"Britain has lower unemployment
than Germany" (1997)
[I noticed this media fallacy in 1997. Numbers
of unemployed were used to compare unemployment rates
between two countries with different-sized populations. Most
reporters failed to spot this basic error. The following text
is from an article I wrote for In Business magazine
The much-reported rise, earlier this year , in the
number of German unemployed, might have presented an opportunity
to raise questions about mass unemployment in developed countries.
Unfortunately, with the British general election looming,
many UK politicians were more interested in presenting the
German unemployed figures as evidence of the economic failure
of European social policy they quickly proclaimed the
economic success of Britain in having "only half as
many unemployed as Germany".
When one looks at the rates of unemployment
in Britain and Germany, rather than comparing the total numbers
of unemployed, a different picture emerges. In Britain, 20
per cent of households are without a job more than
in Germany. It is misleading to compare numbers of
unemployed in different sized countries. Germany has a population
approximately 1.5 times that of Britain, and one must allow
for this in any comparisons.
At the beginning of 1997 the official jobless figure for
the UK was 1.9 million compared to 4.3 million in Germany.
So, even allowing for the larger German population, Germany
still looked worse off. This appears to contradict the above
data showing Britain with a higher rate (20%)
of unemployment than Germany. Unfortunately such contradictions
abound, due to the fact that there are several different ways
of calculating the jobless tally.
The official monthly jobless figure counts only those claiming
Jobseekers Allowance. This count of claimants
gives the lowest measure of unemployment, and is widely mistrusted.
In 1995, the Royal Statistical Society called for a
new monthly count to be derived from the Labour Force Survey
(LFS), which provides an unemployment count based on internationally
agreed definitions of what constitutes an unemployed jobseeker.
Although the LFS measure of unemployment is higher than the
official claimant count, it still excludes people on the margins
of the job market, who want jobs but are discouraged from
"actively" seeking work, as they feel there are
no jobs available.
The Employment Policy Institute (EPI), an independent
monitoring organisation, provides a measure of unemployment
which includes these "discouraged" jobseekers
it simply counts those who are unemployed and want a job.
Amazingly the current UK count of such people is well over
4 million (more than double the official claimant count).
The recent church report, Unemployment and the Future of
Work, endorsed the figure of 4.5 million unemployed in
the UK (as measured in mid-1996).
Another measure of unemployment provided by the EPI counts
households where no adult has a job (excluding student households
and those with retired householders). Although most counts
of unemployed individuals reflect the fall in unemployment
registered by the claimant count, there has been no corresponding
reduction in the number of jobless households. As mentioned
above, one in five British households are without a job
20 years ago the figure was less than one in ten. This measure
is probably a more accurate indicator of "social distress"
than the individual counts and, significantly, Britain rates
worse than Germany in this respect.
John Philpott, director of the EPI, has remarked that politicians
should consider why the number of jobless households remains
so high, even after four years of recovery in the labour market.
Perhaps they should also reconsider the fundamental relationship
between economic growth and unemployment in technologically
[2007 Postscript Prior to being elected
in 1997, New Labour promised to use a more accurate
(ie much higher) count of unemployment than the "claimant
count". But, too date, the "claimant count"
is still being used as the official count ie the figure
released to the media]