Quotulatiousness

November 28, 2013

What’s the real US unemployment rate?

Filed under: Economics, Government, USA — Tags: , — Nicholas @ 11:44

Statistics can be very helpful tools in analysis, but the quality of analysis will depend on the accuracy of the statistics. In the US, the organization responsible for compiling the unemployment numbers is the Bureau of Labor Statistics (BLS). They actually compile several different categories of unemployment data, only one of which is commonly used by the media: the U-3 unemployment rate. Wendy McElroy explains why this may be a very misleading number:

The Bureau of Labor Statistics (BLS) compiles the United States’ unemployment statistics every month. It looks at six categories of different data, that are called U-1 to U-6. U-3 counts how many people were unemployed but were actively looking for work during the past month; this is the official unemployment rate that is broadcast by the media. By contrast, U-6 counts the unemployed and underemployed who are excluded from the U-3 data. For example, U-6 classifies people who have unsuccessfully looked for a job in the last year as “not participating in the labor force” rather than as unemployed. U-6 also includes part-time workers who need more employment in order to live, but the number of these workers is dwarfed by the number of long-term unemployed. (“Long-term employment” is defined as lasting 27 weeks or more).

The data included in the categories increase as the numbers ascend; the categories are defined as follows:

  • U-3 Total unemployed, as a percent of the civilian labor force
  • U-4 Total unemployed plus discouraged workers
  • U-5 Total unemployed, plus discouraged workers, plus all other persons marginally attached to the labor force
  • U-6 Total unemployed, plus all persons marginally attached to the labor force, plus total employed part time for economic reasons

What is America’s real unemployment rate? According to U-3 for October 2013, 11.3 million people were officially unemployed. BLS adds that 91,541,000 working age people did not participate in the labor force. If these numbers are added together, there are 102 million working age Americans who are either unemployed or not in the labor force for reasons that are not clear; for example, they could be retired. The non-working population represents 37.2% of working age people.

(Note: it is not known how the federal furlough of employees during the October shutdown affected the data, if at all. The furloughed employees seem to have been counted as both unemployed and working because they eventually received full payment for the time off.)

The unemployment rate reflected by the last four categories of BLS data break down as follows:

  • U-3 = 7.3%
  • U-4 = 7.8%
  • U-5 = 8.6%
  • U-6 = 13.8%

The American media used the U-3 numbers and reported the unemployment rate for October to be 7.3%, which is about 1/2 of the more realistic U-6 total. The media also glossed over U-3 figures that were alarming. For example, the official rate for teen unemployment (16 to 19 years old) stood at 22.2%; black unemployment is 13.1%

Colby Cosh on Obamacare’s international ripples

Filed under: Cancon, Government, Health, USA — Tags: , , — Nicholas @ 11:12

You’ll have guessed from the tone of my Obamacare links and comments that I didn’t think it was a good idea from the start and it’s been a great example of how not to implement a major government initiative. That said, it’s a sure bet that Obamacare will have influence on other countries as they consider their own health programs. Colby Cosh is surprised that the scandal-addled Canadian media hasn’t been paying more attention to the Obamacare train wreck as the wheels fall off in all directions:

Obamacare isn’t going to make major systemic change in either direction look more appetizing to Canadians. That’s an important Canadian angle right there. Not long ago it looked as though national pharmacare was likely to become an election issue here, quarterbacked by the NDP and perhaps the Liberals, too. The concept has plenty of support among economists and other health policy experts—the same class of kindly boffins that, in the U.S., lined up almost unanimously behind the Affordable Care Act.

For better or worse, nationalizing prescription-drug insurance seems likely to be a much tougher sell here in the immediate future. Any large, complex health care experiment will be. The more wise heads support it, the easier it will be for supporters of the status quo to shout, “Unintended consequences! Ivory-tower tomfoolery!” Indeed, political strategists may already be saying it to themselves.

American commentators are already starting to wonder if Obamacare’s difficult start and increasingly troubled prospects may end up as a victory for small-government conservatism. The problems for the program do not end with the calamitous state of the federal insurance-exchange website, or even with the nasty surprises handed to the self-employed and freelancers in the “individual market” who were falsely promised: “If you like your plan you can keep your plan.” Some Obamacare buyers are finding themselves shut out from their preferred doctors and hospitals; employers are junking non-compliant health plans; and many in the middle class who liked the Obamacare concept are facing sticker shock.

[…]

The redistributive aspects of Obamacare were undersold, and possible pitfalls obviously not foreseen. The neoliberal Democrat Walter Russell Mead put it neatly the other day: “President Obama may be the Democrat who ends up convincing millions of American millennials that Ronald Reagan was right, and that the progressive administrative state is neither honest nor competent enough to solve the problems of the American people.” If that is the case, the effects cannot be confined to the U.S.

The equine Range Rovers race

Filed under: Britain, Sports — Tags: , — Nicholas @ 09:02

Published on 24 Nov 2013

Five Clydesdale shire horses have taken part in a charity race at Exeter racecourse.

The horses thundered down the home straight with the aim of promoting the breed, which has been given “at risk” status.

The horses took part in the Devon Air Ambulance charity race 35 minutes before before the day’s main racing and were ridden by professional jockeys.

The two furlong race was won by Tom Parker, ridden by Michael Nolan.

Poking holes in the proposed Scottish defence plans

Filed under: Britain, Military — Tags: , , , , — Nicholas @ 08:07

Sir Humphrey says he’s neutral on the political issue of Scottish separatism, but he has a few professional criticisms of the fleet plan contained within the white paper:

At a most basic level, the paper appears to fall foul of what can be described as the ‘fantasy fleet’ syndrome so often found on the internet. In other words, people have taken an order of battle, hived of a reasonable sounding level of equipment and assumed that this would make a good defence force. That’s a great theory, but in reality its likely to be far more complicated than this.

For starters, the British Armed Forces are the product of hundreds of years of evolution, procurement and support. They operate a closely integrated set of equipment, underpinned by a well developed training network, and supported by a very complex set of support contracts to ensure availability. Due to the numbers and amounts of equipment in service, costs can be calculated using economies of scale, and planned workflow, in a way that smaller sized support cannot.

A nascent SDF would find itself operating a truly eclectic collection of units which are not necessarily the most appropriate for its situation. For instance, the proposal that the Navy takes on two Type 23 frigates seems a little odd. The Type 23 is one of the worlds most advanced anti-submarine warfare escorts, and designed to be a submarine killer par excellence. To use it to best effect requires a well trained crew, who have a range of extremely specialised skills. Assuming that no one is forced at independence to join the SDF, the challenge will be recruiting and retaining a core of niche skills to actually employ the vessel in her intended manner. This includes the engineers, weapon systems maintainers, the warfare department and those with the skills and experience at all ranks and rates to use the vessel in its intended manner.

[…]

Similarly, the issue of maintenance will be a complex one. There are no T23s based in Scotland, which means that a great deal of money will be spent creating a permanent support facility for the class in Scotland. In these circumstances the SDF will need to negotiate and establish support contracts, similar to the ones used by the RN, and pay to put in place the complex web of support arrangements in order to keep the vessels available for service. In a small procurement and support budget, it is hard to see where the money will come from for this sort of activity.

The sheer running costs of the vessels will also be a challenge — on average it costs about £20 million per year (source THEY WORK FOR YOU) to keep a Type 23 at sea, and about £3 million for MCMVs and patrol craft. To keep the Scottish Navy afloat, you are looking at an annual running cost of around £60 million — before you consider salary costs of the crew and the shore support infrastructure to go with it. On a relatively small budget of £2.5 billion, it is easy to see how much of a cost it would be just to keep the ships at sea, let alone deploy them.

In a sense, the white paper’s defence plan does appear to have been drawn up with an eye toward “order of battle” and “table of equipment” that would create — on paper, anyway — a scaled-down version of the RN, RAF, and British army. That isn’t the sensible approach for an independent Scotland’s defence needs. The first thing they should have done is analyze what practical tasks their defence forces would be required to undertake, then consider the most cost-effective way to build and equip an organization to accomplish those tasks.

When I was a child, I was obsessed with toy soldiers. I had hundreds and hundreds of them from various eras from Roman versus Celt down to 8th Army versus Afrika Korps. When setting up my “battles”, it was always the soldiers with the cool kit who got to be the heroes: stirring combat poses and cooler weapons were my selection criteria. When I moved on to building models, the same characteristics dictated the particular models I built: more heavily armed ships, bigger tanks, more weapon-studded aircraft. The authors of this portion of the white paper appear to have had similar childhoods … and they’re still influenced by the same selection criteria. What sense does it make for Scotland’s defence forces to operate Type 23 frigates and Typhoon aircraft? They’re cool kit, but do they accomplish the primary protective duties for Scotland cost-effectively? Almost certainly not.

Scotland has a large coastline and significant offshore assets to protect, but it isn’t likely to need the hugely expensive (and admittedly very capable) kit that the Royal Navy and the Royal Air Force need to accomplish their wider tasks. Scotland’s navy is much more likely to end up resembling a strong coastguard than a battle fleet, and their air force will probably not be equipped with top-of-the-line fighter aircraft (especially not F-35 or Typhoon fighters) as they would eat a hugely disproportional share of the defence budget for capabilities the Scots don’t actually need.

I strongly suspect the best course of action for Scotland (in the event of a successful independence vote) would be to negotiate a short-to-medium term deal with the rest of the UK to provide military units to Scotland as an interim solution while a sensible Scottish organization was built-up to take on those roles. It might sting the pride of nationalists to admit that they can’t afford to take on the full trappings of an independent state immediately, but it would be far more practical (and far less expensive) than carving off “their share” of the UK’s existing military.

QotD: The gun-control debate

Filed under: Law, Liberty, Quotations, USA — Tags: , , , , — Nicholas @ 07:44

I begin rather skeptical of most gun-control proposals. The ones that are pitched in the aftermath of mass shootings are particularly cynical, as they often attempt to regulate circumstances unrelated to the shooting. I still grind my teeth at Mayors Against Illegal Guns running ads in my state citing the Virginia Tech shooting, and talking about the need to shut the “gun show loophole” — even though the shooter didn’t obtain his weapons at a gun show. These sorts of arguments strike me as one part craven opportunism, one part feel-good placebo. (I wanted to say “panacea,” but panacea actually means a genuine cure-all.)

If someone wants to propose a new restriction on gun ownership after a tragedy, and cites that tragedy as a reason to pass it, it’s necessary to show how that new restriction would have prevented, mitigated, or impacted that tragedy. For example, almost none of the gun laws proposed after Newtown would have changed much of anything in that awful shooting, as that disturbed young man stole his mother’s legally purchased guns.

I suppose there are two potential changes to the law that would have significantly altered events in Newtown. First, a total ban on private ownership of firearms, which our friends in the gun-control movement keep insisting isn’t their goal.

Second, a restriction on gun ownership by people who live under the same roof as a person who’s deemed mentally incompetent or a threat to himself or others. Of course, then you get into the questions of what constitutes, “mentally incompetent or a threat to himself or others,” what constitutes “under the same roof”, etc.

Then there are the proposals to limit how many rounds each gun can fire before reloading. Almost every spree shooter — we need a better term for this — has had more than one firearm when they’ve launched their attacks. Instituting 10-round limits would mean that future shooters would get off 20 shots before pausing to reload, presuming they only brought two guns. It’s reasonable to conclude future mass killers will just bring three or four guns when they begin their rampage. This strikes me as a quite modest mitigation in the danger of these shooters, too modest to seriously consider.

Jim Geraghty, “Why Post-Shooting Gun-Control Debates Are So Insufferable”, National Review Online, 2013-09-18

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