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Q: Employment vs Unemployment ( No Answer,   9 Comments )
Question  
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
Answer  
There is no answer at this time.

Comments  
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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