Are official Unemployment Rates a lie?

Originally posted by utherpendragon
hmmm... out of work?

Nope. Well, not a sufficient condition at least.

Originally posted by Palynka
Yes, they are.

But you just don't know what unemployed means. Simple.

NO MONEY NO HONEY

Originally posted by KazetNagorra
They have that category and they call it "the unemployed".

No, unemployed are those who have not 'given up' on finding a job. They are not rich. They do not choose to stay at home because they want to. They simply quit looking although they still want jobs. These people are not taken into consideration in unemployment numbers.

Hey, let's count children too! I mean they don't have jobs either. Basically, some people here want to call the unemployment rate (#of people not working)/(total population). Sure. We can calculate that, but it doesn't give us a good sense of how "tight" the labor market is.

Plus that measure suffers from some fundamental problems like baby booms would cause a secular U-shape in the measure. High when the cohort is young, low when the cohort is working age, and high again when the cohort reaches retirement.

Anyway, MB should use whatever measure he likes, but (and here's where he gets messed up) he should actually know what he is measuring and the issues that come with it.

Originally posted by telerion
Hey, let's count children too! I mean they don't have jobs either. Basically, some people here want to call the unemployment rate (#of people not working)/(total population). Sure. We can calculate that, but it doesn't give us a good sense of how "tight" the labor market is.

Plus that measure suffers from some fundamental problems like baby booms w ...[text shortened]... messed up) he should actually know what he is measuring and the issues that come with it.

I wanted to find out more about it. Why do you think I created this thread?

I can always count on you to give me the other side of the argument.

How do you feel about the U6 unemployment rate?

the press should be reporting the U17 rate, especially in their headlines.

Originally posted by zeeblebot
the press should be reporting the U17 rate, especially in their headlines.

They should include those who have 'fallen out' of the labor force due to being unemployed for too long.

Originally posted by Metal Brain
Paul Craig Roberts claims our government lies about the unemployment numbers.

http://www.rense.com/general92/liec.htm

Is he right?
If so what other economic numbers is our government lying about?

Offical unemployment rates have been in error for a long time. They don't take into account those who have stopped looking for jobs, and other factors. The real unemployment number is much higher. Lawmakes don't seem to be in any hurry to change this however. As far as other economic numbers our government may be lying about...I don't want to think about it!

Originally posted by bill718
Offical unemployment rates have been in error for a long time. They don't take into account those who have stopped looking for jobs, and other factors. The real unemployment number is much higher. Lawmakes don't seem to be in any hurry to change this however. As far as other economic numbers our government may be lying about...I don't want to think about it!

But they're not lying about it. No one is lying about it, the definition of unemployment figures is clear. No one ever tried to hide that people who stopped looking for work are not in the unemployment statistics. They also are not in error, the only person who might have been in error is you by assuming the reported unemployment figure was anything other than what is defined as. You want the numbers to account for people who have stopped looking for work ? Look up the labour force participation rate, it's still not perfect as it won't tell you why people aren't looking for work, but then again that's rather hard to measure anyway.

I also find it funny how people are acting as if it is a big conspiracy to paint a rosy picture of the real economic situation. The unemployment figures are measured the same way no matter the economic climate. If a measure would exist that accounted for people who want to work but stopped looking anyway, we'd just be used to an unemployment figure that is permanently a couple of percentage points higher than it is now.

Originally posted by bill718
Offical unemployment rates have been in error for a long time. They don't take into account those who have stopped looking for jobs, and other factors. The real unemployment number is much higher. Lawmakes don't seem to be in any hurry to change this however. As far as other economic numbers our government may be lying about...I don't want to think about it!

Are you turning conservative on us? I mean, the government lying and not wanting to take accountability? Can this be? 😲

Originally posted by Barts
But they're not lying about it. No one is lying about it, the definition of unemployment figures is clear. No one ever tried to hide that people who stopped looking for work are not in the unemployment statistics. They also are not in error, the only person who might have been in error is you by assuming the reported unemployment figure was anything other than ...[text shortened]... employment figure that is permanently a couple of percentage points higher than it is now.

I don't recall acting as if there is a big conspiracy. I simply disagree with the way the unemployment rate is calculated. Calm down now...try some deep breathing! 😏

Originally posted by bill718
I don't recall acting as if there is a big conspiracy. I simply disagree with the way the unemployment rate is calculated. Calm down now...try some deep breathing! 😏

Please, allow me some hyperbole. While you are not the worst person on this thread (I think that would be the OP) you do seem to be saying that unemployment figure are deliberately in error. I'd say that's at least a step further than 'I believe the terminology is unnecessarily confusing'

Originally posted by Barts
Please, allow me some hyperbole. While you are not the worst person on this thread (I think that would be the OP) you do seem to be saying that unemployment figure are deliberately in error. I'd say that's at least a step further than 'I believe the terminology is unnecessarily confusing'

Perhaps I'm nit picking here, but I think the unemployment rate should be an accurate indicator of how many people are really out of work. Since the offical unemployment rate does not seem to do this, I don't look upon it as accurate. But hey....what do I know? 😉

Originally posted by bill718
Perhaps I'm nit picking here, but I think the unemployment rate should be an accurate indicator of how many people are really out of work. Since the offical unemployment rate does not seem to do this, I don't look upon it as accurate. But hey....what do I know? 😉

The employment rate or labour participation rate that you are referencing here is important, but it does not tell you much about how tight the labour market is, as someone mentioned before. The employment rate is particularly heavily influenced by female emancipation since a large part of the working age population that is not employed tends to be housewives - see for example these figures: (note that some figures are for 2003 however)

http://en.wikipedia.org/wiki/List_of_countries_by_employment_rate

Originally posted by Metal Brain
I wanted to find out more about it. Why do you think I created this thread?

I can always count on you to give me the other side of the argument.

How do you feel about the U6 unemployment rate?

Well, that's fair I suppose.

Look. I don't favor one measure over another. U-6 is an extremely broad measure. It includes within the "marginally attached" category people who have looked for work in the past 12 months and who want to work and are ready for a job but choose not to look for now but not for a job-market related reason (those would be 'discouraged' worker).

I mean who are those people?

Nevertheless, U-6 is useful. I like that U-6 has part-timer's who can't find full time work, but I would like a measure with U-6 minus the strange group described above (maybe somebody can think of one of these people and get me to change my mind).

In no way though should we discard U-3. We want to distinguish a world with lots of part-time workers looking for full time from a world with the same number of completely unemployed looking for anything.