Wednesday, August 1, 2012

1/8/2012: Live Register - Hidden Unemployment Rising

There's a boisterous chatter in the Irish media (unwilling to have any reality voices on the air anymore due to reasons unknown) about the latest headline numbers coming out of the Live Register for Ireland (July 2012 data released today).

Some of it is part-true. Some of it is part-spin. None of it is fully true. So in the next couple of posts I will be uncovering what the figures really do tell us. Stay tuned.

Let's start from the headline numbers:

  • Standardized (Live Register-implied) unemployment rate remains intact at 14.8% in July, same as in June. The SUR is now between 14.7% and 14.8% every month since January 2012 and 14.8% is the highest point reached since the beginning of the crisis (hit first in February 2012). So headline story is: Irish Unemployment Remains at Record High for the Crisis.
  • Last time we had 14.7-14.8% unemployment as measured by the Live Register was back in March-April 1994. Oh, that's right, 1994! Good news, folks, I guess is that it is still off 17.0 absolute record achieved back in December 1986-January 1987, though with a major caveat (see below).
  • Want more 'good news'? Ok: crisis period average SUR is 13.5% and STDEV is 1.33, which means that the current rate of unemployment is more than 1/2 STDEV above the crisis period average.
Chart to illustrate the good news:

Bet you your local friendly radio presenter and their guests didn't mention the above, in fear of undermining your confidence in the economic turnaround.

But, hey, let's keep looking into the data:
  • Overall numbers on Live Register (seasonally-adjusted) are currently at 437,300 (July) down 9,900 on July 2011 (-2.214%). This is good. M/m decline in July 2012 is 2,300 which contrasts with m/m rise in June of 2,500. Which is sort-of good: m/m decline is a good thing, m/m decline that doesn't fully offset previous m/m rise is not so good.
  • Y/y June 2012 LR posted a decline of 6,200 (-1.39%) and this is now bettered by July decline of 9,900 (-2.21%). Which is good.
  • 3mo average LR through July is 0.13% higher than 3mo average through April 2012. Not so good. Year on year, 3mo average LR is 1.77% lower in July. Which is good.

So the above is a mixed bag story. Yet, the story is hardly complete. You see, there are some 76,533 workers out there who are 'engaged' in State-sponsored Live Register Activation Programmes. The CSO has the following to say about them: "Persons on activation programmes are not counted as part of the monthly Live Register." Ugh? That's right - they get paid LR supplements. They don't work for actual pay. They are not unemployed and are not in receipt of state unemployment benefits. Let's add them to the LR, shall we?

Taking into account the numbers engaged in the LR Activation Programmes:
  • There were 513,833 individuals in Ireland on LR as of June-July 2012 (note, Activation Programmes participation is reported with one month lag, just to make life hell for anyone trying to compile real figures).
  • The above number represents an increase m/m on June's 501,516 (some 12,300 up). Year on year, the number of those in receipt of LR benefits is now up (not down) 1,680 (+0.33%) and that is worse than June y/y figure (up 1,429, or +0.29%).
  • Recall that official Standardized Unemployment Rate is 14.8% on 437,300 LR recipients. This implies that counting those in Activation Programmes the real 'unemployment' rate is around 17% (17.4% more precisely, but there's a grey area of estimation errors around there).
  • So the main headline, really, should be - total (official + hidden) unemployment in Ireland is up m/m and up y/y. Not down. Up!

Now, do me a favour (cause I can't find time to do this myself) - check with your local friendly radio / TV station and press - see if any of the 'incisive' analysts/guests/hosts/editors/journalists give you that sort of a breakdown on the numbers? 

Now don't take me wrong - some of these programmes are good, and it is generally positive that people are drawn to them. But until they gain full paying jobs post-completion, they remain unemployed. The Government has no right to write them off as 'not unemployed' by excluding them from the LR.

No comments: