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Deconstructing another "success story": Dodgy stats understate Portugal's unemployment rate

Already a common practice by the preachers of neoliberal ideology to hide its failure as well as the transformation of capitalism into a brutal Feudalism

globinfo freexchange

Economic researchers say official statistics understate Portugal's unemployment rates by reclassifying people who don't have jobs as something other than 'unemployed.' Jochen Faget reports from Lisbon.”

Until recently, Portugal's prime minister, Pedro Passos Coelho, had a reason to feel cheerful at the beginning of each month. That's when the national statistics institute reports unemployment rate numbers. Month after month, the unemployment rate sank, which the right-wing governing parties, the PSD and CDS, naturally celebrated as proof of the effectiveness of their economic policies. The crisis was over and everything was improving, according to the prime minister. Only, well, perhaps not. For the past two months, the unemployment rate has been rising again. It has gone back over 14 percent. The statistics agency has warned that unemployment, in an "extended sense," is actually around 22 percent in Portugal.”

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. European politicians prefer lower unemployment figures rather than higher ones, and as a consequence, there are now unemployment figures in 'narrower' and 'extended' senses. Mostly, the headline figures reported are the lower, "narrower" ones.”

'The number of those who have made use of employment agency job creation programs has risen enormously since 2013,' said Castro Caldas [economist who works at CES]. At the end of 2014, this allowed 170,000 people to disappear from the unemployment statistics. If they were included, that would add 3 to 6 percent to the figure.”

The researchers at CES have been looking at unemployment figures with skepticism for some time, and repeatedly pointed out inconsistencies. 'Unemployment figures can really only decline in an economy that's growing,' Castro Caldas said. 'So it seems very odd that the official unemployment rate in Portugal sank whilst the economy stagnated.' That, he said, was only possible through dodgy data classification - neither the 300,000 mostly young, well-educated people who left Portugal for other countries during the crisis years were counted in the official unemployment numbers - nor were people who have given up looking for work. The latter, who are officially called the 'discouraged unemployed,' are only counted as 'inactive,' and not unemployed. The same is true of part-time or occasional workers who want to work full-time.”

Many of the measures that the government has taken weren't aimed at reducing unemployment so much as improving official employment statistics, Castro Caldas said. Companies were in some cases given grants in order to 'employ' unemployed people on an unpaid basis. The unemployed were required to take on these often pointless jobs because they would otherwise lose their welfare payments. 'That's perverse,' Castro Caldo said.”

... the reality is what it is: 'One of five Portuguese citizens who is able and willing to work can't find a job. Maybe one out of four. Those are the real numbers.' Those numbers, however, are classed as 'unemployment in the extended sense' in the statistical agencies. These numbers have lately been publicly reported, which has made the prime minister, Passos Coelho, unhappy. What must have made him even unhappier is that the agency corrected its December 2014 for 'unemployment in the narrower sense' upward by 0.5, to above 14 percent. This meant that the government could no longer claim, as it had been doing, that the unemployment rate is falling in Portugal - for even as counted in the statistically prettified 'narrower' sense, it has been rising.”

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Did you know that there are nearly 102 million working age Americans that do not have a job right now? And 20 percent of all families in the United States do not have a single member that is employed. So how in the world can the government claim that the unemployment rate has “dropped” to '6.3 percent'?”

Well, it all comes down to how you define who is 'unemployed'. For example, last month the government moved another 988,000 Americans into the 'not in the labor force' category.”

[...]

102(!) million working age Americans that do not have a job right now? 20%(!) of all families in the US do not have a single member that is employed? Do you find these numbers exaggerated? Maybe not, if you read the following story by the "eye-witness" Yanis Varoufakis.

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