[lbo-talk] Question: Source of High European/Relatively Low US Unemployment

Doug Henwood dhenwood at panix.com
Wed Mar 9 06:54:49 PST 2005


Bill Bartlett wrote:


>Getting back to the statistics though, there's a couple of things
>you have to be cautious about. Firstly, the way most (all?) OECD
>countries measure unemployment these days is pretty suss. The
>surveys ask people if they have worked an hour or more in the last
>month (including unpaid work in a family business as I recall it.)
>if you answer yes, you are counted as employed. You are also not
>counted as unemployed if you haven't actually looked for work. Its
>rigged to minimise official unemployment, in other words.
>
>The result is that, in places with a welfare system, an anomalous
>situation is often created where there are more people on the dole
>than there are officially unemployed. It isn't that easy to get the
>dole, so obviously the unemployment statistics are dodgey.
>
>So you have to keep in mind when comparing unemployment statistics
>between backward places like the US and modern welfare states, that
>the unemployed in welfare states are actively forced to look for
>work to retain eligibility for their welfare. So, even if they have
>less than a snowball's chance in hell of actually getting a job,
>they are required to go through the motions. They are very unlikely
>to answer "no" to the question put by someone from the government
>who comes around asking if they have looked for work in the last
>month.
>
>So they will be counted as unemployed.

1) The unemployment stats I cited are computed according to the same definitions, so they are comparable.

2) To avoid problems with defining unemployment, it's better to use the employment/population ratio to compare labor intensity across countries. EPRs in most of continental Europe are low; they're higher in the "liberal" countries like the US and UK; and higher still in Sweden.

Doug



More information about the lbo-talk mailing list