Fake Data 3: The Biggest Lies of All…Unemployment Data

In the parallax world of jobless statistics, off the radar means gainfully employed, sick means rich, in profound despair means in a fulfilling job, and workforce means everyone with a 1975-style white collar job. The Slog rounds off the data-lies series with a jaundiced view of those recording unreal levels of unemployment.

In the first two essays in this series, I wrote about the types of (and reasons for) wildly inaccurate “government” reporting on the subjects of growth and inflation. The reporting of unemployment across the US, UK and eurozone, however, is in a different league of mendacity.

While many of us found it amusing six years ago to discover that UK Chancellor George Osborne was using prostitution in a desperate bid to boost the gdp figures, this was (despite Osborne’s dedicated personal efforts) rather like urinating into the Atlantic in an attempt to raise sea-levels. Unemployment data lies, by contrast, use misrepresentation on a much greater scale and in a far wider variety of ways.

There is a very good and obvious reason for this. Despite the gradual takeover of Western elected governments by unaccountable corporate lobbying, for those actively engaged in the workforce during the child-rearing period, research has shown again and again that the single biggest consideration is the rate of unemployment. People are less sure than they used to be about sovereign debt, inflation and economic growth; but they are as certain as ever that falling unemployment is good, and rising unemployment is bad.

Hence the consistent attempts on both sides of the Atlantic and on the European mainland to obfuscate any clarity there might have been about the level of people who are “out of work”. Indeed, even that term has been corrupted in myriad ways, such that working fewer hours, long-term unemployment, taking a more lowly job or being ill have all been used to polish the rose-tinted glasses governments hand out to their citizens.

In the US, the Bureau of Labor Statistics (BLS, short for bullsh-t) doesn’t use reliable behavioural data such as the number of people claiming unemployment benefit. Rather, the U.S. government conducts a monthly sample survey – known as the Current Population Survey (CPS) – to measure the extent of unemployment in the nation. Thus the employment rate is based entirely on what we call in the research business “self-assigned” definitions….with all the dangers that implies: it is a measure of what householders think, not an audit of how much money is or isn’t coming into the home.

Because the sample is 60,000 strong, the BLS says the margin of error is 0.19% – but that is a spurious assertion: the margin of self-reporting error is incalculable, because people in difficult circumstances tell social lies to strangers with a clipboard.

However, this is only the start of the nonsense. BLS stats exclude all those who are sick, or in the armed forces. Sickness is assumed to be a temporary reason for lacking a job, which is idiotic; and nobody measures the numbers applying for the right to get their heads shot off, although several studies over more than 70 years have shown that in times of hardship, the unemployed escape to become dogs of war.

Americans thus interviewed are considered “employed” if they did any paid work at all in the previous week. They are counted as “unemployed” only if they can recount active employer contact in terms of cold-calling HR personnel, or attending interviews. Both are ridiculously narrow definitions. Both favour the élite’s view of economic health, and are used as weapons to ridicule those who disagree.

Only the US U-6 measure gives any kind of idea about the real level of unemployment in the States because it measures under-utilisation. But this one too is riddled with optimistic assumptions: there’s a sub-group of “marginally attached” workers, for instance, who have looked for work in the previous year, and want a job. They are filed as “employed”. They very obviously aren’t.

Ultimately, the most fraudulent measure of all is that which defines all those not looking for work and not claiming unemployment benefit as “employed”. Benefits are available for a limited period of time, and many people give up looking on the logical premise that their colour, age, sex or lack of formal education is being held against them. The chances are that a good 80-90% of this group are desperate long-term unemployed….but they are listed as “in work”.

You might hope that more sanity is attached to the UK’s jobless statistics. Don’t. We are told that unemployment here is under 4.5%, and that “only” one and a half million are unemployed. This seems somewhat at odds with the figure from the Office of National Statistics (ONS) showing that there are six million households among the workforce in a constant battle with debt, and unable to afford even the basics for themselves and their children.

The last time unemployment was this “low”, Ted Heath was in power, and trade union strength ensured that almost everyone fit to work did so: what a triumph for neoliberal economics this is, we are told.

As in the United States, the problem is our definition of unemployment. But we don’t make all the same mistakes as the Americans: we also make different ones. And once again, they all flatter the Government.

Anyone in Britain taking time off – for, say, a gap year – or having given up ever finding work, or are sole carers with no time to go to work…none of these people are counted as the workforce. It is the most ironically insane way of solving the unemployment problem: one simply takes those without work and suggests they don’t need to – as if they might be Edwardian gentlefolk of independent means. They are not working, so to speak, because they don’t.

In reality, more than one adult in five is without a job; and even taking into account the growth of part-time work, that’s at least three times the stated rate of joblessness. The real number of people without a salaried job in the accepted sense of the term is almost nine million. One in three of those rated as “employed” want to work anything from 30-60% more hours.

There are three times more males who feel this way than there were in 1977. And as we saw in part two last Friday, wage inflation is actually negative for over 70% of the workforce. The reason is obvious: employers can exert pressure on candidate employees because supply vastly exceeds demand. The reasons for this are multivariate: Britain’s manufacturing sector has shrunk, the internet has destroyed thousands of business models, and other technologies have made automation possible on a hitherto unimaginable scale.

Yet Governments of both Left and Right have been hiding the obvious consequences for at least three decades. In fact, it is 27 years since a spectrum of unemployment statisticians got together under the heading of Radical Statistics to express concern about the stunts being pulled to hide reality.

Since then, things have become much worse – although I must confess to some sympathy for the ONS, which comes in for serial bashing from the Left, but has in fact fought a valiant rearguard action to stop political perversions of data. It really is almost a form of sexual abuse, and it operates on many levels.

There is distortion of the geographical bias of unemployment which, when you remove it, makes very clear what has happened: the traditional formerly Unionised mass base of manufacturing workers has almost disappeared as our manufacturing output fell below the appalling figure of 9%, and the United Kingdom became the swirling vortex of financialised “service economy” capitalism.

As long ago as 2001, claimant levels in the North West’s Knowsley were thirty times higher than those of Mole Valley in Surrey.

The geographical bias is partly hidden by a further distortion of the size of the pool of unemployed. The surreal trick here is not to include those out of work – and no longer allowed to claim unemployment benefit. Both major Parties have reduced entitlement steadily over the last forty years: that political act is now interpreted as “100% of the long-term unemployed found work”….a delusional idea pioneered by Clinton in the US and continued by Bush on the one hand and Obama on the other.

Some mistakes, meanwhile, mirror those in the US….or have been copied, depending on your level of cynicism. Britain over-counts sickness as “still employed” to such a silly extent, we now have three times more people sick at any time than Germany, and five times more than France. Even 17 years ago, over a third of those called “employed but sick” wanted to work but couldn’t find any jobs. That is a massive and shameful number.

Not that the élites in the eurozone are beyond reproach: far from it. The tricks that (variously) Member State stats, ECB figures, eurogroupe numbers and deliberate misuse of data “interpretation” employ show all the expected suspects bending the truth with such a level of creativity, one can only ponder how much better things might be if they applied such ingenuity to the real problem itself.

“Statistical criteria are always debatable,” according to economist José Maria Castro Caldas, who works at CES, a respected centre for social studies at the University of Coimbra in Portugal. “They’re just conventions, and they change over time. As far as the unemployment figures are concerned, there are differences of opinion,” he said. Mr Caldas is, it has to be said, a model of politesse.

Since 2011, the statistical agencies of the European Union have not been allowed to count unemployed people in training programmes or government funded job schemes as unemployed. They clearly are of course, but in the EU’s Room 101 (aka the eurogroupe) what actually is doesn’t matter too much. Just as in the anglosphere, politicians long for lower unemployment figures using the sort of definitions narrower than an anorexic’s waistline.

In Portugal during the period 2012-14, unemployment fell while the economy was undergoing profound stagnation. That’s a hard one to rationalise.

In Italy, they simply lie about it. Reuters noted in 2013 that ‘data from national statistics bureau ISTAT show that alongside the 2.7 million officially unemployed in 2012, there were 3 million more who said they wanted jobs but were not actively looking for them, meaning they are not counted as unemployed. That is a far higher number than anywhere else in the 27-nation EU’. Sound familiar?

To say Spain has structural problems with its labour market in terms of unemployment would be the understatement of the reign of Homo sapiens as a two-legged species. For some years now I’ve had sound contacts there; regardless of political persuasion, the one thing they agree upon is that the scale of the problem is deliberately hidden. (This is not without relevance when it comes to the question of Catalonia’s future).

In Greece, the departure of workers for other parts of the EU is not taken into account at all when percentaging the “rate” of unemployment. Given the population has shrunk from over 11 milion to just under 10 million during the six years of eurogroupe austerity economics, that is one hell of an oversight.

With data mendacity, there comes a point at which there is not so much safety in numbers as utter satiation. An overload of information on the subject is like watching TV reports of Vietnam in the late 1960s: rather than increasing the horror, citizens become inured to it.

So it would be as well in closing to adopt the bold typeface in the hope that it might stay just the right side of chest-prodding didacticism:

1. You can’t measure economic growth accurately by counting half-witted monetarist solutions as an incidentally normal part of gdp.
2.  
3. You can’t measure inflation reliably by taking half of the Ostrich eggs out of the basket.
4.  
5. You can’t give a true report on unemployment by recording those who are face down in the gutter as in work.

Socialist, neoliberal, communist and fascist régimes use data not to inform policy refinement, but rather to refine the Truth to a point where it supports their rigid ideological thinking.

This is but one dimension of the rise and rise of corporate military and socialist corporate State Belief systems in the context of neoconservative imperialism. It is part and parcel of our species tribalism in general, and feast-and-famine hoarding greed in particular.

We can either ignore this reality and press on with globalist mercantile self-destruction. Or we can scale down to community level, and engage in more positive mutually entrepreneurial capitalism.

Part 1 of this series can be read here Part 2 can be read here
Filed under: Data lies on Unemployment, Uncategorized Tagged: Globalist neoliberalism has failed, political perversion of analysis, Socialism is not the answer, Unemployment stats lie