4.2% Unemployment

Max Sawicky sawicky at epinet.org
Thu Jun 17 07:44:32 PDT 1999



>>
While the lower unemployment rate and the greater proportion of the working age population employed in the US than in Europe is well recognized, Martin Wolf noted in yesterday's Financial Times that total factor productivity in the 1990s has also risen faster in the US at 1.1% year, than in the Euro zone, at .7% per cent.

Any comments on what total factor productivity measures, its significance, its seemingly low level in both the US and the Euro zone? . . . >>

I don't follow the productivity stuff closely, but my mates here tell me and the world that in this and other measures, the EU has compared favorably with the U.S. Methinks the development you note is relatively recent, so it wouldn't do to make too much of it.

The unemployment rate is the big exception, though in this case the gaps are less than implied by official figures, owing to different underlying definitions and other factors that distort superficial comparisons.

A key point about Germany is that of the gross gap between West and East. Germany's overall stats mask what I would call a development problem (i.e., integrating with the East), not a problem of the formerly West German, traditionally capitalist economy.

mbs



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