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Saturday, 30 October, 1999, 12:53 GMT 13:53 UK
Jobless: adding up the numbers
Is unemployment rising or falling? It depends on how you count
When the headlines tell us unemployment is at its lowest level for years, everyone hails it as good news.

But have you ever wondered how the government knows how many people are out of work? And who counts as unemployed? Does your neighbour, who hasn't worked for 30 years, count? What about those students on summer holiday? Who makes the rules?

The government's latest statistics show that the number of people out of work and claiming benefit fell in May by 6,500 to 1.28m.

The broader measure, which includes those who say they are looking for work but not claiming benefit, also fell in the three months to April. At 1.81m, it represents some 6.2% of the UK workforce.

The hidden unemployed

But the Trades Union Congress believes the real picture is different from that portrayed by these figures, because there are large numbers of "hidden unemployed".

More women than ever are working
This means that as the labour market has improved, people who previously did not bother looking for work start to think they, too, could get a job and count themselves as unemployed.

Most people in this category are men over 35, says TUC economic policy officer Soterios Soteri.

"When the market picks up, they feel confident enough to enter the labour force - that's what we're starting to see now. And that's why employment is going up but unemployment is also up," he said.

The TUC report also said many people without a job never bother to register as being unemployed - and therefore fail to show up in the statistics.

According to the unions, the French may have a higher unemployment rate, but they also have a far better job creation rate in the 1990s than the UK.

Meanwhile, more women are working than ever, both full- and part-time. And anyone on an official government training course is classed as in work, further enhancing the statistics of the employed.

It all means that the division between employed and unemployed is very fluid.

An 'open' method

In opposition, Labour had often attacked the monthly jobless figures claiming they were "fiddled" because they excluded large groups of people. The Conservatives had changed their calculation method several times.

In particular, who was eligible to claim unemployment benefit was changed by the introduction of the job seekers' allowance, which tightened up the rules for paying claims.

US unemployment rates are comparatively low
After coming to power last year, Labour changed the way it counted the unemployed. The new system includes those seeking work but not entitled to the job seekers' allowance. Jobless figures instantly jumped by about half a million and the government trumpeted the change as a move towards openness.

The new calculations are based on the Labour Force Survey, an internationally-recognised method of counting unemployment, which comes from the Geneva-based International Labour Organization. It includes large groups of people who are not eligible for benefit, such as women whose husbands are in work.

And it is based on survey evidence collected from government questionaires, not the exact numbers who turn up in a benefit office.

Different countries of the world traditionally have high or low jobless rates - Europe's appear high, while America's are low. The US jobless proportion, which has been on the decline, now stands at 4.2%. Japan's rate was 4.8% at the last count. By contrast, the French figure, 11.5%, is one of the highest in Europe.

The ILO guidelines are agreed at conferences held by government statisticians from different countries. No nation is obliged to use them but many do, so that they can compare their jobless levels with others'.

Three criteria are used to define someone as unemployed: they must not be working during a reference week; they should be available to work during that week and they should actively have sought work.

Different definitions

But the problem is that every aspect of the guidelines are interpreted differently in each country and even within different regions of countries, according to ILO statistician Adriena Mata.

Spain, for example, takes a measure every week of the year and averages it out, whereas France only measures a month. And some countries allow much looser definitions of searching for work - some say looking in a newspaper is enough, others say someone must have visited a jobcentre.

Even New Zealand and Australia do not apply the guidelines in the same way.

"Perfect comparability is impossible because every country has its own idiosyncrasies," says Mme Mata. "The EU countries are most comparable but even then, if you ask a Greek man and an English man the same question, it will be interpreted differently."

In the UK, the calculations are based on both records of job applicants and household surveys. Other countries also use questionnaires - but they are not all worded the same.

As a result, she says, there are as many different ways of counting the jobless as there are countries in the world.

See also:

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