Wednesday, May 25, 2005

Fuzzy math?

I was thinking more about Krugman's claim, and something dawned on me.

Over the past 25 years the lives of working Americans have become ever less secure. Jobs come without health insurance; 401(k)'s vanish; corporations default on their pension obligations; workers lose their jobs more often, and unemployment lasts much longer than it used to.

Krugman is claiming both, that people are becoming unemployed more often, and when they are unemployed they are unemployed for a "much" longer period of time. For both of these statements to be true, wouldn't it also be true, one could even say required, that unemployment was not only increasing, but increasing at an exponential rate? This is quite clearly not happening.

UPDATE: On DeLong's site a poster commented that this unexplained phenomenon was caused by a decrease in the participation rate. Although this, if large enough could theoretically explain it, the fact is the participation rate is up significantly over the time period in question. Unfortunately my post was deleted from the site, apparently the free speech movement at Berkeley does not extend to contradicting liberal economists, but here is the data courtesy of the BLS.



UPDATE: DeLong, or someone acting on his behalf, edited my orginal post on his site, deleting some of my text and inserting the following, rather condescending, and factually incorrect remark.

[The "lose their jobs more often" makes a distinction between temporary layoffs and permanent dismissals that you are missing. Paul's fine here.]

First of all, there is nothing in "Paul's" language to indicate he is specifically referring to temporary layoffs versus permanent layoffs, which would be the more common usage of the term, especially since he then mentions the duration of unemployment as increasing, but even if you go to the BLS and look, you find that DeLong is in fact wrong. Temporary layoffs, even in real terms have been going down, relative to the labor force it would be an even larger drop.

Series Id: LNS13023653
Seasonal Adjusted
Seasonal Adjusted
Unemployment Level - Job Losers on Layoff
Labor force status: Unemployed
Type of data: Number in thousands


Maybe I am looking at this wrong, but I can't come up with any way of making that look like it is going up. But then again I am not a distinguished economics professor, so maybe there is some subtlety that I am "missing".

Roland Patrick also makes a similar point here. I am not expecting a correction, he will probably just delete the evidence.

2 comments:

Roland Patrick said...

It's truly impressive that you've managed to survive the Semi-Daily Journal comments purge editor. Usually, refutations as solid as yours disappear.

Roland Patrick said...

Hah, I spoke too soon. J Bradford Scissorhands has now deleted your rebuttal of spencer's claim that labor force participation is lower today.