Is it up or down?
Discussion
groucho said:
Unemployment, that is. According to ITV this morning it's up, but R2 just now says it's down. It can't be both.
It's been both since the 80s when figures got so complex that anything could be got from them, you can count JSA claimants, you can then discount New Deal claimants. Or add on Disability claimants, etc. You pays your money and you makes your choice. My favourite gubmint line is "the rate of increase in umemployment is down." I did a study on the UKs "economic miracle under chairman Winky" at uni and I upset the far-left lecturer (unsurprisingly a Labour voter) when I presented evidence showing the fiddling of figures for unemployment rates 
What annoyed him most was when I showed the shift in numbers from unemployment benefits to disability benefits in "working class areas" when Labour came to power which had reduced the official unemployment figures by a million or two (as disability benefits does not count as able to work)
What annoyed him most was when I showed the shift in numbers from unemployment benefits to disability benefits in "working class areas" when Labour came to power which had reduced the official unemployment figures by a million or two (as disability benefits does not count as able to work)
Monki said:
I did a study on the UKs "economic miracle under chairman Winky" at uni and I upset the far-left lecturer (unsurprisingly a Labour voter) when I presented evidence showing the fiddling of figures for unemployment rates
What annoyed him most was when I showed the shift in numbers from unemployment benefits to disability benefits in "working class areas" when Labour came to power which had reduced the official unemployment figures by a million or two (as disability benefits does not count as able to work)
How did you define "working class areas" ?What annoyed him most was when I showed the shift in numbers from unemployment benefits to disability benefits in "working class areas" when Labour came to power which had reduced the official unemployment figures by a million or two (as disability benefits does not count as able to work)
Fittster said:
Monki said:
I did a study on the UKs "economic miracle under chairman Winky" at uni and I upset the far-left lecturer (unsurprisingly a Labour voter) when I presented evidence showing the fiddling of figures for unemployment rates
What annoyed him most was when I showed the shift in numbers from unemployment benefits to disability benefits in "working class areas" when Labour came to power which had reduced the official unemployment figures by a million or two (as disability benefits does not count as able to work)
How did you define "working class areas" ?What annoyed him most was when I showed the shift in numbers from unemployment benefits to disability benefits in "working class areas" when Labour came to power which had reduced the official unemployment figures by a million or two (as disability benefits does not count as able to work)
It wasn't my definition, it was pulled from a paper on unemployment and the economy by one of the Sheffield Universities. However it did mention that the traditional areas where this was happening was the former mining towns and places where industry was failing.
I have found a report from Bloomberg which sort of covers what I found but not in depth (don't have access to academic papers anymore!)
Indeed, Britain has so many ill people, it is prompting some observers to reassess whether its economy is as healthy as is regularly portrayed.
British Prime Minister Tony Blair and Chancellor Gordon Brown like to boast about how the U.K. has one of the lowest unemployment rates in the world.
``When Labour came to office in 1997, unemployment across the U.K. was close to 2 million,'' according to excerpts from Brown's campaign rally speech released in advance by the Labour Party last week. ``Now it is less than a million, the lowest for 29 years.''
The figures certainly seem to bear out that claim. The unemployment rate, which counts those claiming jobless benefits, was just 2.9 percent in April, the lowest, as Brown points out, for almost three decades. The International Labor Organization has a slightly less flattering way of counting the unemployed, showing the U.K. rate at 4.7 percent in the first quarter.
And there's certainly no shortage of people doing jobs. Total employment climbed 195,000 to a record 28.4 million in the first quarter from the last three months of 2003, according to U.K. government statistics.
Academic Study
Yet that achievement seems to be more linguistic than economic: Unemployment has been redefined rather than reduced.
Anyone who follows the statistics will have noticed that as the unemployment rate has gone down, disability cases have risen.
That was confirmed in a recent paper by Christina Beatty and Stephen Fothergill of the Centre for Regional Economic and Social Research at Sheffield Hallam University. It says that Britain now has more than 2.5 million non-employed adults of working age who claim sickness-related benefits -- a total that ``questions contemporary perceptions of the UK labour market'' and points to ``extensive hidden unemployment.''
As the authors rightly say, the numbers claiming Britain's so- called incapacity benefit are ``truly astonishing.'' In 1981, there were 570,000 people receiving the benefit for more than six months. By 2003, that figure had risen to 2.13 million. In addition, there were 300,000 recipients of the Severe Disablement Allowance, and 200,000 short-term claimants of the incapacity benefit, the report shows.
2.7 Million Recipients
According to Beatty and Fothergill, almost 2.7 million non- employed people of working age were receiving sickness-related benefits in August last year. That's closer to 10 percent of the 28 million employed people in the U.K. -- a number that puts the stated 2.9 percent unemployment rate in a different light.
Of course, it's possible that all those people are genuinely ill. Yet somehow that story doesn't quite add up. Standards of health care have generally risen in Britain in the past two decades, as they have in most developed countries. Second, Britain has a disproportionate number of people in this category compared with its European neighbors.
According to the latest available Eurostat figures, 27 percent of the British working-age population didn't work in 2002 because of illness. But in Italy, the rate was 6.6 percent, in Spain 8.7 percent, and in Germany 11.2 percent. Only Finland was worse off, with a rate of 32 percent.
It seems unlikely that the British are three times as unhealthy as, say, the Spanish. Moreover, those who are declared incapacitated in Britain seem to be concentrated in areas of industrial decline -- Merseyside, the Northeast, and South Wales. In effect, the unemployed there are now categorized as ``sick.''
Question of Semantics
Does any of that matter? After all, most European countries have a large unskilled underclass. Whether you define them as ill or unemployed may well be a matter of semantics. Indeed, since many of them are elderly and unable to earn an adequate wage, it is arguably kinder to label them as ill.
It matters because the first step to solving any problem is to acknowledge it, and because the worst form of deception is self- deception.
Take this example. The Bank of England is now set on a path of steadily raising interest rates to cool an economy that it regards as overheated. But an economy in which more than 3.5 million people aren't working may not be so ``overheated.''
Solutions are thin on the ground. Maybe the benefits should be cut? ``Without an increase in demand, alongside a change in the benefits regime, this would only lead to an increase in unemployment,'' Beatty said in an e-mailed response to questions.
Regional Aid
Her own preference is for more emphasis on regional policy. ``Supply-side measures are unlikely to work on their own -- ultimately the demand for labour in some of these areas is still low,'' she said.
That's certainly one possibility -- although the areas of greatest ``disability'' are those that received most regional aid in the past.
Just as plausibly, the U.K. government should stop loading up business with new regulations and taxes -- that, too, might encourage the creation of more jobs.
You can take your pick -- more regional aid, or less government -- according to political preference.
What is certainly true is that the British should stop kidding themselves about curing unemployment. Giving something a new name is not the same as getting rid of it -- and it does nobody any good to pretend that it is.
To contact the writer of this column:
Matthew Lynn in London at matthewlynn@bloomberg.net.
To contact the editor responsible for this column:
Bill Ahearn at bahearn@bloomberg.net.
Last Updated: June 2, 2004 03:39 EDT **
I have found a report from Bloomberg which sort of covers what I found but not in depth (don't have access to academic papers anymore!)
- U.K. Employment Paradise Is a Matter of Semantics: Matthew Lynn
Indeed, Britain has so many ill people, it is prompting some observers to reassess whether its economy is as healthy as is regularly portrayed.
British Prime Minister Tony Blair and Chancellor Gordon Brown like to boast about how the U.K. has one of the lowest unemployment rates in the world.
``When Labour came to office in 1997, unemployment across the U.K. was close to 2 million,'' according to excerpts from Brown's campaign rally speech released in advance by the Labour Party last week. ``Now it is less than a million, the lowest for 29 years.''
The figures certainly seem to bear out that claim. The unemployment rate, which counts those claiming jobless benefits, was just 2.9 percent in April, the lowest, as Brown points out, for almost three decades. The International Labor Organization has a slightly less flattering way of counting the unemployed, showing the U.K. rate at 4.7 percent in the first quarter.
And there's certainly no shortage of people doing jobs. Total employment climbed 195,000 to a record 28.4 million in the first quarter from the last three months of 2003, according to U.K. government statistics.
Academic Study
Yet that achievement seems to be more linguistic than economic: Unemployment has been redefined rather than reduced.
Anyone who follows the statistics will have noticed that as the unemployment rate has gone down, disability cases have risen.
That was confirmed in a recent paper by Christina Beatty and Stephen Fothergill of the Centre for Regional Economic and Social Research at Sheffield Hallam University. It says that Britain now has more than 2.5 million non-employed adults of working age who claim sickness-related benefits -- a total that ``questions contemporary perceptions of the UK labour market'' and points to ``extensive hidden unemployment.''
As the authors rightly say, the numbers claiming Britain's so- called incapacity benefit are ``truly astonishing.'' In 1981, there were 570,000 people receiving the benefit for more than six months. By 2003, that figure had risen to 2.13 million. In addition, there were 300,000 recipients of the Severe Disablement Allowance, and 200,000 short-term claimants of the incapacity benefit, the report shows.
2.7 Million Recipients
According to Beatty and Fothergill, almost 2.7 million non- employed people of working age were receiving sickness-related benefits in August last year. That's closer to 10 percent of the 28 million employed people in the U.K. -- a number that puts the stated 2.9 percent unemployment rate in a different light.
Of course, it's possible that all those people are genuinely ill. Yet somehow that story doesn't quite add up. Standards of health care have generally risen in Britain in the past two decades, as they have in most developed countries. Second, Britain has a disproportionate number of people in this category compared with its European neighbors.
According to the latest available Eurostat figures, 27 percent of the British working-age population didn't work in 2002 because of illness. But in Italy, the rate was 6.6 percent, in Spain 8.7 percent, and in Germany 11.2 percent. Only Finland was worse off, with a rate of 32 percent.
It seems unlikely that the British are three times as unhealthy as, say, the Spanish. Moreover, those who are declared incapacitated in Britain seem to be concentrated in areas of industrial decline -- Merseyside, the Northeast, and South Wales. In effect, the unemployed there are now categorized as ``sick.''
Question of Semantics
Does any of that matter? After all, most European countries have a large unskilled underclass. Whether you define them as ill or unemployed may well be a matter of semantics. Indeed, since many of them are elderly and unable to earn an adequate wage, it is arguably kinder to label them as ill.
It matters because the first step to solving any problem is to acknowledge it, and because the worst form of deception is self- deception.
Take this example. The Bank of England is now set on a path of steadily raising interest rates to cool an economy that it regards as overheated. But an economy in which more than 3.5 million people aren't working may not be so ``overheated.''
Solutions are thin on the ground. Maybe the benefits should be cut? ``Without an increase in demand, alongside a change in the benefits regime, this would only lead to an increase in unemployment,'' Beatty said in an e-mailed response to questions.
Regional Aid
Her own preference is for more emphasis on regional policy. ``Supply-side measures are unlikely to work on their own -- ultimately the demand for labour in some of these areas is still low,'' she said.
That's certainly one possibility -- although the areas of greatest ``disability'' are those that received most regional aid in the past.
Just as plausibly, the U.K. government should stop loading up business with new regulations and taxes -- that, too, might encourage the creation of more jobs.
You can take your pick -- more regional aid, or less government -- according to political preference.
What is certainly true is that the British should stop kidding themselves about curing unemployment. Giving something a new name is not the same as getting rid of it -- and it does nobody any good to pretend that it is.
To contact the writer of this column:
Matthew Lynn in London at matthewlynn@bloomberg.net.
To contact the editor responsible for this column:
Bill Ahearn at bahearn@bloomberg.net.
Last Updated: June 2, 2004 03:39 EDT **
Edited by Monki on Wednesday 20th January 11:27
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