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Is the unemployment rate really as low as they say it is?

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I have mentioned elsewhere that I have little trust in public statements. Not only do individuals tell lies, but I believe that our bureaucracy often gives out information which bears little relation to the truth. I wonder if we can rely on any information we are given about our society.

One area where this is particularly obvious is the unemployment rates which are released regularly by the relevant "authority".

It is pretty clear that the definition of "unemployed" is a bit rubbery. Many people who have no job are classed as "not unemployed" because they are undergoing "training" in such important life and work skills as resume writing. I know of one unemployed person who did this one week training course so often that he was eventually allowed to present his resume at the beginning of the course and was then allowed the whole week off. He still had no job and he wasn't receiving any training but he wasn't "unemployed".

I don't know how many such ways there are in use to reduce the published unemployment rate but I would be surprised if this was the only official scam.

I have a measure of the real unemployment rate which is calculated as follows. Determine the total number of man-hours actually worked per week. Determine how many man-hours per week are on offer by the whole workforce , that is the sum of all the work people want to do. Divide the man-hours worked by the man-hours on offer to get the real employment rate. Take this away from 100% to get the real unemployment rate.

My estimate of what this figure would be is based on the reports of the number of people who are "employed" but only in casual and part-time jobs, and on some assessment of the number of people in the "system" who are looking for work but have been classified as "not unemployed", and on a guess at how many people have opted out of the "system" because of the frustration caused by the incessant impediments put in front of them.

The figure I come up with in nothing like the 5 or 6% quoted in official figures but closer to 20%. My figure might, of course, be wrong but so is the official figure.

There is another related scam at work as well. Many people are now working many unpaid overtime hours. This scam actually creates unemployment as fewer people are needed to do the same amount of work. The apparent upside for the employer is that they reduce their labour costs without losing production. The downside is that the workforce become increasingly disenchanted with their lot and their loyalty to their employer evaporates with long term effects on productivity.

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Created: 09.11.2004 and last revised 09.11.2004
Author: Robin Chalmers Copyright in all the material on this site is asserted by the author
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