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Subject:
Employment vs Unemployment
Category: Business and Money > Economics Asked by: 427cobra-ga List Price: $2.00 |
Posted:
08 Apr 2005 09:06 PDT
Expires: 08 May 2005 09:06 PDT Question ID: 506773 |
How can employment increase at the same time unemployment is also increasing |
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There is no answer at this time. |
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Subject:
Re: Employment vs Unemployment
From: indexturret-ga on 08 Apr 2005 09:16 PDT |
The confusion comes from the fact that people (even people who should know better) throw around both absolute numbers and percentages, and meanwhile, the population keeps growing in the background. Over time, the economy must constantly create a higher number of jobs in order to keep the unemployment rate steady, because there are more people joining the workforce. If jobs are created, but not a high enough number of jobs per month, then employment is rising (in absolute numbers) but unemployment is also rising (in percentage of the population). IndexTurret |
Subject:
Re: Employment vs Unemployment
From: indexturret-ga on 08 Apr 2005 09:20 PDT |
Politicians intentionally muddy the waters of economic math by picking and choosing whether to speak in absolute numbers or in percentages---whatever makes them look better this week in the "golly gee pa, that's a big number, I guess I should be impressed" department. |
Subject:
Re: Employment vs Unemployment
From: markj-ga on 08 Apr 2005 09:48 PDT |
I believe that higher unemployment (in absolute terms) can coexist with high employment (in absolute terms). Say a month (or other period) starts with 1,000,000 people employed and 50,000 people out of work. During the month, 2,000 people leave the workforce (die or retire), but 10,000 people enter the workforce for the first time (i.e., they are looking for work), and 3,000 of them find jobs. None of last month's 50,000 unemployed find work during the month. At the end of the month, there are 1,001,000 people employed and 57,000 people are out of a job. In other words, the number of unemployed can rise just because new people are entering the workforce but have not not found jobs. (I'm sure someone will correct me if my logic or arithmetic is faulty.) |
Subject:
Re: Employment vs Unemployment
From: markj-ga on 08 Apr 2005 09:49 PDT |
Sorry, the first sentence in my previous comment should read: I believe that higher unemployment (in absolute terms) can coexist with higher employment (in absolute terms). |
Subject:
Re: Employment vs Unemployment
From: indexturret-ga on 08 Apr 2005 11:08 PDT |
>I believe that higher unemployment (in absolute terms) can coexist >with higher employment (in absolute terms). Thanks markj, you are absolutely right. They can both rise simultaneously in absolute terms as long as the population is growing (which in USA it always has been). Meanwhile, they cannot both rise simultaneously in percentage terms, regardless of population growth---which is the common sense behind 427cobra's question. Someone tell the Congress and the White House to keep this straight! IndexTurret |
Subject:
Re: Employment vs Unemployment
From: myoarin-ga on 08 Apr 2005 13:56 PDT |
What did Churchill say: "I don't trust any statistic that I didn't falsify myself." All the examples can be correct. One can measure changes in unemployment and new employment as a change compared with the previous month or the previous year, and relative to the figure on the month to month basis for the month a year ago. For example, before a November election, when the September to October unemployment figures month to month are available - and there is usually a seasonal decline - because this year's figures m-to-m did not decline as much as in the previous year, you can brag about about that, while on a year to year basis, absolute unemployment has increased. But how is unemployment measured? Do you just count the persons registered as seeking employment or receiving benefits? In a long downturn, people give up and fall out of such a statistic. But if you are in the opposition, you make an adjustment to include them in your negative sounding statistic, and also make a similar - who knows how - calculation to include youngsters coming into the workforce who are not immediately registered as unemployed. On the other side, there are statistics about the number persons who have been newly hired, but these may be transfers, but you can brag about the number, forgetting that they were employed somewhere else before, or/and forgetting that somewhere else there is a statistic about the number of companies that have reduced personnel. I doubt that that covers all the possible variations, but it helps explain how one can hear and read conflict reports that say that "employment increase at the same time unemployment is also increasing." They don't come from the say source. or the discussion of the number of people entering the work force |
Subject:
Re: Employment vs Unemployment
From: omnivorous-ga on 08 Apr 2005 14:18 PDT |
427cobra -- This is actually tougher to answer than you might imagine: unemployment in the U.S. is measured statistically via surveys of "who's actively looking for a job." It excludes unemployed who are discouraged from looking or even those between jobs who are taking a vacation or sabbatical. It also doesn't include "underemployed" who are working part-time because of the inability to find employment. European measures are done differently. You might want to start with a question asking "how is unemployment measured" -- citing the specific country that you wish to deal with. Best regards, Omnivorous-GA |
Subject:
Re: Employment vs Unemployment
From: markj-ga on 08 Apr 2005 14:20 PDT |
Re indexturret's comment, I think that the workforce, not the population, needs to be growing in order to create the possibility that both the (absolute) employment and unemployment numbers can grow at the same time. For example, during a period when A rise in the Social Security retirement age is being phased in, the workforce might be expected to grow at a faster rate that the population, or even to grow while the population is declining. |
Subject:
Re: Employment vs Unemployment
From: omnivorous-ga on 08 Apr 2005 14:59 PDT |
Markj -- The population -- particularly the work-age (non-child) population -- can be growing more rapidly than employment growth. Though this hasn't been a major concern of most industrialized nations due to low population growth, it was a major concern of the Republic of Ireland during the 1980s and 1990s and led to an aggressive development policy aimed at employing the large numbers of young people who would be comiing into the workforce. Best regards, Omnivorous-GA |
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