the total adult population is known as the working population.
and participation rate is labour force/working pop. not the other way around. (sorry my bad, I wrote that at participation rate was u/e rate when i got home and was pissed)
unemployment rate =unemployed/LF.
I think we’re saying the same thing, but using different terminology. and the ABS isnt necessarily correct, they’re just being told how to work it out.
as for discouraged workers, you dont think they should be included?
I think the UE rate should be worked out of the unemployed/work pop, which would give a real UE rate. the current calculation gives a much lower reading.
Yeah it’s been an upshot for me in a few ways. Lower interest rates mean I have a lot more cash/fortnight, I’ve even been able to but a new frame this week! I won’t run out and splurge on piles of superfluous stuff, rather invest the money in areas that will benefit me later on down the track, something I’ve been wanting to do for ages now. This will be easier as the financial market is shot to shit and is ripe for the plucking. In the meantime, the usual stores will still be getting my cashflow.
Well, the terminology is the same, but the meaning is different. And technically, your meaning is not correct. Just so that it’s clear, a person is unemployed if (abridged version) he or she is on temporary layoff, is looking for a job or is waiting to start a new job. I.e. a person who chooses not to work, is not unemployed, by definition.
So what you have suggested, unemployed/working population, would actually decrease the rate because the numerator has remained the same and the denominator has increased.
But, I think I know what you mean… are you suggesting that we should measure (unemployed + those adults not in the labour force)/working population?
For Australia this is 38%. This is the proportion of people over 15 who either choose not to work or are unemployed. Do one in three of the adults you know consider themselves ‘unemployed’? I wouldn’t think so, and that’s is why I disagree with this as a measure of ‘real unemployment’. It simply shows the proprotion of adults who don’t have jobs.
this is exactly what i mean. i dont see this as a problem. whilst that rate might seem high, why underestimate it?
people who have no desire to attain gainful employment should be counted. and those people who wrought the system should also (life dolers etc).
at the same time, people who gain full time incomes without technically being either employed or (technically) unemployed. and yet, these people are not counted (self funded early retirees).
there’s room for variation in the system, and just because ‘its the way the ABS work it out’ doesnt necessarily make it right.
if neo classicalists say we should work it out this way it isnt automatically correct, its not like economists have ever got it wrong before…
and I imagine they are being told by the RBA, who employ some of the smartest people in the country who also have a social conscience: so don’t think they are deliberately trying to hide ‘real unemployment.’
Regardless of whether the other measure you are proposing is correct or not, how is it relevant? If it is thought that the proportion of people without jobs, 38%, is too high, the governement might create jobs and the RBA and might cut the cash rate. But no matter how many jobs are created or how low rates get, if these people choose not to work, then the 38% will not decrease. Hence the unemployment rate as calculated gives meaningful information about the state of the economy and the affect of any monetary or fiscal policies.