Ireland not only country with dodgy unemployment data
The US has published two monthly rates of unemployment since the mid 1990s and in Europe Jacques Freyssinet (b.1937), the prominent French labour economist, has succeeded in having what he calls "halo du chômage" or unemployment halo — unemployed people seeking work who are not included in the International Labour Organisation (ILO) definition of unemployed — included in official data. Official training programmes also give an opportunity to massage the data and in Ireland Enda Kenny, taoiseach, has announced a bogus full-employment target.
Deutsche Welle, the German broadcaster, reported in a piece last April: 'Dodgy stats understate Portugal's unemployment rate':
Since 2011, the statistical agencies of the European Union have not been allowed to count unemployed people in training programs or government funded job schemes as unemployed. And since 2011, Portugal's agencies have practiced the arcane art of juggling employment statistics to make things look better than they really are.
Economists at the Centre for Regional Economic and Social Research Sheffield Hallam University, in 2012 said in respect of UK unemployment data:
The largest distortion to both official measures of unemployment is the diversion of men and women onto incapacity benefits.
Finfacts 19 Jan, 2015 update: France: Hollande to add 500,000 fake jobs to cut jobless rate
In Ireland, the official ILO jobless rate was 8.8% at the end of 2015 and Finfacts calculates a broad unemployment rate of 19%.
The broad rate excludes:
1) People of working age in receipt of disability allowance, which amounted to 154,000 people in 2014;
2) Net emigration by Irish nationals of 147,000 in 2009-2015: if all had remained, the unemployment rate would be 6.3% higher (some left jobs that may have been filled by foreign workers but most of the Irish emigrants were graduates).
The broad rate includes:
19%: The ILO rate of 8.8% in Dec 2015 + 10.1%= 18.9% (81,000 in public activation schemes end Nov 2015; 106,000 underemployed part-time workers according to CSO Quarterly National Household Survey (QNHS) Sept 2015 and an estimate by the CSO of 35,000 for the Potential Additional Labour Force.
Alternatively using Live Register benefit claims + activation scheme numbers at the year end, 410,000, as a ratio of the workforce of 2.186m gives a rate of 18.7%.
Irish dole claims end 2015 at 410,000, Broad jobless rate at 19% — includes data that show low skills of the non-graduate workforce, according to the OECD.
The IMF warned in a report on Ireland in 2013:
If involuntary part time workers and workers only marginally attached to the labor force — two groups that registered significant increases — are also accounted for, the unemployment and underemployment rate in Ireland stands at a staggering 23%.
Eurostat, the EU's statistic office, estimated that Ireland had a broad rate of 17.2% in June 2015 (see chart below) — in addition Finfacts classifies people in activation schemes as being unemployed in a broad sense.
INSEE, France's national statistics office, reported on the third quarter of 2015 that in metropolitan France, among inactive people, 1.4m wished to work but they were not considered as unemployed according to the ILO definition: "they are part of the halo around unemployment. In Q3 2015, the number of people in this unemployment halo decreased sharply q-o-q (–64,000). In 2007, 770,000 inactive people aged between15 and 64 wanted to work but were not counted as unemployed as defined by the ILO."
Eurostat says in respect of its chart:
First, the three indicators supplementing unemployment have by construction looser requirements than unemployment itself, because they look at groups of persons who do not simultaneously fulfill all the criteria of the ILO unemployment definition. This softer definition makes the indicators more stable, as people in those three categories are less likely to leave the group. Second, persons in underemployment and persons available for work but not seeking tend to have structural reasons for their situation, e.g. because they believe no work is available, they are fulfilling domestic tasks etc. In the case of persons seeking work but not available the explanation is different, because they are a very dynamic group with high rotation. What happens is that the flow of individuals entering the category is very much balanced out by the flow of individuals leaving the category. This is because many of them are students starting to look for a job before the end of their studies. There is a fairly steady outflow of students finishing their studies and joining the labour market (hence leaving the indicator possibly to become employed or unemployed), balanced out by another steady inflow of students approaching the end of their studies and wanting to work but not being available to work yet.
Groups covered by the supplementary indicators consist mainly of women.
Irish full-employment target
We have covered the use of the bogus data here when the target for 2018 was announced in January 2015 by Enda Kenny and then reversed in late December 2015.
Kenny had claimed that a 6% jobless rate implied full-employment — this was after losing 55,000 recession jobs from the actual figure of 305,000 based on Central Statistics Office data.
21 Jan, 2015 copy email from the Department t of the Taoiseach to Finfacts explaining how Enda Kenny lost over 50,000 recession jobs to produce a bogus 2018 full-employment target, which he had announced on 14 Jan, 2015.
A positive development was that 3 months later Kenny's bogus target was ignored by economists at the Department of Finance who in April 2015 in the 'Stability Programme Update' (page 2) for the European Commission forecast jobless rates of 7.8% and 6.9% for 2018 and 2020 respectively.
In October 2015 the economists forecast (page 19) unemployment rates of 7.2%, 6.4% and 6.2% for 2018, 2020 and 2021 respectively — this is the current forecast and Kenny will have to find more dodgy data to present a full-employment target in 2020.
Eurostat's report last week on November 2015 EU jobless data show that Germany had a 4.5% rate followed by the Czech Republic at 4.6%. The CSO's December 2007 rate in Ireland for 15-74 year olds was 4.6%. Why would a rate of 6.4% in Ireland in 2020 be full-employment?