Abbott and Costello explain Unemployment Numbers

[Gavin Allan]

Abbott and Costello explain Unemployment Numbers:



COSTELLO: I want to talk about the unemployment rate in America.



ABBOTT: Good Subject. Terrible Times. It's 9%.



COSTELLO: That many people are out of work?



ABBOTT: No, that's 16%.



COSTELLO: You just said 9%.



ABBOTT: 9% Unemployed.



COSTELLO: Right 9% out of work.



ABBOTT: No, that's 16%.



COSTELLO: Okay, so it's 16% unemployed.



ABBOTT: No, that's 9%...



COSTELLO: WAIT A MINUTE. Is it 9% or 16%?



ABBOTT: 9% are unemployed. 16% are out of work.



COSTELLO: IF you are out of work you are unemployed.



ABBOTT: No, you can't count the "Out of Work" as the unemployed. You have to look for work to be unemployed.



COSTELLO: BUT THEY ARE OUT OF WORK!!!



ABBOTT: No, you miss my point.



COSTELLO: What point?



ABBOTT: Someone who doesn't look for work, can't be counted with those who look for work. It wouldn't be fair.



COSTELLO: To whom?



ABBOTT: The unemployed.



COSTELLO: But they are ALL out of work.



ABBOTT: No, the unemployed are actively looking for work. Those who are out of work stopped looking. They gave up. And, if you give up, you are no longer in the ranks of the unemployed.



COSTELLO: So if you're off the unemployment rolls, that would count as less unemployment?



ABBOTT: Unemployment would go down. Absolutely!



COSTELLO: The unemployment just goes down because you don't look for work?



ABBOTT: Absolutely it goes down. That's how you get to 9%. Otherwise it would be 16%. You don't want to read about 16% unemployment, do ya?



COSTELLO: That would be frightening.



ABBOTT: Absolutely.



COSTELLO: Wait, I got a question for you. That means there are two ways to bring down the unemployment number?



ABBOTT: Two ways is correct.



COSTELLO: Unemployment can go down if someone gets a job?



ABBOTT: Correct.



COSTELLO: And unemployment can also go down if you stop looking for a job?



ABBOTT: Bingo.



COSTELLO: So there are two ways to bring unemployment down, and the easier of the two is to just stop looking for work.



ABBOTT: Now you're thinking like an economist.



COSTELLO: I don't even know what the hell I just said!



ABBOTT: Now you're thinking like a politician.

:banana:

 

[Richard L]

:bwahaha::bwahaha:



Funny but too true...but so true that it hurts when I laugh.



...Rich

 

[EddieS'04]

:bwahaha:

 

[Roger Batts]

I had to copy this one!

 

[Thomas Rogers]

This is funny.



Still, I've never understood why the unemployment rate is so confusing to so many people. Everything that we measure deserves an exact definition, and "unemployment rate" seems worthy for such a definition.



Seems simple enough to me. There are people in this country that are jobless, aren't working, and have no intention of working, and they shouldn't inflate the unemployment figures.

Official unemployment rate per the ILO definition occurs when people are without jobs and they have actively looked for work within the past four weeks.

-- Source: Wikipedia

 

[Kevin Lang]

Seems simple enough to me. There are people in this country that are jobless, aren't working, and have no intention of working, and they shouldn't inflate the unemployment figures.

They should be counted for fairness, after all, people who don't have health insurance, might even be working, and have no intention of buying health insurance have been used to inflate the "number of uninsured Americans" by the left to prop up Obamacare.



They should count unemployment the same way that they count the uninsured; the uninsured don't drop off the radar after 4 weeks of being uninsured and, pro tip, neither do the unemployed (per the actual definition, not your biased "redefinition").

 

[Thomas Rogers]

KL,



If you are saying that not counting those that have given up looking for work 4 weeks ago, or later, gives skewed numbers then I agree.



But the official unemployment rate is meant to take into account those people that are looking for a job rather than the whole pool of people sans jobs so it has to have some criteria for that endeavor, and for that criteria it uses "has looked for a job in the last 4 weeks." Granted, some people may be out of work for a long time and give up, and arguably they might want to be counted and we would be good to count them for certain reasons.



However, there are those that are jobless that have no intention or desire to look for a job. They are seasonal workers, housewives, househusbands, those deliberately between jobs due to taking an extended period out of the employment ranks, the retired, etc.



So, I don't have a biased redefinition, I just quote the official definition.



As for comparing it to the uninsured, I think I can help there too. Again, just like there are people that are jobless and don't want and therefore aren't looking for a job, currently there are those without insurance, and don't want nor really drastically need insurance (I think you are making that point).



Yes, we could keep it simple and use the following equation (definition) for the unemployment rate:

Unemployment rate = # Americans not working / American population

If we were to do that, however, then unemployment would look rather large as it would take into account children, housewives, the retired, and people otherwise simply not wanting to or needing to work.



So, instead, to solve that problem, the official unemployment rate is calculated as:

Unemployment rate = # Americans unemployed / American population

where: "unemployed" means not working and having looked for a job in the past 4 weeks.

See the difference?



For similar reasons the uninsured rate is also controversial. Arguably, it doesn't adequately take into account those people that simply don't want, don't really think they need insurance (18, 19, 20-something year olds, etc). So, you are correct, such people inflate things.



A better measure might be to somehow take into account those people that don't have but want and should have insurance. But, what criteria would be used to define those people?



So, I don't have a biased "redefinition", just pointing out the necessity in having some criteria that defines the "unemployed" and using that in calculating the unemployment rate.



TJR

 

[Robert Thomas]

If they just asked during the survey. "Are you unemployed"? "Do you want a job"? Then they would have the correct number.

 

[Kevin Lang]

If we were to do that, however, then unemployment would look rather large as it would take into account children, housewives, the retired, and people otherwise simply not wanting to or needing to work.

Do we need to "draw a line" when it comes to counting people who lack jobs as being unemployed? Yes, I agree with that, however I am extremely skeptical of the methodology used to draw the line currently, especially when it gives us such "convenient" numbers. How do those who draw the line know if a person has looked for work within 4 weeks? How is "looking for work" defined? Why is 4 weeks an acceptable time period? Are those who draw the line drawing it honestly? I find that unlikely.



Why is it acceptable to "draw a line" for unemployment but not for the uninsured? If I were to be uninsured and had not looked for it in 4 weeks, why would I still be counted as uninsured?



That the unemployed, something inconvenient to the Administration, quietly "go away" while the uninsured, which are convenient to the Administration, do not causes me to raise an eyebrow.

If they just asked during the survey. "Are you unemployed"? "Do you want a job"? Then they would have the correct number.

+1



That they don't is "fuel to the fire" that the unemployment numbers are conveniently altered to fit an agenda.

 

[H D]

That doesn't even cover it. There are those that do not have a job, don't want a job, but should be looking for a job but won't because welfare pays more than McDs, literally.



Unemployed should be those age 18+ that are out of work, capable and not in retirement. If you're not retired, physically capable of work and not working, you are unemployed. Doesn't matter if you "want" a job or not. There are many that do not "want" to work and we sometimes give them the choice of working or collecting.



For any able-bodied old man in good health and not enjoying the fruits of his life through retirement, he is unemployed IMO, regardless of his desire to work or motivation to look for work.

 

[Gavin Allan]

Workforce participation rate seems to make more sense to me.

 

[Thomas Rogers]

KL,



Whenever one adds criteria to something so very important there will likely always be disagreement, debate and skepticism.



4 weeks was what was picked. Sure, we could ask people:



"Do you have a job? Do you want one."



Or



"Do you have a job? Are you looking for one."



But what does that mean. There's "looking", and then there's "really looking." There is "wanting" and then there is "really wanting", so much so that you will take a job when offered even if not exactly your ideal job.



It is all very subjective. At least "4 weeks" is not subjective, it is quantitative.



I know people that have been out of work for months, heck, years. Opportunities present themselves, jobs get offered, but they decline, and keep looking, and looking for them means waiting for someone to offer them a dream job that they can't turn down. But, if you ask them, they will tell you that they "are looking", they would say that they "want a job."



I don't necessarily think the 4 weeks thing is that great either, but it's something specific...right or wrong.



As for Hugh's definition, I don't think it covers millionaire playboys that don't have to work, or stay at home mom's that certainly could work PT but really already have a full-time task of taking care of the kids. Neither are "looking for work", and to me, neither should be counted to increase the unemployment rate. I do recognize there are not that many millionaire playboys...but there are a lot of house moms, and house dads.



TJR

 

[H D]

there are a lot of house moms, and house dads.

About 47% of the population?







Kidding, just a little topical humor.

 

[Gavin Allan]

Maybe they are like Cousin Eddie and are holding out for a management position.

 

[Kevin Lang]

TJR, all your justifications for the unemployment rate discounting people who lack jobs could be logically applied to discounting people from the uninsured rate who do not have health insurance. Yet no one has ever left the ranks of the uninsured without buying insurance. Double standards frustrate me. Going back to your original post, I don't think believe that the unemployment rate "confuses" people, rather I think that the conniving and doctoring used to fit the numbers to an agenda frustrates them.



...I should know by now that integrity in politics is a pipe dream, but I just can't accept it.

It is all very subjective. At least "4 weeks" is not subjective, it is quantitative.

Sure, 4 weeks is qualitative, or to use the conventional dichotomy, objective. Though I don't think that matters a bit as the whole qualifier to be stricken from the unemployment count is "haven't looked for a job in 4 weeks", and as you illustrated, "looking for a job" is subjective.

Opportunities present themselves, jobs get offered, but they decline, and keep looking, and looking for them means waiting for someone to offer them a dream job that they can't turn down. But, if you ask them, they will tell you that they "are looking", they would say that they "want a job."

So they are indeed looking for a job, do not have a job, and you're saying that they shouldn't be counted as unemployed because they're holding out for a particular job? That doesn't really jibe IMO.

stay at home mom's that certainly could work PT but really already have a full-time task of taking care of the kids.

I guess it depends upon how sex-neutral Hugh's use of the word "man" was intended to be??

but there are a lot of house moms, and house dads.

From a primal standpoint I find something odious about the idea of a "house dad".

 

[Thomas Rogers]

KL,



It may not jibe for you, but it is kind of like Gavin's funny example. Do you really think we should count as unemployed those people that could be working, but are not, and arguably aren't really actively looking for a job, but "claim" that they "want a job?"



For me, I don't think so.



Those folks are just slackers! ;-)



TJR

 

[H D]

I think if we simply counted those that are non-retired, age 18 and older, and non-disabled, we could have a true unemployment number. We would then be able to figure what percentage would be a healthy number, regardless of reason. We don't currently consider 0% unemployment as ideal; somewhere around 3% is considered full employment. The number would skew higher, but we might find that around X% (something much higher than 3%) unemployment is ideal when accounting for non-working parents. Millionaire playboys would fall into the "retired" segment that is not included in the survey, IMO, as they are living off of their previous earnings and investments as does any retired person.



So, we may have a 32% unemployment rate but know that 14% is ideal (just pulling numbers out of my :cheeky. This would tell us exactly how many able-bodied Americans are in some way not employed as well as how many of those are or should be looking for work. We would know that as much as 14% of Americans truly have no need for employment. That would mean 18% above ideal; 18% who should be but are not working. Maybe we could also keep the current method in place as well so we could see that 8% actually want to work. We could then deduce that 10% would rather not work.



The current number just tells me that "at least" 7.X% of Americans are without a job and approximately that many actually want to work. I know that there are people not working that should be and not looking but should be. I have no idea how many there are, though. The reason we can't calculate it like this is we might just get an idea of how many people actually live exclusively on the government dole.



If I know that 10% of the country (18% above ideal minus 8% looking) is relying on exclusively living off of the government, I know that it might take $500k invested per person to lift them out of poverty. I also then know that 10% of of the population is approximately 30k people. So, now the common person knows that truly impacting poverty would require only about $15 Billion per year. Considering what we spend on social welfare at the moment, we could spend multiples more than that on investing in the impoverished and still save money.



Imagine investing $500 Billion (small for our budgets) in directly impacting poverty in the individual lives of those requiring it, those 30,000 people. What would that do for hunger, cyclical poverty, illiteracy, lifestyle diseases, etc. Imagine spending $16 Million per individual in poverty. How educated could they be, how healthy, how prosperous and productive?



Why spend ridiculous amounts of money on providing bare sustenance living when we could provide everything they need to be productive and not rely on welfare? Unless we don't think that $16 million (or whatever big #) per individual, directly impacting that individual in a real and lasting way so that they no longer require welfare assistance. I like to think that a directly spent $16 million per individual could have an impact.



It's not about that, though, is it? It's about votes.:cry:

 

[Kevin Lang]

Do you really think we should count as unemployed those people that could be working, but are not, and arguably aren't really actively looking for a job, but "claim" that they "want a job?"

Yes, I think we should call a spade a spade. Though what "we" count isn't as important as what the politicians count, sadly. We could take this quote of yours, make appropriate substitutions for "job", "work" and "unemployed" to apply it to the uninsured count, and if you were to submit that modified question to the Powers that Be, their answer would unequivocally be "yes". 2 similar scenarios, 2 radically different methods of accounting. Mark Twain was right.



Hugh, isn't 10% of our population a lot higher than 30,000? Isn't the population 311-some-odd-million people?

I like to think that a directly spent $16 million per individual could have an impact.

As would I, as even though our dollar's value is dropping 16 million of 'em is still a meaningful amount in my mind. That said, I'm not sure what you mean by "directly" spending $16 million/person. 16 million dollars per person, even in today's money, is a lot of money to spend on making each person productive. Would they truly be productive, I mean, they'd have to bring in over 16 million to the US Government directly to have any "net productivity", right? I don't think too many would be able to do that.

 

[Thomas Rogers]

KL,



I too think we should call a spade a spade. To me, the unemployment rate should be about those people are are not working, want to work, are sincerely and earnestly looking for a job, but haven't found one yet.



TJR

 

[H D]

Sorry, horrible math. Really embarrassing bad math. Lol. There would not be a net gain necessarily, but I would think the waste would be decreased.