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Unemployment in the UK is Now So Low It's in Danger of Exposing the Lie Used To Create the Numbers (businessinsider.com)
Unemployment in Britain is now just 4.5 percent. There are only 1.49 million unemployed people in the UK, versus 32 million people with jobs. This is almost unheard of. Unemployment was most recently this low in December 1973, when the UK set an unrepeated record of just 3.4 percent. From a report: The problem with this record is that the statistical definition of "unemployment" relies on a fiction that economists tell themselves about the nature of work. As the rate gets lower and lower, it tests that lie. Because -- as anyone who has studied basic economics knows -- the official definition of unemployment disguises the true rate. In reality, about 21.5 percent of all working-age people (defined as ages 16 to 64) are without jobs, or 8.83 million people, according to the Office for National Statistics. That's more than four times the official number. For decades, economists have agreed on an artificial definition of what unemployment means. Their argument is that people who are taking time off, or have given up looking for work, or work at home to look after their family, don't count as part of the workforce.
To call it a "lie" implies some sort of bias. Assumptions are often built in to such statistical analysis. Why is it a lie this time?
"... don't count as part of the workforce" what is the lie? at worst it might be a case of badly defined? what is the lie?
people not looking for work... are not part of workforce. it would be a "lie" to include those that don't want/cant work as well!!
I would have said the lie is that many of the jobs are shit. In fact the big lie is that we need most of those people working to create wealth - most people create no value in their shitty jobs.
Maybe they need to switch to a new reporting metric: how many people are unemployed, or working part time/multiple part time jobs when they would rather work full time? Personally, up until about 2-3 years ago, I was making $13 an hour with a graduate degree. I wasn't unemployed, but I also certainly wasn't making the economic impact I could have. With enough people working minimum wage jobs, part time, or stuck in the gig economy, you are still going to have negative impact on the economy, social unrest, and reliance on government support programs just as if you had unemployment.
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I'm still breathing a little after having had someone's shocked ignorance over a commonly known and accepted fact shoved down my throat.
What? Your 16 your old kid in school isn't considered unemployed? What? My Father who took early retirement at 60 wasn't considered unemployed? What?
The house wife who's taking care of her three year old son isn't considered unemployed? Shocking!
This is stupid. Anyone who's read anything about the unemployment knows that the unemployment rate has never been a perfect measure of true unemployment. It's not a "lie", it's an imperfect model. That's well known by economists, and they actively try to correct for it and take it into account. Has the author seriously not read a newspaper article over the last 10 years where they discuss the unemployment rate going down possibly being a bad thing, because it might mean people have given up looking for work?
Right, the real lie about unemployment figures is that they don't account for underemployment.
Sure, lots of people have jobs, but how many have an 8 hour contract, and are begging the company to let them come in and work minimum wage?
It doesn't matter how you measure unemployment. The data is only going to be used to compare to historical values. If the definition of unemployed were to be changed, the historical data would be useless.
This is the whole accurate versus precise argument. The author argues the number isn't accurate. However, the purpose of this data doesn't require accuracy. It requires precision, a repeatable outcome.
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Absolutely. In the US, there are many metrics that are reported and that help understanding the state of the labor force. Called U-1, U-2, ... U-6 which represent different aspect of the questions.
Saying that the unemployment should be the fraction of the 16-64 year old that do not work is ridiculous.
I did not start working until I was 25. I was a student before. Counting me as unemployed at that time would have been ridiculous.
If I chose to stop working at 60 because I have enough money to retire, why should I count as unemployed?
There are different category of people that do not work which surely needs to be reported. The definition of unemployement used in the US (U-3) is the one quoted, because it is the one that matches better the definition that other country used.
But you need to account differently people not working because they are studying, people that are working but would like a different job, people that are working but not full time, people that stopped looking because they do not believe they can find a job.
There are all important numbers that should all be reported. But in a short piece, you can not give that much context, so you quote a single number "unemployment" which will always be kind of misleading. But calling it a lie is ridiculous.
Life is complicated, a single number can not summarize everything accurately.
If you can't force legally press someone into labor, then there's no point reporting on anyone that is unwilling to or incapable of working.
If you know that 4.5% of Britons want work, but can't find it, then you can act on that information: find them, find open jobs within their skill-sets, and make connections.
If you know that 21.5% of working-age Britons aren't working, you have to do a LOT MORE work to filter out who can/can't work and who won't work.
The point of it is to hide how hard it is for folks to find work and keep any discussion about helping them (which would be expensive) under wraps. It's part of a larger pattern of class warfare against the working class. After all, the best kind of wars are the ones where the other side doesn't know they're fighting.
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Do not forget the infamous “zero-hour conracts”, where the person has, technically, a job, but not actually an income. It looks like there are almost a million of these in Maggie's country.
The bias is that (fake) low unemployment is favorable to the prevailing economic doctrine that is supported by mainstream politics.
To call it a "lie" implies some sort of bias. Assumptions are often built in to such statistical analysis. Why is it a lie this time?
It's a lie because the original definition communicated to voters an indication of how the economy was doing, while the current definition leans on that previous definition to give the appearance of a healthy economy when in fact it's terrible.
It's a lie because there has been enormous political pressure to skew the definition towards "statistical assumptions" in a way that suppresses voter outrage and dissent.
It's a lie because the value has morphed from a valid "quick snapshot" of the health of the economy, to a propaganda tool of the government for partisan purposes.
A much better indicator is had by random sampling, such as the Gallup poll, which tracks both employment and "underemployment". Here, underemployment is "people employed under 30 hours a week, but want to work more"(*).
(Also: Gallup good jobs index, which indirectly tells how satisfied workers are with their jobs.)
The Gallup poll notes that the results(*) can't be directly compared because federal statistics are "seasonally" adjusted. Seasonally adjusted? Why should unemployment numbers be adjusted *at all*?
(*) The article is about the UK, not US, but the principles are the same.
Any abstraction is going to hide information, does it really make sense to count someone who took early retirement, or is doing full time childcare as unemployed?
Yes, because they are unemployed. The common definition of "unemployed" is "not employed". The first online dictionary entry that google returned says "person without a paid job but available to work." Neither one includes any mention of "retired" or "wants to work".
The "weird ideology" here is called "the English language".
Now, the politicians in power want to make the unemployment numbers look lower than "unemployed" would, so they include "seeking work" as part of the measurement. Every administration in the US that has wanted to make themselves look proactive towards job creation has relied on the modified definition.
However, the answer to "does it make sense" when applied to a number that is being used to measure the employment economy is actually "no", because it is silly to count housespouses, retired, or those who are no longer seeking employment as "unemployed" for the sake of how much money to invest in creating new jobs.
It's also silly (or dishonest) to hide them by using the word "unemployed" incorrectly. There is a better word: "underemployed". People who are employed less than they want to be. That would naturally include part time workers who want to work full time, and any government action to try to increase the number of jobs should include consideration of those folks, too.
Given the way the term "unemployed" is deliberately misused, it is not a "ideology" to point that fact out occasionally. It is a valid reminder of what the government is actually telling us, and not telling us.
Worth pointing out to those Americans who seem to forget every time something good happens to the UK economy: Brexit has not happened yet. Lets discuss unemployment in the UK at the end of 2019 and see if everything is still so good it's a problem.
I have no idea if it will be, I'm not an economist. My main interest in Brexit was schadenfreude, and that only lasted a few months...
No, his argument is spot on. Other people in this thread are saying things like, "The common definition of 'unemployed' is 'not employed'.... The 'weird ideology' here is called "the English language'." That pretty closely matches the spirit of the original article [summary], which said that unemployment statistics should include everyone who is not currently in a job, including "people who are taking time off ... or work at home to look after their family."
The grandparent provided an enlightened discussion of why the current approach to unemployment statistics makes more sense than the original article, and pointed out that there are many useful ways to count unemployment. In that context, your response made no sense at all. You seem to be saying, "the current system would count you correctly, so you shouldn't defend the current system."
At least some of the changes were done deliberately in order to mislead. This is called "lying".
Where is the evidence of that? The article itself lacks any evidence of deliberately misleading information. However, the authoer of the article itself is very misleading when s/he claims that the "true" figure is 21.5% which they apparently obtain using all people of working age. This does not exclude stay-at-home parents, students and those too disabled or sick to work and so is clearly going to be a wild overestimate.
While it might be true that the current statistics are not giving a true picture but if you want to claim that this is due to lying i.e. a deliberate attempt to mislead, you need to explain why. Governments may be untrustworthy but so are the media so I'm certainly not going to take the word of some random website without a solid, evidence-backed argument.
It, umm... actually is in this case. Nobody wants to immigrate and start a life in a place they might get kicked out of, depending only on the whims of politicians and the general electorate, so there's a shortage of labor... in job areas that that 4.3% of job seekers is either incapable of doing, or unwilling to do at previous prevailing wage rates.
Someone had to do it.
Brexit has not happened yet. Lets discuss unemployment in the UK at the end of 2019 and see if everything is still so good it's a problem. I have no idea if it will be, I'm not an economist. ...
Would it matter if you were an economist? They have no real idea either. You're simply being more honest about the limits of your knowledge.
The "% of people actively looking for work" definition of employment is entirely valid for it's intended audience.
The people that track unemployment don't give a crap about newspaper articles or politicians.
Instead they are trying to tell people how hard much competition there is to find a job. The employers need to know if they are going to get 1,000 applications, or just 1. So do the job seekers.
Just as Mode and Median are perfectly valid types of "Averages", so is the "% looking" valid for unemployment.
Stop misunderstanding what people are saying and then blaming them for your own stupidity.
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I've bolded the important part. TFA makes no such claim, and in fact states that the same measure has been used for decades. If you have evidence that the definition of unemployment was changed to make the economy look better than it actually was, please present it. The argument TFA presents is that the economy has changed so that the definition no longer paints as clear a picture of the economy as it did in the past.
From a statistical perspective, as long as the definition and method of measurement remains consistent over time, it is useful data. It is even more useful when paired and analyzed together with slightly different measures like the inactivity rate as TFA does. But it's not a lie. It is data. Not everything in life has a clear-cut and straightforward definition. So you come up with a definition that is clear-cut and straightforward (and usually selected because it's easier to measure), and you use it to collect data. If you don't like the definition, you can come up with a different definition and collect data on it. But calling the data set you dislike a lie is nothing but an ad hominem attack.
I also find the title of TFA (and summary) highly suspect. The title claims the unemployment figures are very close to exposing the purported lie in the definition of "unemployment". But for that to actually happen, the unemployment rate would have to go negative.. That is, everyone who is looking for a job gets one. And a few people who don't want a job have one (how, I dunno - slavery?).
I'm all for educating people that the definition of "unemployment" is not as clear-cut as they might assume at first glance. But calling it an outright lie is nothing but grandstanding.
No, it's a science misunderstood by people who don't know economics.
The reason you count out these people not looking for work is because you need comparable metrics across countries and time.
If a nation for some reason culturally has, say, all of their women staying at home as housewives, would you count them into the unemployed category? No.
If you tried to compare that nations unemployment rate to another, perhaps to compare an effect something had on unemployment, and the other had a very low rate of women wanting to be stay at homes, the numbers are meaningless.
And shit comments like yours are why people lack basic economic comprehension.
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