Asymmetrical Information

IIRC, Sweden also pays a stipend plus tuition to students for as long as they are going to college, and some are staying "students" forever to avoid that horrendous job market. In 30 years, they'll have a number of middle-aged individuals that on paper are overqualified for every job, including "rocket scientist", but have never actually worked at anything.

This is stupid. The nunber of the unemployed is equal to the number of people who are unemployed, if you start thinking about tax vs. income.

Humans like me doen't make the cut, even though we pay taxes. Jane misses the point.

Terribly sorry, technical issues made me be stupid. I repudiate the first point, but not the second.

I really wanted a job as a master buggy whip fabricator. Alas master buggy whip fabricator positions are in short supply. I'm so depressed that I had to settle for doing electrical work which is plentiful.

PA, you need to reference the first article I ever read in the Wall Street Journal, circa 1970. Some upstart company had just revolutionized the buggy whip industry thru the introduction of fiberglass and nylon. They grabbed most of the market and put several competitors out of business. I'm afraid it's too late for you.

The fact of the matter is that there is no census on employment and unemployment. Each state takes an estimate and passes it along to BLS and they 'fuzz it' and use their established formulas and distributions (generally equal) and pass the number back to the states. There are mounds and mounds of error built in. In the aggregate, it is supposed to work itself out (sum of errors), but for the smaller areas (census track and county) they can be down right bad numbers.

As I understand it, the state labor departments report their numbers of people who draw *unemployment insurance,* which is vastly different than the unemployed.

What the lefties forget to include in the uncounted is people who love NOT to work and like government support better, who only work as much as the government forces them to. Also, seasonal workers who earn a lot of money during the season (construction trades e.g.) draw UI in the off season but aren't really unemployed. Self employed and small business people aren't excluded from the "long term unemployed" count.

It's complicated. The major point being, there's a tight labor market, there's great opportunities for whatever a person wants to pursue, and there's no external excuse not to succeed and advance in today's opportunity structure. The only obstacles are interior, such as believing the economy sucks and there are no good jobs any more. That's a bunch of crap.

Is this too simple, or is the only really important consideration that unemployment be counted the same way every time so one can see if it is going up or down? That way it's unnecessary to come up with a cosmically unchallengeable definition in order to get some use out of the statistic. Now what can or should be done by government because of such a statistic is a completely different topic.

Is this too simple, or is the only really important consideration that unemployment be counted the same way every time so one can see if it is going up or down?

It's too simple, because sometimes there are large secular trends that affect things. If you count full-time students as unemployed, then if the number of years of education increases in society as a whole, so does unemployment, though that doesn't seem meaningful. If you count retirees as unemployed, then longer retirements mean a higher unemployment right. (These two things are why the long term trend for "percentage of adult men in the workforce has been decreasing.") If you count housewives as unemployed, then changing societal attitudes and increasing likelihood of women working decrease unemployment.

At the same time, there are problems with not counting all of those things. If students don't count, then in a poor labor market when students go back to school rather than look for jobs, unemployment will be "hidden." Same thing about "voluntary" early retirement. Or women who would take jobs outside the home if they were available with the right location and salary. Or part-timers who would rather work full-time.

The biggest problem is that society can fundamentally change over time, so you start becoming unable to compare unemployment rates from different times.

I am a security guard. When they fire all the college students and hire former engineers to work as security guards because they are more reliable then the kids and their unemployment has run out, then I know we have high unemployment.

Why don't they spend more time refining an employment rate? Until we can mindread the unemployed to determine the true reason for their status, it is impossible to know how to categorize them.

That said, why is there even a debate on whether a housewife/husband is employed or not? They may be a productive member of society, but by definition they aren't employed or looking for work.

I hate seeing the term 'discouraged'. Either you are looking for work, or you are not.

Actually, there is a census of employment (however not of unemployment) called the Quarterly Census of Employment and Wages or QCEW. The Bureau of Labor Statistics collects the unemployment insurance ROLLS. This includes all employees covered by unemployment insurance, not just drawing UI. In fact if you are drawing UI you are not employed. State law decides who is required to be covered by UI, so there is some discrepancy between states but they are similar for the most part. Uncovered jobs are mostly agriculture. This census is an establishment count of employment, meaning it asks the employers, "How many people do you have working for you?" Self-employed incorporated workers are covered, but not self-employed unincorporated or household workers. The sample for the payroll employment number is drawn from this census.

The QCEW has nothing to do with the unemployment rate. To calculate the unemployment rate, the BLS goes out and surveys individual persons, not establishments. The survery from which the unemployment rate is calcuated is called the Current Population Survey and is conducted for the BLS by the Census Bureau which has expertise in surveying households. The CPS asks an individual a series of OBJECTIVE questions to determine which group they fall in. The homepage for this program can be found here: http://www.bls.gov/cps/home.htm

for more information look at "How the government calculates unemployment" here http://www.bls.gov/cps/cps_htgm.htm

The answer is, "what's the question?" As stated so well by the authors of an OECD paper on labor force participation, (jergen Elmeskov & Karl Pichelmann, 'Interpreting Unemployment: The Role of Labor Force Participation.' OECD Economic Studies Number 21, Winter 1993. http://www.oecd.org/dataoecd/43/19/33826311.pdf)

"The appropriate measure of unemployment is . . . likely to depend on the purpose at hand. Unemployment may be used as an indicator of inflationary pressures in the labour market, as a guage of social hardship or as a measure of under-utilisation of labour. It is, however, not necessarily the same set or the same number of persons that are of interest in each of these cases."

Unemployment is not a thing in itself. It is an indicator of something else. If one is unemployed by uncoerced choice, then one is presumably happy. Society may be the loser because the lout is taking more than he is giving. The poet who cannot make a 'decent' living at his profession and must settle for writing advertising jingles may be unhappy, but society is arguably happy that someone is being paid to help move merchandise off the shelves so that other workers can keep their jobs by producing more of what the jingle is selling.

Re: labor force participation. Our state demographer says that it's a "problem" that too many Kentucky women would rather stay at home moms than working moms. KY's labor force participation by women is too low.

I don't think this is a problem if that's what they prefer for their family. More power to 'em.

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