Unemployment numbers

[Just thinking]

The new unemployment numbers came out recently for November of this year (2008) at 6.7%. But is that the real unemployment? ... is that a good picture of what's out there overall? It turns out that this number is classified as U3 in government statistics. There are other numbers you may not be aware of, such as U5 or U6. Here is a better picture of total unemployment ... it may shock you as to how many of us are not fully employed.

 

[lionking]

In Australia anyone employed for one hour or more, is classified as employed. you are correct about the hidden unemployed.

 

[fishbob]

The new unemployment numbers came out recently for November of this year (2008) at 6.7%. But is that the real unemployment? ... is that a good picture of what's out there overall? It turns out that this number is classified as U3 in government statistics. There are other numbers you may not be aware of, such as U5 or U6. Here is a better picture of total unemployment ... it may shock you as to how many of us are not fully employed.

You mean that the media and the government have been less than completely honest with us when they report unemployment numbers???

I shocked - shocked, I tell you.

 

[rjh01]

Please know the difference between unemployment and underemployment.

 

[lionking]

Underemployment is not working as many hours as you wish. Or is there a trick to your question?

 

[lionking]

I should add that anything less than 10 hours a week should not be counted as "employment" for statistical purposes. And this is not a slight on those who choose to work hours like this. It just distorts the whole unemployment debate.

 

[Francesca R]

Official statitics also miss out the informal sector ("black/grey market") and unpaid work such as voluntary childcare. Where's the news here?

GDP is reported too low everwhere . . .

 

[Zep]

I think they should calculate employment/unemployment rates by different, more realistic measures. Instead of trying to make casuals and part-timers fit one category or the other as described by lionking (which is so 1950's thinking in Australia...thanks, Johnny Howard!).

For example, "unemployment rate" could be defined as "the ratio over a period of time of available work-hours not being used versus available work-hours in use." The "available work-hours not being used" would take into account part-time people who are out of work just as much as full-time people. It could exclude people who are simply not available to work, and could be used as a criteria for determining a person's work availability. The obvious intention is to try to make the ratio as close to 1 as possible.

For example, if I retire, I may wish to keep working but at a reduced level. So I could be available to work 10 hours per week rather than the ridiculous hours I do now. If I'm in work, those 10 hours count towards "available work-hours in use". If not employed, they contribute towards "available work-hours not being used". If I then decide I don't wish to be employed at all, I can make my available work hours zero, thus not contributing to the ratio calculation at all. Although perhaps my work benefits would be reassessed appropriately too.

 

[rjh01]

Underemployment is not working as many hours as you wish. Or is there a trick to your question?

A situation in which workers are overqualified for their jobs or work fewer hours than they prefer.

define:Underemployment

In short a person can be underemployed yet still be working full time. Or working 30 hours a week (maybe in two part time jobs).

No tricks. Just did not want anyone to think that the two terms were the same as implied in earlier posts.

Edit. If you want to talk about underemployment you can do so with some more facts (at least about Australia. Do the USA have similar facts?) Read the pdf document.
http://www.abs.gov.au/AUSSTATS/[email protected]/DetailsPage/6265.0Sep 2005?OpenDocument
Sorry if the figures are a bit old.

 

[Francesca R]

Financial markets have a rather direct incentive to estimate economic numbers correctly. Whatever the "true" unemployment rate is, I strongly suspect it is consistent with today's level of bond yields (which are of course staggeringly low). Same for the inflation rate.

 

[eeyore1954]

The number of "unemployed" people who are working off the books would also have to be factored in to give a true number. That would offset some of the rise used in the other figures. Where I am there is a large underground employment community (unfortunately a good number of them are collecting unemployment also)
Not that I don't understand their predicament . You cannot feed your family heat your home and pay your rent mortgage etc on unemploement checks.

Also many part time workers are that way by choice

 

[Just thinking]

Please know the difference between unemployment and underemployment.

Of course there's a difference, and I did not intend to deceive ... but many times we hear it talked of that an unemployment rate (U3) somewhere around 4.5% relates to full employment, and that (after looking at the whole picture) can't be correct. For one thing, those that have been chronically unemployed may no longer be "actively" looking ... and statisticians then no longer consider them in the work force. Well, that may be technically true, but they are still every bit as unemployed as they guy who got laid-off just last week. Then there are those that have to settle for less hours (I was in that position more than once myself). Many times it may not qualify you to collect any unemployment insurance ... so it isn't counted, but it sure is a hit on the economy as well as the individual. Plus ... let's look at the guy with two part time jobs, together he can get by with both salaries. Then, out of the blue, he gets let go from one ... does this now count? What if the split was 25 hrs for one and 15 for the other, and the 25 hr job was the one he lost?

Anyway, the issue is that there's much more to unemployment/underemployment than most folks may be aware of, and that was my point.

Oh ... and one more thing ... the U6 number given in my link was for October of this year. The latest figures for November have revised it up to 12.5%.