August 07, 2003
Political Implications of Statistics
National sentiment depends not only on the state of society but on people’s perceptions of this state. A troubling piece by PBS NewsHour economics reporter Paul Solman hints that the unemployment rate (already a statistical construct to begin with; notice the seasonal and retroactive adjustments) may seriously underestimate the true level of joblessness. He says:
2.2 million more Americans are getting disability than in 1982. Like discouraged workers, they’re also out of the workforce. If they weren’t, David Autor (PDF )thinks disability alone would add considerably to today’s unemployment rate. And then there’s prison. In 1982, about ˝ million Americans were behind bars. Today, the number is above 2 million… So, not only do the incarcerated make today’s unemployment rate for men seem lower than it should be because so many more of them are behind bars, they may suppress the rate for years to come by becoming disproportionately discouraged workers once they re-enter society.
That then ends the list of adjustments. Add them all up, and today’s 6.4 percent official unemployment rate approaches 1982’s 10.8 percent record, at least for men. There’s one last way to confirm this. Back in 1982, the percent of total working age men not employed for whatever reason– discouraged, disabled, jailed, retired early, or officially out of work– was 17.3 percent. But as of last month, that total was even higher: 17.8 percent not employed, which makes the current job bust, at least for men, look far deeper than the official unemployment rate suggests.
The implications are unsettling. First, the unemployment rate number (often quoted in mainstream publications) is easy to understand, and a lowballed number naturally favors the incumbent. Second, it damages the political decision-making process. For example, it causes political leaders to have different spending priorities and to support spending on "voluntary projects" (e.g., foreign wars) which a nation can ill afford. Third, it raises the question of whether convicted felons deserve to be disenfranchised. If an increasing percentage of our society are to be regarded as criminals (and looking at RIAA-backed proposals, it now seems that music sharing merits prison time and possibly even a felony conviction), then I have to wonder whether a democracy that disenfranchizes a substantial portion of its citizenry can in fact be responsive to social problems. (Never mind that our political system has already proven its responsiveness to the sad plights of Halliburton, Enron and US steelmakers).
Posted by rjnagle at August 7, 2003 10:24 AMThis is an excellent post. You illuminate one of the most prolific deciets in the US.
Posted by: Robbie D at August 7, 2003 03:02 PMA lightbulb suddenly went on above my head! Could the RIAA be Bush’s latest bedfellow, cooking up a plan to benefit both? Bush allows the RIAA to go hard after downloaders, even throwing many of them in jail for downloading, which serves to protect the RIAA’s copyright interests. But at the same time, it helps keep the unemployment numbers down so the economy looks better! Hmmm….
Posted by: blipsman at August 7, 2003 05:55 PMBy its very definition, the unemployment rate was only intended to calculate what fraction of the workforce was looking for a job and didn’t have one. The total rate of joblessness (fraction of the population who is not employed) is an entirely different statistic, but its not clear how useful it is, because it would include people who have no interest in having a job. If you want to look at the labor conditions in the United States, is it important to look at stay at home moms/dads? What about people who are retired? People in school?
Discouraged workers are important to the labor market situation, but I can imagine numerous difficulties in calculating that statistic.
The unemployment rate doesn’t tell 100% of the economic picture (no statistic ever does), and it needs to be put in context, but it is very useful as a measure of economic health, and it serves its purpose.
Posted by: Locke at August 10, 2003 02:28 AMIt is difficult to compare the unemployment rate with any from reporting from the past. In the past, the rate was related to full time 40 per hour a week jobs. Today, temporary, casual labor, contract, leased and part-time jobs are counted in the mix. Even a person making only $100 a month is considered employed. Even someone who is working on their family’s farm or in their family’s business at no pay while looking for work is considered employed.
In addition, in the past statistics could be taken from the unemployment insurance offices but now only about 40& of all workers qualify for unemployment insurances. Even the Bureau of Labor Statistics says they can not rely on the unemployment offices for statistics because of this.
Last year, the BLS also finally admitted that there are millions who are not part of any reports and are missing in action as far as the labor pool is considered. The BLS put this number at 4 million workers but it is most likely much higher since the U.S.A has suffered the most massive dislocation of jobs in its history perhaps even including the Great Depression. Today many have drifted into a silent depression and the media does not report this scenario. For example, one third over 55 who lose their jobs never found another one.
Tapart Real News and Art that Talks demonstrates how the unemployment data is gathered at http://yestapart.bizland.com/tapartnews/ All should study this for the sake of survival.
Globalism and Free Trade have been the cause for most of this and Tapart News covers a ten year history of their failures.
See also a top newspaper story titled Power to the People art featuring the American Dream is Burning art by Ray Tapajna at http://tapnewstory.filetap.com His art gallery is at http://www.absolutearts.com/portfolios/a/arklineart
