.com) on Mon Jun 26th, 2006 at 09:16:22 AM EST
[ Parent ]
that to actually understand statistics, you need to know what you're talking about?

Commie traitor.

In the long run, we're all dead. John Maynard Keynes

by Jerome a Paris (etg@eurotrib.com) on Mon Jun 26th, 2006 at 09:11:16 AM EST
We were all happy with a single number that all locales and historical periods could be ranked on, and here Colman and Laurent are busy trying to undermine that progress with multiple statistics, for nefarious political reasons.

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 Mon Jun 26th, 2006 at 09:18:47 AM EST
[ Parent ]
...you know..weird times..

..something about trying to beat them with the dice charged?...you know...while we keep believing blindly in the statistics that they feed us...no hope.

Keep on!!!!!

Kiyaaaaaaa

A pleasure

I therefore claim to show, not how men think in myths, but how myths operate in men's minds without their being aware of the fact. Levi-Strauss, Claude

by kcurie on Mon Jun 26th, 2006 at 09:25:33 AM EST
A note on other economic statistics. I have long suspected that GDP/capita becomes an important measure at about the same time as you can get that number from the tax offices.

I read an old encyclopedia (1930ies I believe) that did not contain any concept of GDP, but instead had National Fortune, a concept which - though hard to measure - was believed to show the relative strength of countries economies. National Fortune was the value of all the stuff in country. Buildings, roads, bridges, railroads, cars, horses, gold (never forget the gold) and so on. I think those who used National Fortune and National Fortune/capita would have scoffed at GDP and GDP/capita and pointed out that this only measures the amount spent and received nationwide, not what that capital produced. In terms of National Fortune there is a wide difference between building a road and blowing up a road, while the effect in GDP might be the same.

Sweden's finest (and perhaps only) collaborative, leftist e-newspaper Synapze.se

by A swedish kind of death on Mon Jun 26th, 2006 at 01:54:26 PM EST


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