"Real" Swedish jobless rate 15%

The Financial Times (UK) ^ | 6/15/06 | By David Ibison in Stockholm

[tellw]

Sweden's unemployment rate is 15 per cent, three times the figure being used by the government, according to new research from McKinsey Global Institute, the think tank.

The consultancy's calculations indicate unemployment is set to rise further, with between 100,000 and 200,000 jobs outsourced to cheaper countries over the next 10 years if no corrective action is taken.

The numbers cast a pall over Sweden's international reputation as a thriving welfare state with low unemployment and will help focus attention on jobs ahead of September's national elections.

McKinsey reached its conclusions by including those who want to work and those who could do so, meaning people on government programmes as well as those on prolonged sick leave.

In its first assessment of the country's economy since 1995, it said: "Sweden's economy has reached a critical juncture. If nothing is done, the problems will become much more serious."

It praised Sweden for achieving average GDP growth of 2.7 per cent a year since 1995, which it attibuted to deregulation and improvements in private sector productivity.

But it said the country could not rely on future improvements in private-sector productivity, as the catch-up effect that had driven these developments would decline over time.

The ageing population would put the public sector under "intolerable pressure" unless productivity improved, it added.

"If nothing else changes, the resulting increase in welfare costs would become too large to finance through the current tax system in only 10 to 20 years," McKinsey said.

It forecast municipal income tax rates would have to rise from about 30 per cent to about 50 per cent, arguing that these rises would not be accepted by the public as welfare and health services would decline.

Last, it said that the real unemployment rate of 15 per cent could increase as the production of goods and services moved to lower-cost countries - such as the Baltic states, Poland and Russia.

"Sweden needs to move quickly to introduce reforms that would create favourable conditions for sustained productivity growth in the private sector, better performance in the public sector and the creation of jobs in the private services sector," it said.

It expressed confidence the country would be able to respond to these challenges, praising its productive industries, macroeconomic stability and good relations between politicians, companies and unions.

But McKinsey said that Sweden had a lot of lost ground to regain. According to the Organisation for Economic Co-operation and Development, Sweden had dropped from fifth position in its welfare ranking to 112th in 2004

[sachem longrifle]

A good way to see what America would look like if the Dem party had their total way is to look at western Europe or any Indian reservation. Thats how you can tell whats in store if they should ever come to power

[RexBeach]

By yiminy, dat report is rinning right upt my rimper!

[hubbubhubbub]

"Sweden's unemployment rate is 15 per cent, three times the figure being used by the government"

I hear U.S. is really 12%, 2.5 times the figure used by our government. We're approaching Socialist Sweden.

[litehaus]

Swedes DIDN'T really create heaven on earth??

I am deeply hurt....

[Wuli]

Gee!

I keep getting news items about various issues with regard to Sweden's large Muslim immigrant population. I wonder how many of Sweden's unemployed are Swedish natives who happen to be on the lower end of education and skills and who are now seeing their traditional jobs assumed, more frequently, by immigrants willing to work for less?

Does everyone realize that our own unemployment rate, here in the U.S., (1) does not count the unemployed whose unemployment benefits have run out and who no longer are registered somewhere as actively seeking employment; whereas (2) what is counted is the "number of employed" which is based, in part, on payroll data, which includes payrolls that include illegals who have managed to obtain false social security numbers?

If the "employed" illegals were not counted, and if the unemployed who have quit looking were counted, I wonder what would be the actual rate of unemployed American citizens and legal residents.?

We are told that the "real" unemployment rate is below 5%. Here in New Jersey recently a few thousand people (3,000 I think it was) applied for 300 jobs at a new Walmart store. Is there a statistical disconnect between actual unemploment rate and the government stated numbers?

The economy, in the aggragate, may be doing well (the sum of all things). How much of that that is "doing well" is "doing well" for illegal immigrants and how much of their "doing well" is slowing the rate of economic progress of the least skilled and least educated American citizens among us?

We are told that Mexican nationals working illegally in the U.S. sent $20 billion back to Mexico last year. What if there were not 12 million illegals allowed to work here, our real unempoyment rate was 4% and that $20 billion had remained here in the U.S.?

[Toddsterpatriot]

Does everyone realize that our own unemployment rate, here in the U.S., (1) does not count the unemployed whose unemployment benefits have run out and who no longer are registered somewhere as actively seeking employment

Wrong.

The truth about unemployment stats (Thanks Mase)

[Wuli]

Not wrong, entirely.

According to the U.S. Department of Labor, Bureau of Labor Statistics, negative responses to all of the following questions (A) & (B) below, count the person neither as employed or unemployed.

(A) Employed:

(1)Did any work for pay or profit during the survey period, whether full-time, part-time or temporary or
(2)would have met either of those conditions except for, vacation, illness, child-care problems, other family or personal obligations, maternity, labor dispute or inclement weather.

(B) Unemployed:

Does not meet any of the employed conditions and:

(1)Had a job interview,
(2)Contacted an employer, employment agency, friend, relative, of school employment center about a job,
(3)Sent out a resume or job application,
(4)Answered a job advertisement,
(5)Checked a union or professional register, or
(6)some other active job placement acivity.

So if someone answers no to (1) - had not job interview, found no notice of a prospective job (4), after months of weekly checking with (2) did not recheck with them sduring the survey week, and thus found nothing new for (3), and is neither a professional or union member (5) and has tired of emploring friends, relatives and neghbors for help or suggestions (6) and has thus given up, they are not counted as "unemployed".

Now, maybe my use of the term "registered somewhere as actively seeking employment was too limited" (my Alzheimers from knowing the regs), but the spirit is the same - those who, for any number of reasons, are considered by the methods of the Department of Labor as not employed and yet not "actively seeking work" are not counted as unemployed. An unemployed person who has given up is not counted as unemployed.

[Mase]

those who, for any number of reasons, are considered by the methods of the Department of Labor as not employed and yet not "actively seeking work" are not counted as unemployed.

And just how many people can go that long without employment? Where does the money come from to survive? Why wouldn't they be looking for work? Maybe they're working at jobs under the table?

An unemployed person who has given up is not counted as unemployed.

Some people, especially those looking to sell books, believe that there are 5 million people in this country who have become so discouraged that they've quit looking for work altogether. Beyond the obvious ridiculousness of such a statement, one has to wonder just how these unemployed people survive without an income while the number of help wanted ads continues to grow.

Did you know the BLS also measures these folks? NR did a report on the falsehood of the perception that there are lots of discouraged workers out there. This is what they found:

The percentage of unemployed people who have given up looking for work is low, by historical standards, and has recently been dropping. We know this, because the Bureau of Labor Statistics, the same agency that counts the number of unemployed people, also counts the number of discouraged workers — or the number of people who have given up looking for work and say they have done so because they believe there is no appropriate work to be found.

Here's what the BLS found: Only about a third of a percent of American workers are classified in the "discouraged" category. That's right: Ninety-nine and two-thirds percent are not discouraged. This is hardly the teeming mass of employment despondency that we have been led to believe is out there.

The Myth of the Discouraged Worker

[investigateworld]

Take every gov't statistic with a grain of salt. While 1942 was a 'booming war production' year, the CCC camps remained open.

[VOA]

It praised Sweden for achieving average GDP growth of 2.7 per cent a year
since 1995, which it attibuted to deregulation and improvements in
private sector productivity.

Now there's a knock-out punch to deliver when some liberal is yammering
about how Sweden shows that socialism works so well.
You can just say "well, the Swedes seem to think that socialism has
run out of steam!".

[Wuli]

"And just how many people can go that long without employment? Where does the money come from to survive? Why wouldn't they be looking for work? Maybe they're working at jobs under the table?"

Among the no-longer-working "discourged", you could find:

A - 20 something, high school grad, laid off 18 months ago, living with parents because he/she and girlfriend/boy friend cannot afford to get a place and get married.

(I know two fellas and one young lady - all on Long Island - who fit this category).

B - 50 something downsized former manager, BA liberal arts 30 years ago, wife working at Walmart in order to help pay the bills and single 20 somehing daughter has moved back home to help with mortgage.

(two 50 something friends are considering super-early, super discounted start of pensions after two years of unemployment)

C - 40 something, widowed, grandmother, supporting one grandchild, laid off from garmet factory, surviving on meager survivor benefits of dead husbands meager pension, which until she lost her job was keeping the bank, the utlitity company and hunger at bay but with inflation and constant use of meager savings will not do so much longer.

(my sister-in-law in Abilene Texas has three females in her church in this situation, who the congregation is striving to keep off of welfare)

The fact that these types of cases indicate that not every "discouraged" worker is starving, does not change their status from negative to positive in terms of what they would prefer and what we should want to prefer the economy to be doing for them.

The question is not how good is the economy - in its gross, aggregate numbers. The question is who is it good for, who is it benefitting, who is not benefitting and why.

Force employers to fire the 12 million illegals and I bet every single one of the types of individuals I described above would have a job. Who is the economy benefitting, and who is it leaving behind?

The BLS figures about "discouraged" workers are based on answers to survey questions from a telephone poll (the same "employed" "unemployed" poll, and those in unfavorable situations are likely to provide the most subjective answers, which can overstate or understate their level of being "discouraged", influenced somewhat by how they, subjectively, want to portray themself. I would not rely on them, and the mere fact that there are no other direct source means to count them does not improve their reliability.