Ignore the Unemployment Rate?
http://online.wsj.com/news/articles/SB10001424052702303496804579364852603962422?mod=WSJ_hp_EditorsPicks
Perhaps everything you thought you knew about the country's most sacrosanct economic indicator, the Unemployment Rate, is wrong. At least that is what Zachary Karabell thinks. Instead of being an insightful predictor of the true unemployment rate, Karabell argues that the U measurement is deeply misleading and over-generalized. As he explains,
"We have multiple unemployment rates—by race, gender, geography and above all educational attainment. When people talk of an unemployment crisis, it would be more accurate to speak of an education crisis or a crisis of men whose skills are mismatched to today's jobs. It would be more accurate to speak of a jobs crisis in specific regions of the country or for specific industries. Yet we maintain the collective fiction that one simple average accurately captures multiple realities."
Read the article and see what else the author has to say, and whether or not you agree with, leave a comment!
USA has various measures such as U3(official unemployment rate), U5 and U6(real unemployment rate) to measure the unemployment rate. It is good to have various measures which have selective criteria while calculating. However, as unemployment rate is calculated to expect economic growth, the unemployment rate of the working group(25 years- 65 years) should be more focused on. Also the age group above 65 years should not be included in" the labor force that has dropped out", as they have retired.
ReplyDeleteI agree with the article that the unemployment rate statistics is outdated and in need for reform. The unemployment rate was created by politicians that were supporting a more liberal economy. However, over the years the workforce has become more complex and diverse. We should create a more comprehensive report that tells the public the truth and breaks down its complexity. I would not get rid of the report completely, I would just reform the statistic to give the public the information they need.
ReplyDeleteUnemployment rate is just one indicator about the economy. We cannot request a lot of things about unemployment rate. It is true that the workforce become to complex,but any indicator should explain simply how is business and economic. I think that unemployment rate is still good indicator,because it can objectively show the flow of a worker.
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