“While lower unemployment is better, it’s hard to see why a country with a decent minimum wage, strong union movement and good social welfare systems would want to scrap those things to achieve a one percentage point reduction in unemployment.”

That’s a bit regressive, isn’t it? The unemployed are those at the bottom. Those who can find someone to pay them that higher minimum wage, or who can get a union job are likely to be higher skilled and better off than those who can’t, no? Not to mention that European youth unemployment rates are through the roof. I.e., the overall 1-2 point difference conceals a much greater disparity for those trying to get their working lives started.

Not unless you can figure out which effects are which. And John appears to be suggesting the prison population is having a particular effect (though I’m not sure exactly what effect). Is it that the US economy couldn’t have prisoners work if they were free?

Yes, because a massive prison population is the marked of a civilised, compassionate society, like Belarus or Turkmenistan.

In other words: lolwut

Are there good statistics on relative ages in EU vs. US workforces? My impression has been that it can be more difficult to get your foot in the door as a young person in the EU, whereas, in the US, it only takes one layoff in your 50s to make you permanently unemployable. (With the result, of course, that a bigger chunk of US employees are young, low-waged and lacking benefits.)

“Whether we like it or not – or even whether many people have thought much about it or not – the numbers clearly suggest that we are headed in a more
European direction…As entitlement spending rises over the next decade, we will become even more French;”

I mean: Even more French! Mon dieu! Soon they will be serving pommes de liberté in the Congress ’ bistro.

On your specific suggestion of looking at employment rates, Laurent Guerby in the thread on labour market flexibility was making this point from the opposite direction. A lot of EU-15 countries do better on this measure, relative to the US, than on unemployment. That’s partly because the US, while not matching the Netherlands, has a relatively high number of workers on disability.

As I said in response to Laurent, the equation Employed+Unemployed=Population, is pretty much valid for prime age males (since they don’t tend to engage in education, child-care or self-financed retirement), but not for other groups. I’d be happy to take the bet for prime-aged males, if that’s more acceptable. But of course, I would still want the base to be the entire population, with prisoners not counted as employed. I don’t find your counterclaims on this point at all convincing.

@sto
needs more irony or people will think your serious…

I don’t have that in me. People who take terms like “socialist Old Europe” seriously (and I am painfully aware they exist, cf. the link in my post), will require so thickly applied irony as to bury the intended point in ick.

Yes, there is a reasonable argument to be made that some adjustment for prison population is in order. There is also a reasonable argument to be made that no adjustment for prison population should be made. That the U.S. economy is productive enough to support all those extra people in prison (where their upkeep costs considerably more than they would likely earn in the labor force), thereby improving the quality of life of its non-criminal citizens, and still manages to afford its citizens a higher standard of living than any large European nation, should arguably count as a point in the U.S.’s favor, no?

In any case, there are reasonable arguments to be made for all sorts of other adjustments too. For example, several European nations suppress their unemployment rates considerably by classifying an inordinate fraction of their population as “disabled”—the Netherlands is a prime example. You have cherry-picked one adujustment that happens to help your case.

If you are so concerned about the validity of cross-country comparisons of unemployment rates (and there are good reasons for concern, dispite the fact that your reasons are entirely self-serving), I suggest that you avoid unemployment classifications entirely and simply compare the fraction of the working-age population that is employed.

http://www.bostonreview.net/BR27.2/wacquant.html

The other exception is EITC. But both the income threshold and dollar amounts are extremely low for non-elderly, non-disabled childless adults (annual benefits top out at about $500) and, obviously, you have to be employed.

No, it’s a specific term in labor economics that refers to a theory of labot market partitioning. See e.g. this book . It’s often claimed that the cause of such partitioning is either inflexible labor market institutions like firing restrictions or unions, but on the left the claim can be that either prejudice or the mechanics of workplace hierarchy can cause this partitioning. Quiggin seems to be claiming that labor market flexibility can itself cause a form of partitioning, which is an interesting claim that could be pursued mathematically.

If the question is whether there is sufficient growth to employ the whole labor force, then yes, you should correct for prison population—but you should also correct for lots of other differences in the size of the labor force. Seems simpler to just cut that Gordian knot and focus on the employment-population ratio instead. More importantly, that’s really a question about effective demand (ok, and innovation), it’s only incidentally about labor market institutions.

On the other hand, if the question is about what level of unemployment is needed to maintain work discipline, restrain wage demands/inflation, and so on, along Kaleckian or efficiency-wage lines, then you are very much talking about labor-market institutions. And then unemployment as such really is the relevant variable, but prisoners aren’t relevant—since they can’t work, they don’t affect the bargaining power of labor.