Who should be counted as unemployed?

Discussion in 'Economy' started by pinqy, Dec 7, 2011.

  1. pinqy
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    pinqy Gold Member

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    Every month the Employment and Unemployment numbers are released, and every month people say the government is doing it wrong. Some of those complaining don't actually understand how the government calculated employment and unemployment and think only people who collect checks are counted as unemployed (never been true in the US).

    But there is some legitimate debate on who should and should not be classified as what.

    So, quick review of the concepts. The goal is to look at the Labor Market....how easy/difficult it is to find/keep a job. But some people either cannot work or face strong barriers of entry/exit. So first we exclude those people from the population...we only want tha population that could theoretically work and face no Legal barriers/restrictions.

    The survey used is based on a reference week...the week that contains the 12th of the month. Everything refers to status during that week.

    Adult-Civilian Non-Institutional Population. Exlcudes everyone under 16, everyone in prison, everyone in a mental institute or other long term health care, and everyone in the military (they were included from 1984 to 1994, but they just artificially deflated the UE rate).

    Employed: Some people work very few hours by choice. When I was in college I worked 3 hours a week and that's all I wanted. It's just too subjective to have minimum hours so employed are those who worked at least 1 hour for pay or 15+ hours unpaid in a family business or farm. If you didn't work because of vacation or temporary illness/injury, you're still employed.

    Unemployed: In essence, people trying to work. We don't want to count people who don't want a job as unemployed and the only objective way to know if someone wants a job is to look at what they're doing. Unemployed didn't work but actively looked for work in the previous 4 weeks. People on temp layoff expecting to return don't have to be looking.

    Together the Employed and Unemployed are called The Labor Force: those who are objectively and definitely available to work. Unemployed as a percent of the Labor Force is the Unemployment rate.

    Not in the Labor Force: Everyone else in the population who are neitther working nor trying to work. Mostly the old, the young, and the disabled.

    There are sub-categories of each that are used in alternative measures, but I'm sure someone will bring them up.

    To discuss: what's wrong or right with the definitions as I've stated?
     
  2. Paulie
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    Paulie Platinum Member

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    It's like any other broad statistic the government uses. Vague and skewed. It's like CPI. If CPI shows a low number, then we can't possibly have inflation, even though it costs more to pay for food and energy these days, which can break the backs of the struggling middle class. My dollar does not go as far as it did 5 years ago.

    There's nothing really WRONG necessarily with these stats, until they're used for spin.
     
  3. samjones
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    samjones Member

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    What I would say is wrong with your definitions is that they've already been defined by the BLS. The BLS has 6 different measures of unemployment and they're painfully transparent about how they interpret them, even going so far as to provide examples of phone calls and how they might interpret a person's employment status based on the answers.

    I'd be more interested in hearing what you have to say if you were to refer to a specific BLS measure and why you think it's inadequate. You seem to be reinventing the wheel.
     
  4. pinqy
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    pinqy Gold Member

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    Ummm, yes, I was citing the BLS definitions. People often criticize the BLS defininitions so I was presenting what they actually are and inviting people to give their criticisms of them.

    Not quite. BLS has 6 "alternative measures of labor underutilization." They don't like to call them all "unemployment" measures because the U1 and U2 are incomplete measures of unemployment, the U4, U5 and U6 include people who are not unemployed and the U6 also contains people who are employed.

    But I don't think they're inadequate. I think they're fine.
     
  5. samjones
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    samjones Member

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    Maybe you should try map your definitions to the BLS definitions and explain what you hope to accomplish with your definitions.
     
  6. pinqy
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    pinqy Gold Member

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    I was giving the BLS definitions, they're not "mine."
     
  7. samjones
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    samjones Member

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    I give them a thumbs up.
     
  8. pinqy
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    pinqy Gold Member

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    So why am I not surpised that none of the people who try to claim the UE rate comes from benefits and none of the people who blather about "real unemployment" and none of the people who say "the governtment lies" have posted in this thread.
     

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