I think I came up with a better employment level indicator (discussion)

[bradm]

I remember reading somewhere that, back in the 1970s and 1980s, British governments redefined who was defined as "unemployed" someting like 14 times. And each time, the resulting unemployment rate that used the new definition went down.

Consider that, in most defintions of the unemployment rate, people that have given up looking for work aren't counted as being "unemployed." If you're looking at the unemployment rate as an indicator of the level of competition you'll face when trying to find a new job, it makes sense (because people who aren't looking for work won't be applying and competing for jobs), but when comes to an indicator of how the economy is doing, it falls flat. It falls even flatter because it doesn't take into account under-employed people, or people who left high-paying jobs only to take lower-paying jobs.

I wonder if just measuring the total amount of wages paid in a society (or an industry, or a single company, or a particular geographical region) might be a better economic indicator. (We could also expand "wages" to include things like health benefits and even bonuses.) It should be easy to calculate (especially for public companies, or even from tax records), is a great indicator of trending (consider an industry whose total wages are increasing year over year versus an industry whose total wages are decreasing year over year), and works in unit$ that people can ea$ily under$tand.

Your thought$ would be appreciated.

Aloha,

Brad

Edited March 19, 2009 by Guest
Thanks, YT.

[SaggyBalls]

I can't believe you spelled it imployed.

Underemployment is crucial to take into account and the total wage factor would skew the results when the super rich overshadow it all.

I think you're onto something, but intead of a total go-to it should be a factor as an overall indication system that would take into account demand for social safety net services like homeless shelters, food banks, second hand shops, and job banks.

How would these help Canada to be a truly self-sustaining country?

To be ultimitely fair, there is absolutely no good reason that we're not the most thriving country in the world, rather than the least effected in the G8. There's still poverty, illness, and severe social ails that hold us back. I know we have a lot going for us here in Canada but it's really not enough.

We need to be able to understand how this country can improve most efficiently, and an overhaul of employment and effectiveness indication would probably help a lot.

[bradm]

I can't believe you spelled it imployed.

I can think economically, or typographically, but not necessarily both at the same time.

Underemployment is crucial to take into account and the total wage factor would skew the results when the super rich overshadow it all.

I'm not sure it would, and even if it did, that's still a measure of how much (spendable) value is being bestowed on a segment of the population for the results of services rendered. (I'd also include benefits from the exercising of stock options in the "wages" category, for the same reason.)

I think you're onto something, but intead of a total go-to it should be a factor as an overall indication system that would take into account demand for social safety net services like homeless shelters, food banks, second hand shops, and job banks.

Agreed, and I didn't mean it to be "the one" statistic. For example, the same statistic, but calculated based on social support (welfare, employment insurance benefits, food stamps, shelter services received, etc.) would also be useful, especially when compared to the "wages" statistic. (In one sense, "wages + received social benefits" is also a valuable measure, as it covers the total amount of money flowing through consumers' hands. I think, though, that most would agree that, for a given total amount of "wages + received social benefits", the bigger the chunk of it that's "wages", the better.)

How would these help Canada to be a truly self-sustaining country?

I was thinking that comparison of the "total wages" stat, either year-by-year, or this segment of society compared to that segment of society, could be used to guide policy, and measure results (e.g., a multi-phase corporate bailout package, that had built into it minimum levels of "total wages" paid [or minimum changes in levels] as approval criteria for each phase's payout).

We need to be able to understand how this country can improve most efficiently, and an overhaul of employment and effectiveness indication would probably help a lot.

What kicked off this idea for me was a newscaster whose piece wasn't about what the umemployment rate was, but the quirks about how it was calculated. It's great that they aired the explanation, but a bummer that it was needed in the first place.

Aloha,

Brad

[SaggyBalls]

If we start gauging the strength of our economy by the total wages, the economic divide will only widen.

I really do hope Canada can tackle the plagues of underemployment and weakening a middle-class.