it’s the economy stupid
TRANSCRIPT
It’s The Economy Stupid
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The tools that economists use
• Much of an economists’ work is looking at data sets
• There is a growing amount of good data in a modern, complex society although austerity means that governments may want to cut this down – for example the next 2021 census
• Some data sets get considerable press coverage and thus have an effect on our economic behaviour
• We will introduce you to one of these – the figures for unemployment in the UK
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Video Summary: Latest on the Labour Market, September 2012Part of Labour Market Statistics, September 2012 Release Released: 12 September 2012
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. This short video shows that:
Unemployment for everyone aged 16 and over for May to July 2012 was 2.59 million, down 7,000 on the previous three months. Employment for the same age group was 29.56 million, up 236,000 on the previous three months.
Public sector employment was 5.66 million in June 2012 and private sector employment 23.90 million. Public sector employment was down 235,000 and private sector employment up 471,000 between March and June 2012.
The three month change in public and private sector employment was affected by the reclassification of some educational bodies from the public sector to the private sector. Excluding the reclassification, public sector employment was down 39,000 and private sector employment up 275,000 between March and June 2012.
Finally it looks at total and average hours. It shows that over the past twenty years average full-time hours have fallen and average part-time hours have increased.
Source: Office for National Statistics
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Key points from the September 2012 Press Release
The employment rate for those aged from 16 to 64 for May to July 2012 was 71.2 per cent, up 0.5 on the quarter. There were 29.56 million people in employment aged 16 and over, up 236,000 on the quarter.The unemployment rate for May to July 2012 was 8.1 per cent of the economically active population, down 0.1 on the quarter. There were 2.59 million unemployed people, down 7,000 on the quarter.The inactivity rate for those aged from 16 to 64 for May to July 2012 was 22.4 per cent, down 0.5 on the quarter. There were 9.01 million economically inactive people aged from 16 to 64, down 181,000 on the quarter.Between May to July 2011 and May to July 2012, total pay (including bonuses) rose by 1.5 per cent and regular pay (excluding bonuses) rose by 1.9 per cent.In this release
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We should always ask
What exactly is in this data set?
For example unemployment figures represent the number of people who are out of work but are actively looking for and are available to start work within a fortnight
It is based on surveys done by the Office of National Statistics (ONS) which makes three monthly averages
If you work for as little as one hour a week you are employed, the same goes if you are on a government training scheme or on holiday
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A second set of unemployment figures
This is the claimant count, that is people who get Jobseeker’s Allowance. It comes from the Department of Work and Pensions (DWP). You are entitled to six months worth after you lose your job depending on your past National Insurance contributions, after that it is means tested but even if you get no money, if you sign on, you are a claimant.
It is lower than the ONS unemployment figures because there are many people who are out of work and seeking work who don’t sign on. This is very true now that we have so many dual income couples, if one is still in work, the family will get little in the way of benefits so they don’t bother to sign on.
In some more affluent areas, it has become a sign of weakness to sign on if your finances are good enough not to need benefits. This in turn means that those who need benefits are more likely to be stigmatised.
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A second set of unemployment figures
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Data is limited by
The cost of getting data – this can be considerable
Whether it measures what you are interested in. Much data on graduate employment has been based on surveys done a few months after graduation. Many who will get good employment are still searching and taking student type work
You want to make comparisons over time and compare like with like but where there are major social changes, this can be distorting
You want to make international comparisons
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http://www.ons.gov.uk/ons/dcp171766_276708.pdf
Covers inactivity and explains the statistics
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Economically inactive people have not been looking for work or are not ready to start work in the next fortnight. It includes retired people, those looking after a family or home, those who are ill or disabled, students and those who choose not to work
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http://hiring.monster.co.uk/hr/hr-best-practices/market-intelligence/labour-statistics-trends.aspx
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http://www.open.edu/openlearn/history-the-arts/culture/philosophy/concepts/60-second-adventures-economics
Try this one on invisible hands
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HOMEWORK
Start a record of the monthly data on unemployment – this appears in the middle of the month
Why do we have unemployment? If you don’t have much economic knowledge at this stage, all the better. Maybe when you have studied more economics, you will have a different view. Or you may not.
Look in more detail at some aspect of the data on unemployment or activity rates that interests you. It could be differences between male and female unemployment, public sector versus private companies, different regions of the country, youth or racial or ethnic groups.
Can you see any major changes in the data? What might they be and what might they mean?