Saturday, March 7, 2015

Time Out for some Fun - Abbot and Costello on Unemployment Reporting

Every now and then we take a break from all the serious stuff to run a fun blog post. I come across a lot of information while doing research on the internet to write articles here. This one I saw on Jim Sinclair's web site (JS Mineset). It's a tongue in cheek take on the way the US Labor Department calculates the unemployment rate. It's based on the old Abbot and Costello 'Who's on First?' routine. For our younger readers who may have no idea what that is, you can see the original 'Who's on First' routine here

Below is a very funny version adapted for US unemployment reporting sent in by a reader to Jim Sinclair. This is a little dated, so the actual rates unemployment rates are different. But, as noted in the Indianapolis Business Journal article linked above, there really are two different kinds of "out of work" people:

"The U.S. unemployment rate fell to 5.5 percent from 5.7 percent, the government said Friday. But the rate declined mainly because some people out of work stopped looking for jobs and were no longer counted as unemployed."


Believe it or not, this gives you one of the best explanations of the current unemployment stats:
COSTELLO: I want to talk about the unemployment rate in America .
ABBOTT: Good Subject. Terrible Times. It’s 7.8%.
COSTELLO: That many people are out of work?
ABBOTT: No, that’s 14.7%.
COSTELLO: You just said 7.8%.
ABBOTT: 7.8% Unemployed.
COSTELLO: Right 7.8% out of work.
ABBOTT: No, that’s 14.7%.
COSTELLO: Okay, so it’s 14.7% unemployed.
ABBOTT: No, that’s 7.8%.
COSTELLO: WAIT A MINUTE. Is it 7.8% or 14.7%?
ABBOTT: 7.8% are unemployed. 14.7% are out of work.
COSTELLO: If you are out of work you are unemployed.
ABBOTT: No, Congress said you can’t count the "Out of Work" as the unemployed. You have to look for work to be unemployed.
ABBOTT: No, you miss his point.
COSTELLO: What point?
ABBOTT: Someone who doesn’t look for work can’t be counted with those who look for work. It wouldn’t be fair.
COSTELLO: To whom?
ABBOTT: The unemployed.
COSTELLO: But ALL of them are out of work.
ABBOTT: No, the unemployed are actively looking for work. Those who are out of work gave up looking and if you give up, you are no longer in the ranks of the unemployed.
COSTELLO: So if you’re off the unemployment roles that would count as less unemployment?
ABBOTT: Unemployment would go down. Absolutely!
COSTELLO: The unemployment just goes down because you don’t look for work?
ABBOTT: Absolutely it goes down. That’s how it gets to 7.8%. Otherwise it would be 14.7%.
COSTELLO: Wait, I got a question for you. That means there are two ways to bring down the unemployment number?
ABBOTT: Two ways is correct.
COSTELLO: Unemployment can go down if someone gets a job?
ABBOTT: Correct.
COSTELLO: And unemployment can also go down if you stop looking for a job?
ABBOTT: Bingo.
COSTELLO: So there are two ways to bring unemployment down, and the easier of the two is to have people stop looking for work.
ABBOTT: Now you’re thinking like an Economist.
COSTELLO: I don’t even know what the heck I just said!
ABBOTT: Now you’re thinking like a Politician.

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