In the old days of the seventies our national unemployment statistics used to be based upon the number or people claiming an unemployment benefit from the then DSS and at some point a bright spark in government decided that instead of using that empirical measurement of those who are self-identifying as “unemployed” they would use a supposedly better system of statistical sampling. Frankly I was unconvinced when this change was made and I recall discussing the change with my late father who was equally scathing and of the opinion that it was just a blatant attempt to manipulate the public perceptions of the level of unemployment. Over the subsequent years since the change I have shared my cynicism about the statistics many times but this little snippet from the Age shows just how right I am to distrust such things
Each month the bureau surveys about 29,000 homes. One-eighth of the group, about 3600 homes, leave the survey each month and a new 3600 are ”rotated” in.
Rarely, usually only once every one or two years, employment conditions in the new homes are quite different to those in the old. When that happens, the official employment numbers jump (or fall) even if employment itself hasn’t changed.
The houses rotated in in February were extremely different to the houses rotated out. So different that the bureau believes the rotation itself was responsible for half of the reported 71,500 surge in employment, the ”best monthly job creation result in 13 years”.
Bureau staff briefed government officials Thursday morning
Another unusual occurrence ”amplified” the error.
To convert its survey into answers for the entire population, the bureau multiplies the result by a number based on its guess of the population. Its best guess is that Australia’s working age population rose by more than usual at the start of this year as a greater than usual number of foreign students arrived.
It reckons this further exaggerated the already-exaggerated employment growth, perhaps by another 13 per cent.
It would prefer people to look at its estimate of what it calls the trend. This shows employment climbed at a sedate pace of 11,600 in February, much less than 71,500, and just enough to keep pace with population. The unemployment rate remained steady at 5.4 per cent.
Cue the usual suspects
- A Good Employment Report This Month; A Bad Labor Market (delong.typepad.com)
- The Global Economy Is A Giant Ponzi Scheme (theglobalmail.org)
- The myth of the “welfare scrounger” (newstatesman.com)
- Unemployment rate tipped to rise (news.theage.com.au)