Doug suggests that my initial supposition is not right and that this makes irrelevant the question of how to explain the correlation that isn't there. But isn't it there? It isn't as dramatic as I thought, but in 2003 the US was two full percentage points below Europe in unemploymenrt, or to put it another way, 25% lower. That's way outside two standard deviations. Now, the phenomenon of high unemployment in low wage EU countries suggests that the Standard Economic Explanation of the difference isn't right (by itself), but there is still omething here to be explained.
--- Doug Henwood <dhenwood at panix.com> wrote:
> andie nachgeborenen wrote:
>
> >But here I am puzzled again -- don't European
> >unemployment figures include mainly those who want
> >work and can't find it?
>
> So do U.S. stats.
>
> The OECD and BLS produce standardized unemployment
> rates, according
> to similar definitions. For 2003, according to the
> OECD, U.S.
> unemployment was 6.0%, the EU-15 was 8.0% - and
> Sweden's, 5.6%.
> Employment/pop ratios were 65.6%, 56.1%, and 72.6%,
> respectively.
> Spain, a low-wage country, had an EPR of 48.7%, and
> Germany, a very
> high-wage country, 58.7%. So, it's hard to argue
> from these stats
> that social democracy causes unemployment, or that
> low wages
> encourage employment. It's all a lot more
> complicated than that
> simple story.
>
> Doug
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