Monday, August 20, 2012

Wishing Away the Unemployment Problem

Steven Hill, writing in Project Syndicate, thinks unemployment rates are too high. Unemployment, he says, is largely a “mirage,” created by misleading and unsupportable statistics. And he has a suggestion to get the unemployment rate down.

His suggestion is to count students as employed.

Yes, you read that right. Hill wants to count students who don’t have and can’t get jobs as if they did have jobs.

If you’re a student without a job, you should be outraged at Hill’s point of view. It is bad enough that you can’t get a job, you’re not getting paid a dime, and you’re forced to spend money you probably don’t have to get trained so that you can eventually, after several years, qualify for the kind of job you’re hoping for, but with no guarantees even then. Now some crazy economist wants to count you as if you already had that job you dream of having someday. As if all of your problems have already been solved. Or as if you’re just some kind of freeloader puffing up the unemployment numbers by not holding a job already.

It is not just students who should should be outraged by Hill’s suggestion. This kind of thinking is part of a larger pattern, in which academics and policy wonks view workers as an obstacle in their efforts to manage the economy — as if there could be an economy in any meaningful sense without someone doing some kind of work. This is not the first time someone has tried to obscure real people’s real problems by distorting economic statistics, and it won’t be the last.

If we really wanted a proper measure of the job market, labor market measures wouldn’t even consider whether a person is a student. If you have a job and are getting paid, you should be counted as employed, whether you are taking courses or not. If you are seeking a job and do not have one, you should count as unemployed, whether you are a full-time student or are sitting at home watching television most of the day. And, if you are not currently seeking a job even though you want one, you should count as a discouraged worker, whether you have simply given up on your career, are taking classes in the hope of eventually qualifying for a job, or are stuck in an unpaid internship trying to add some experience to your resume.

Current economic statistics distort the picture of the labor market by excluding some students from the counts of unemployed and discouraged workers, making the job market look a good deal better than it is.

This should be corrected by counting the job market the way it really is, not by indulging in fantasy. It does no good to further distort the view of the job market by creating a fantasy statistic in which people are counted as something other than what they really are.