The brouhaha between Kathy G. at TNR, Megan McArdle at The Atlantic and Reason’s Michael Moynihan over Swedish unemployment figures highlights to me the dangers of taking points made in political discussions internal to other countries and trying to use them to score political points in your own country. Moynihan writes that all sides in Sweden “mock” the official unemployment figure of 7 percent, and that a McKinsey report in 2006 estimated the “true” unemployment figure in 2004 at 15 to 17 percent. But what would such a McKinsey analysis find for the US’s “true” unemployment figure? Economist John Schmitt of the Center for Economic and Policy Research has done the math, and it comes to 13.8 percent:
To arrive at the 15 to 17 percent “de facto” unemployment rate, McKinsey included “people who don’t work, even though they should be able to” in the pool of the unemployed. The analysis reported here accepts the McKinsey methodology and applies it to the United States. The resulting “de facto” unemployment rate for the United States is 13.8 percent, compared with the 5.5 percent official U.S. unemployment rate, and the estimated 15.5 percent “de facto” Swedish unemployment rate.
There is clearly an internal political debate in Sweden over unemployment, and that is generating a lot of stories about how the official employment rate underestimates real unemployment. But you can’t use talking points thrown off by that Swedish debate in your very different American debate unless you first go back and look at the underlying data and compare it. Otherwise you end up with nonsense like the claim that the French health-care system is “unsustainable”, pulled from French headlines, when in fact their system is in far better fiscal health than the US’s Medicare and Medicaid.
3 Comments so far
Leave a comment