Prometheus 6: The Economy vs Quality of Life

December 02, 2003

The Economy vs Quality of Life

In the comments to What was that unemployment figure again?, buermann of Flagrancy to Reason said:

I noticed this one too. If you make a rough estimate of people who are looking for work or would be looking for work if they thought there was anything to find (long term unemployment generally gets you thrown out of the "labor force" statistics) you get a rate of around 12%: that's without taking into account moving the military into the labor force under Reagan or taking into consideration the ever expanding prison population. The wierd thing is that while currency statistics are always adjusted for inflation, but nobody seems terribly interested in adjusting historical unemployment figures. This does seem to help explain the "miracle" of the late 90s' combined low unemployment and inflation rates, on the other hand.

The thing is, historical unemployment figures HAVE been adjusted. This past summer. The whole method of calculating them was changed, and comparisions have been made against them since that time as if the figures lay immutable since the birth of the nation.

And the past isn't the only used to make today sound better. On Dec 1, the NY Times reported Manufacturing at Highest Level in Two Decades. What a turnaround from the gloom of the last few months, eh? Well, it's orders being reported.

In the latest good economic news, the Institute of Supply Management reported that its November survey of purchasing managers showed a surge in new orders and a big jump in production in almost every industry. The institute said its overall index of manufacturing activity climbed to the highest level since December 1983, an increase much greater than most economists expected.

And they say

But the bigger surprise was that manufacturers showed a wider readiness to hire workers after three years of reducing factory payrolls.

Readiness. No hiring yet.

The very nature of manufacturing has changed such that there is a world-wide reduction in manufacturing jobs. And they got all these orders…of course there's a wide readiness to hire. If it become necessary. And if automation and productivity increases can handle it, it won't be necessary.

But The Economy, it'll look better and better.

Let's be real. How well does The Economy track with the quality of life around these parts?

Posted by P6 at December 2, 2003 08:35 PM | Trackback URL: http://www.prometheus6.org/mt/mt-tb.cgi/2409

Comments

Nathan Newman pointed out that even the figures for more business purchasing are a sham. He's been doing a whole series of posts on whether growth is real that's well worth reading.

Posted by at December 2, 2003 09:41 PM

Quality of life... P6, that is quickly becoming irrelevant. All that matters now is a percent value. Percents ain't worth a damn when you livin' bad.

Posted by at December 2, 2003 10:02 PM

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Read more in Letter of the Day, N »

Technically Speaking Dec 3, 2003 12:42 AM

Avedon:

Thanks. I haven't gotten back to Nathan Newman since my bad news vacation ended.

I read the report the Times referenced and felt it was kinda shady but to be honest I don't have the economics background to pick it apart. Nathan's join is a necessary stop tomorrow.

S-Train:

That pretty much sums it up. We're picking statistics that are supposed to represent what is actually happening and wagging that dog to death.

Like housing starts. Increases in housing starts is a sign of healthy economic activity. But it doesn't create healthy economic activity. Yet we been building houses like that's all we need to do. Good jobs for a bunch of folks, but what happens when we run out of people who can afford these houses?
I'm waiting for the housing bubble to collapse.

Posted by at December 3, 2003 12:44 AM