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Businesses The Almighty Buck

Unemployment in the UK is Now So Low It's in Danger of Exposing the Lie Used To Create the Numbers (businessinsider.com) 364

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.
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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

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  • by CajunArson ( 465943 ) on Monday July 24, 2017 @01:04PM (#54868331) Journal

    Before Brexit the UK never had these problems at all.

    They need the EU to take over so that unemployment numbers are never in danger of getting anywhere close to zero.

    • by Anonymous Coward

      It's not a science

    • by interkin3tic ( 1469267 ) on Monday July 24, 2017 @02:09PM (#54868927)
      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...
    • by skids ( 119237 ) on Monday July 24, 2017 @02:50PM (#54869257) Homepage

      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.

      • by green1 ( 322787 )

        Britain is currently in the situation where uncertainty is preventing immigration, and convincing current residents to leave, but rules aren't yet blocking exports, raising import prices, or otherwise killing jobs. This can't yet be extrapolated to show what life will be like once brexit is finalized.
        The balance will be restored in two years once brexit is actually implemented, and only then can we see what the end result is.

        To claim that brexit is causing low unemployment, and will save the country when it

  • by DaTrueDave ( 992134 ) * on Monday July 24, 2017 @01:04PM (#54868341)

    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?

    • Re: (Score:2, Insightful)

      by Anonymous Coward

      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.

      • by beelsebob ( 529313 ) on Monday July 24, 2017 @01:18PM (#54868443)

        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?

        • There are other, perhaps honestly, deceiving nuances to unemployment statistics that people (myself included) don't like. I think the terminology should be changed To something a bit different.

          Most people have a solid definition of what "employed" means. When the term "unemployeed" is used, it's thought by many to be the entire of people who do not fit the definition of "employed"--which they already understand.

          Reality is, "employed" + "unemployed" != "total population." I'm not saying it should for analysi

          • I know, I wish all those bloody children and retired people would find jobs. I'm fed up with them not being employed and hence being unemployed.

            Same too with all those members of the Royal Family who have so much money they don't need a job - I'm fed up with them inflating the unemployment numbers.

            Most people are not idiots and do not think that "unemployed" = "everyone who is not employed". Most people can quite happily understand that some people are not part of the labour market.

            It is quite reasonable to

        • by imgod2u ( 812837 )

          At least in the US, the BLS separates full-time employed with benefits compared to part time or contracting work.

      • ...most people create no value in their shitty jobs.

        If that's so, why do you suppose someone is paying them?

        I'm not sure what you include in the shitty job category. Cleaning bathrooms, perhaps? Yup, shitty job, literally. But I sure value having clean bathrooms here in my office.

        • Re: (Score:3, Informative)

          by TheRaven64 ( 641858 )
          In some cases, because people in management justify their existence (and salaries) by the number of people that report to them. Add more employees, manager's importance goes up. That provides a strong incentive to have employees that don't do anything useful, but do report to you.
    • Re: (Score:2, Funny)

      by Anonymous Coward

      It was always a lie, one that was convenient to those in power.

      In unrelated news, this month's chocolate ration has increased from fifteen to twelve grams.

    • Re: (Score:3, Interesting)

      by Anonymous Coward

      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?

      There's a clear word; "unemployment"; which means "people who want work but don't have work". That's not easy to measure, but it's not so difficult. However, the measure, w has been gradually changed so that the number published as the "unemployment rate" no longer tells you how much "unemployment" there is. At least some of the changes were done deliberately in order to mislead. This is called "lying".

      An example of this is that long term unemployed people are forced to take training. These people used

      • by Roger W Moore ( 538166 ) on Monday July 24, 2017 @02:32PM (#54869095) Journal

        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.

        • by AmiMoJo ( 196126 )

          It's widely acknowledged in the UK that successive governments have fiddled the numbers by quietly redefining unemployment over the decades. It's the same as inflation - when the government needs to get it down, they redefine it to include things that are not suffering price inflation as much.

          It's also worth noting that the unemployment rate doesn't include people who are under-employed, like people on zero hour contracts or in part time work or forced into self-employment who want full time.

          Sometimes there

      • by Solandri ( 704621 ) on Monday July 24, 2017 @04:10PM (#54869869)

        However, the measure, w has been gradually changed so that the number published as the "unemployment rate" no longer tells you how much "unemployment" there is.

        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.

        • The big question is what you want to measure. The unemployment rate (as conventionally defined) is trying to measure what fraction of people who want jobs can't find them. The author of the cited article is correct that the official unemployment rate is leaving out some people who probably ought to be counted, like people who have given up looking for work. This can be really important, because bad data may cause economists to recommend bad policy. In the USA during the 1990s, for instance, sustained low official unemployment wound up encouraging "hard core" unemployed people who were left out of the official statistics to start looking for work. That meant low unemployment didn't cause inflation to take off the way economists predicted. A different measure of unemployment that made fewer assumptions about who was employable might have prevented them from making that mistake.

          That said, there are problems with the author's proposal of including everyone between 16 and 64 as the pool of potential workers. The economy has changed over time in ways that systematically change who is likely to look for work. Higher education is far more important than it used to be, so that college age people probably shouldn't be looking for full-time work, and 16 to 18 year olds certainly shouldn't be. At the same time, though, there are fewer stay-at-home parents, which increases the expected size of the workforce. That means using the entire 16-64 year old population as the potential workforce will make comparisons to historical data much less useful, which also undermines the value of the data for policy decisions.

          Probably the best solution is to give up on the idea of capturing the state of employment in a single number. The US government, for instance, calculates no fewer than 6 versions of the unemployment rate and a "labor participation rate" that is closer to the kind of calculation the original author wants. One of those rates is the official unemployment rate, but it can be compared against other rates to see if they're changing in sync. A common comparison is between U3 (the official rate) and U6 (which counts part time workers who would like to work full time as unemployed and includes people who have given up looking for work as part of the potential workforce). U3 is what has traditionally been used to measure unemployment, but U6 probably gives a better idea of how much real slack there is in the labor force.

    • by quantaman ( 517394 ) on Monday July 24, 2017 @01:19PM (#54868453)

      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?

      Because the poster has some weird ideology they're trying to push on us.

      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?

      • by 93 Escort Wagon ( 326346 ) on Monday July 24, 2017 @01:44PM (#54868679)

        Because the poster has some weird ideology they're trying to push on us.

        This has something to do with Bitcoin, doesn't it?

      • by Obfuscant ( 592200 ) on Monday July 24, 2017 @01:53PM (#54868791)

        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.

    • by godrik ( 1287354 ) on Monday July 24, 2017 @01:23PM (#54868497)

      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.

      • by 93 Escort Wagon ( 326346 ) on Monday July 24, 2017 @01:59PM (#54868829)

        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.

        To pad this out - from Wikipedia [wikipedia.org]:

        The Bureau of Labor Statistics also calculates six alternate measures of unemployment, U1 through U6, that measure different aspects of unemployment:

        U1: Percentage of labor force unemployed 15 weeks or longer.
        U2: Percentage of labor force who lost jobs or completed temporary work.
        U3: Official unemployment rate per the ILO definition occurs when people are without jobs and they have actively looked for work within the past four weeks.
        U4: U3 + "discouraged workers", or those who have stopped looking for work because current economic conditions make them believe that no work is available for them.
        U5: U4 + other "marginally attached workers", or "loosely attached workers", or those who "would like" and are able to work, but have not looked for work recently.
        U6: U5 + Part-time workers who want to work full-time, but cannot due to economic reasons (underemployment).

      • 42
    • 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.
    • 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?

      Because those assumptions aren't often included when the stats are released to the public. For instance IIRC, our unemployment stats for the U.S. don't include people who are still out of work but have used up all of their unemployment eligibility. So if you have a few million people who are out of work but don't receive unemployment benefits anymore, they aren't reflected in the reports. That certainly presents a rosier picture than reality, especially for those few million people. Politicians can then cla

    • by mikael ( 484 )

      I remember a radio debate back in the 1990's. The lowest you could ever get unemployment was 2.5% of the population, because that was the number of people genuinely in ill health or out of work.

    • It's a lie because (Score:4, Insightful)

      by Okian Warrior ( 537106 ) on Monday July 24, 2017 @01:34PM (#54868609) Homepage Journal

      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 [gallup.com], 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 [gallup.com] 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.

      • by Pete Smoot ( 4289807 ) on Monday July 24, 2017 @02:58PM (#54869325)

        It's a lie because the original definition communicated to voters an indication of how the economy was doing,

        Fer cryin' out loud. Lies, damn lies, and statistics.

        For a statistic to be meaningful, it has to have a crisp definition. If you use the statistic without understanding the definition, you're asking for trouble. For years, "unemployment" has meant "percent of people who want to work but can't find a job." I remember hearing that definition in, oh I dunno, High School, and realizing the economists term "unemployment" doesn't mean what I thought it did. What I thought "unemployment" should be is actually called the labor participation rate (well, 1 - LPR), which is the percent of people of working age (18-65) who have a job.

        Neither number is right or better or truer. They just measure different things. Depending on what you're trying to understand, use the best one for you. Understanding both is probably a good thing. Neither one by itself gives you anything close to "an indication of how the economy was going" just like the DJIA doesn't tell you anything but a tiny sliver either.

    • It really is a misconception rather than a lie. It's not really possible to have a formula to calculate unemployment without some faults. Still, a low unemployment rate implies the economy is probably doing pretty well.

    • It's not a lie. The government measures unemployment in many different ways, and economists are all familiar with the disadvantages of each method. Anyone who has taken a basic economics course knows the different methods. Anyone who has read the Wikipedia page knows the different methods [wikipedia.org] (note to ignoramuses: please be familiar with the information on that page before commenting).

      (Personally though, I have trouble feeling sorry for people who can't even bother to look for a job once a month.)
    • by elrous0 ( 869638 )

      Why is it a lie this time?

      Because if your country has a high percentage of the populace who "have given up looking for work", it doesn't really matter what the official unemployment statistic says. The only number that really matters is the number of people who would work if they could find a job. And the official unemployment stat has fuck-all to do with that number.

    • 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?

      Because the author disagrees with this particular assumption, and "lie" sounds so much sexier than "assumption I don't agree with".

    • It is a lie because these numbers are used to support a false narrative that the economy is getting better under current management. This is the same statistical trick used in the U.S. over the preceding years in order to convince the public that we have recovered from the recession of the housing bubble.

      It is also a lie because the UK has been using similar tricks to pad their crime figures, for instance, in order to support the idea that increasing surveillance and complete emasculation of the population

  • the lie? (Score:4, Insightful)

    by zlives ( 2009072 ) on Monday July 24, 2017 @01:05PM (#54868347)

    "... 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!!

    • Re:the lie? (Score:4, Insightful)

      by Baron_Yam ( 643147 ) on Monday July 24, 2017 @01:12PM (#54868397)

      >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!!

      Except most employment stats (at least the ones governments tout) don't include people who'd really like a full time position but have grabbed a part time job just to keep from losing everything. And when things are in the shitter and the unemployment rate would otherwise be high... people give up and drop out and suddenly the 'unemployment rate' improves. Well... not really.

      On the other hand, the economy changes and guaranteeing everyone their preferred job at the pay they want for however long they want just isn't practical... the job market changes and people have to change with it, so a guy who wants to get top pay for a job that doesn't exist anymore really isn't 'unemployed', he's 'too picky'.

      I don't think its an easy thing to measure honestly (and that may not even be possible without massive error bars), but governments tend to adjust the metrics to make themselves look better and that's why people tend not to trust the reported rate.

      • I think you're right that underemployment is not as easily as accounted for as unemployment, and that actually seems to be more of the thrust of the article. The summary blurb isn't really doing it justice (shocking!) and ends up making the article seem stupid.
      • Except most employment stats (at least the ones governments tout) don't include people who'd really like a full time position but have grabbed a part time job just to keep from losing everything.

        The stat you're looking for is called underemployment, not unemployment.

      • Re:the lie? (Score:5, Insightful)

        by Moof123 ( 1292134 ) on Monday July 24, 2017 @01:29PM (#54868557)

        To have a valuable statistic for unemployment you need to come up with a criteria and stick with it over a useful length of time. Sure some folks are working less than they would like, some folks want unicorns and ponies as well. Should we start counting folks who are full time, but earning less than they think they should as semi-unemployed?

        We've had multiple measures for unemployment to allow nuances, but you still can't just throw out every statistic they does not perfectly meet your own definition, that is telling a lie to yourself.

        More important than the low unemployment rate is the very stagnant wages. Lots of folks have jobs, but the jobs market is lacking exuberance. We've not seen this show up is robust wage growth. Basically it seems that workers are still to fearful/truamatized to demand raises (or job hop to get them), but on the whole the low wage growth in the face of low unemployment does not add up.

        • by zlives ( 2009072 )

          while we are at it, lets discuss, the lack of a cost of living index and what it means to have a living wage...
          in US the CPI fails to include energy and food costs over time. however... it is defined in this way and to call it a lie would still be false.

      • Except most employment stats (at least the ones governments tout) don't include people who'd really like a full time position but have grabbed a part time job just to keep from losing everything.

        It's called U5.

        And when things are in the shitter and the unemployment rate would otherwise be high... people give up and drop out

        It's called U6.

        The government (at least the US, and I assume the UK) provides many unemployment rates to the public. Each one provides information about a particular aspect of unemployment.

        The number that shows up in newspaper headlines is U3. It could be best considered "people looking really hard for work". And thus it provides a decent enough snapshot of unemployment at this particular moment in time. But if you're attempting to look at longer-term trends, the higher "U" numbers become

    • by Kjella ( 173770 )

      "... 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!!

      Well, if the unemployment figure is supposed to show the "true" need for work, one issue is that the statistics generally capture the people looking for work right now. If students stay in school, get discouraged from trying, manage to get a medical disability etc. they disappear from the statistic but if the economy is booming people want to get out and make money now. So if you have 8% unemployment and get work for 5% of them you don't end up with 3% but maybe 5% as the "hidden" unemployed return, how qui

  • Stay at home parents are employed. Why would you count then as unemployed?

    If they were called "nanny" and received an official salary, you would call them employed. But because they are called "mom" or "dad" and simply have access to all the resources (money, food, shelter, etc) of the working spouse you don't want to count them?

    • by omibus ( 116064 )

      That is my question as well. My wife hasn't worked in close to 20 years, and isn't looking to get a job any time soon. My 16 year old kid doesn't have a job, cause they are still in school. Looks like unemployment in my house is 66%. But if you aren't trying to work in the first place...hard to call them unemployed.

      • Indeed. Two completely different statistics.

        How many people want a job and can't get one, is a very different number to how many people don't have a job and aren't looking for one and that's OK.

        Both numbers have their uses at different times and for evaluating different situations; to call one "a lie" is disingenuous.

        I think the current method of defining "unemployement" from the basis of how many people can't find work that want it, is much more useful in most situations.

    • That is my question too. How could a stay-at-home parent be considered unemployed?

    • Or retired, or disabled, or they don't have kids but the wife chooses not to work. There are a lot of reasons why people who are not employed are not unemployed. The assumptions are clearly laid out in the SIX different unemployment rates published by the Dept of Labor. For uses of the data, different assumptions should be made.
    • by green1 ( 322787 )

      That depends.

      In my circle of friends I have 2 contrasting families.

      Family 1: Mom works, Dad stays at home with the 3 kids voluntarily. Nobody considers him unemployed.
      Family 2: Mom is just finishing her maternity leave and going back to a job that's likely about to be gone. Dad hasn't been able to find a job in over a year of looking, and has fallen off the unemployment list, they can't afford child care with Mom's job uncertain, and Dad unemployed, so right now Dad stays home and takes after their 1 kid. E

  • Un(der)employed (Score:4, Insightful)

    by Nidi62 ( 1525137 ) on Monday July 24, 2017 @01:09PM (#54868373)
    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.
    • Re:Un(der)employed (Score:5, Informative)

      by MyNameIsFred ( 543994 ) on Monday July 24, 2017 @01:20PM (#54868463)
      I don't know about the UK, but in the US they measure unemployment using several different metrics. Some of those metrics are designed to capture things like discouraged workers. The US Bureau of Labor Statistics tracks the following metrics labeled U-1 to U-6, but generally the press only talks about U-3:

      U-1 Persons unemployed 15 weeks or longer, as a percent of the civilian labor force
      U-2 Job losers and persons who completed temporary jobs, as a percent of the civilian labor force
      U-3 Total unemployed, as a percent of the civilian labor force (official unemployment rate)
      U-4 Total unemployed plus discouraged workers, as a percent of the civilian labor force plus discouraged workers
      U-5 Total unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force, as a percent of the civilian labor force plus all persons marginally attached to the labor force
      U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons, as a percent of the civilian labor

      I'm not sure that any of these capture your specific point, but the BLS does look at different aspects of the problem.
      • It's better than that: U-4 is typically U-3 plus like 0.1%-0.4%. U-5 counts people who can't get jobs even if jobs are available to them due to their own economic conditions. U-6 is a useless number: it counts underemployment as individuals, and leaves us with no real way to measure underemployment (are they working 5 hours? 25? How many full jobs are available, divided between more than that many people? Is there 1/2, 1/3, or 8/9 of a job available to each of these underemployed?).

        TFS is an outri

    • Maybe we should be looking at employment within the context of the local living wage. Beyond having a job it would be useful to know what proportion of workers are above starvation/serf wages, as it is hard to say the labor market is "healthy" when so many are at or near our crappy minimum wage.

    • This is all true, and I would like to add that these are jobs that are incredibly fragile. Mass layoffs of minimum wage workers are hardly mentioned as is, but with the gig economy hundreds of thousands of hours of work can be taken off the table without so much as a director's meeting.
  • by Anonymous Coward

    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

  • by lazlo ( 15906 ) on Monday July 24, 2017 @01:17PM (#54868429) Homepage

    Just because accepted definitions are widely used, doesn't mean that they're particularly useful. Personally, I'd love to either see employment redefined or a new term coined that includes people who "work at home to look after their family", but that would be a step towards exposing the huge gaping marriage loophole in tax law, and I think everyone is either terrified of that, or has never really considered it.

    • by mikael ( 484 )

      The term for people who work at home to loo after their family" is called "homemaker". Someone who isn't employed and looks after a relative full-time is called a "caregiver".

  • For Reference Only (Score:5, Insightful)

    by Thelasko ( 1196535 ) on Monday July 24, 2017 @01:18PM (#54868445) Journal
    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.
  • by bill_mcgonigle ( 4333 ) * on Monday July 24, 2017 @01:20PM (#54868457) Homepage Journal

    Use the "labor force participation rate" metric, not "unemployment". Unemployment is subject to "definitions", which are political by definition.

    UK looks to be at 79%. It still doesn't account for people who have been bumped down from full-time to part-time to decrease regulatory costs, but it's the best number you'll get from people whose job it is to lie about how great the numbers are.

    • Labor force participation rate is used mostly to lie about unemployment here in the US. People claim that there is no recovery of employment, but rather that labor force participation has decreased.

      Basically, they claim that we still have 10% U-3, and just fewer looking for work. Thing is if you adjust U-3 to the labor force participation rate of our 10% peak, then our 4.7% number becomes 4.9%!

    • As long as the definition does not change that often, or when it changes we know what the effect on the number are, the number in itself is in absolute value useless. What is important is for the same stable definition, whether that numbers rise or drop indicating a fuller or less employment. Frankly 4.6 or 4.5 or 4.7 is about as useless in absolute number than 79, 79.1 or 78.9 to take your measure. BUT knowing that under one political team goal it went from 4 to 8 (or 79 to 75) or the other way around, is
  • And of course the media, in its infinite wisdom, decides when to question the validity of the employment numbers.

    As in most cases you need more than one set of numbers. I think reporting U3 and U6 should be done as a matter of course.
    • U-6 is useless. It includes people who are underemployed, but doesn't tell us about underemployment.

      Say there are 4,000 working hours divided among 100 people in every 2,000. 40 hours per person, full-time employment. Underemployment = 0%.

      Now say there are 3,000 working hours divided among those 100 people. 30 hours per person, full-time. Underemployment = 5%.

      Now let's say they're fighting over 1,000 hours, 10 hours per person. Underemployment = 5%.

      So you have 100 full-time jobs, 75 full-time jo

    • by Megol ( 3135005 )

      My experience is that in general anything complex computed into a single number produces something near useless.

      • Agreed. It's like "averages". Averages are, on average, useful. - ooo. just made that up ;)

        Which is why one needs more than one number. In baseball .400 average only says so much. If you're up to bat 5 times it's ho-hum. If you're batting .400 after 500 at bats - wow.

        After 5000 at bats and you're the best player to ever play the game.
  • by eepok ( 545733 ) on Monday July 24, 2017 @01:24PM (#54868505) Homepage
    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.
    • You also have to filter those people out because most of them aren't working due to no need to work. The ones who are discouraged generally aren't working and are on welfare; the others ... aren't in need of work and don't qualify for welfare.

      U-6 is 8.6% in the US right now. U-3 is 4.4%. U-4 counts those people who "have given up looking for work," and is 4.7%.

      The summary is hilarious: it claims we should count stay-at-home spouses as unemployed. Maybe we should get behind lazy wenches and beat the

  • by Cigaes ( 714444 ) on Monday July 24, 2017 @01:29PM (#54868555) Homepage

    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 cake is a lie. This is merely massaging statistics to get useful information. It's not just economists that do this. Everyone does this. Corporate Execs, Advertisers, Publishers. The entire business world is based on numbers that attempt to predict patterns and show what needs more focus and what doesn't. It doesn't constitute a lie.
  • by known_coward_69 ( 4151743 ) on Monday July 24, 2017 @01:33PM (#54868601)

    Just because 20% of people don't work doesn't mean they are unemployed. Lots of old people in the US who have paid off homes and money coming in and don't have to work. My mom hasn't worked since her mid-50's. My mother in law retired and FIL can retire if he wants to and have lots of income coming in.

    With the younger crowd there are lots of people now who are 3rd or 4th generation Americans and they have trust funds and other money passed on from the older generations they can live on.

    I'm 43 and I can semi-retire if I wanted to, but need to get my kids learned first.

    Easy to retire early. You have to live on the coasts or some high price area. Buy property early in life and don't move around for jobs renting everywhere. The high cost areas will generally see higher RE value growth so once your kids graduate you sell and move to a low cost and low tax area and buy a house with cash you have from selling your previous house in a high cost area. It's kind of like arbitrage.

    Where my mom lives they get lots of California refugees who make bank on their homes in California and buy for less money when they move. In NJ there is a town called Demarest where property taxes can run you $25,000 a year but the schools are some of the best in the USA and the home values go up. Lots of people list their homes for sale right before HS graduation and move to the Carolinas or anywhere else with a huge bag of money they earned for living in Demarest and similar parts of the NYC burbs.

  • In the USA it's done all the time. We have different reports on unemployment. One of these reports generally given out the mass media includes rosier numbers. The US Census has a methodology for counting homeless, but the reports we see talked about do not including the following as unemployed:

    1. Homeless 2. Those who have given up looking (often out of frustration) 3. Underemployed. So numbers can be misleading depending on whose you read. I'm seeing as I type this a post spelling out the U1-6 metris w
  • by enjar ( 249223 ) on Monday July 24, 2017 @01:38PM (#54868641) Homepage

    We hear about "the Dow" as being some majestic heartbeat of the health of the stock market. It's not really that accurate and/or useful, and better metrics exist. It has history, so people latch on to it as some sort of magic number or indicator. In reality, not that great. But still reported on because it's easy and familiar. Unemployment is actually a complex and multivariate metric, too. It can be sliced and diced by region, ethnicity, age, martial status, gender, job seeking status (as well as combinations of such metrics). This is the kind of thing economists and data nerds get into but when people are listening to the news about all the news will report is the top line number, since reporting the complexity will make for a long report most people don't care about. But the metric has been gathered the same way for years, so it's not a "lie" per se -- it's just people don't generally care about the minutae of the underlying data. It would be worse if the metric were redefined on the whims of politics or popular opinion, then it would really be a lie, or just useless. Including retirees or people who aren't actively looking for a job -- students, children, stay at home parents and retirees -- can be very reasonable assumptions since all those people are doing something else that prevents them from entering the workforce, or they have left the workforce entirely with no plans to return.

    Governments should be caring a lot about the minutae of these metric, though, for many reasons. Having high unemployment for young people (especially young men) can have severe consequences for tax revenues, security/unrest/happiness, ability to pay for entitlement programs. Also, young people may leave if they can find work elsewhere, and not come back to help your economy. As retirees live longer they take more financial resources for longer than previous statistical models used for long term budgeting allowed, leading to funding issues for healthcare and drugs.

    Of course, you also have politicians who take good numbers as a sign of their brilliance, and bemoan bad numbers as "a result of the poor statistical design of metrics" or "not representing reality", etc. Success has many fathers, defeat is an orphan.

  • Unemployment as measured today seems like it goes back to a simpler time for the labor force. I know we have U1 through U6, but I think in previous times U1 and U2 modeled the real world better than the higher numbers. Back around the 60s and 70s, the US (and the UK) had a lot more traditional labor cycle. Many more people were employed in the trades or in factories, and the business cycle determined when people were laid off because factories were producing fewer goods, running fewer shifts, etc. If you ha

  • For decades, economists have agreed on an artificial definition of what unemployment means.

    So you're upset they're using their artificial definition, and have been for decades, instead of using your artificial definition?

    • by green1 ( 322787 )

      Maybe he wants a less artificial definition?

      You can say that "unemployment is at 4.5%" but that's not much consolation for all the people who can't put food on the table because they don't have a job (or worse from a statistical perspective are those who have a part time minimum wage job but want, and need, much more). They don't want some gamed number telling them how rosy the world is. They want a job.

      And you can claim that it's fine because that's the number that's always been used, but it isn't fine bec

  • In the developed world, many people now have enough to get by without working or with working far less. This is challenging the fundamentals of capitalism.

    Because more people are able to drop out, cut back, and "survive", the current means of calculating unemployment is producing a number that no longer reflects all of those who would like to work. It disguises the fact that if higher quality and higher paying jobs were available, more would work.

    This is hiding a very real problem. Essentially, the developed world is in the midst of a massive undeclared strike. Many of us in that gap between the 60% employed and 4.5% unemployed would love to work, but the pay being offered for our time has dropped so much that it is simply no longer worth it to justify leaving our family eight hours a day. In going on strike, we've been a huge drag on the GDP, because we've chosen to consume far less than we could in order to make it with little or no job.

    Changing the way the number is reported would highlight the missing potential for growth and benefit all. More people working higher paying jobs produce more spending and higher paying jobs. We've been spiraling down invisibly with the current definition. We need to change it and try spiraling up.

    The definition should be geared to show the percentage who would choose to provide more value to the economy in different work from what they are currently doing or not doing if that work were available.

  • by gurps_npc ( 621217 ) on Monday July 24, 2017 @04:06PM (#54869841) Homepage

    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.

    • In the past, when employers only got one application, they realized they were not offering enough compensation and increased it. This pulled the people on the sidelines (who were never really on the sidelines) into the workforce and expanded the economy. Today, we've entered this weird alternate reality where employers do things like figure out a way to work without a human in the position, kill the project, claim that their aren't enough qualified people in the country get the government to let others in,

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