The Public Policy / Deflating Unemployment Statistics
Clarkson, Kenneth W. & Meiners, Roger E.
"The Public Policy / Deflating Unemployment Statistics" be returned is certainly explicable. Israel's reluctance to accede to this demand is perhaps even more so. Aside from the obvious security implications, for the Arabs to demand the return of land...
...By the terms of the 1971 amendment to the Food Stamp Act, certain recipients shall register for employment with state unemployment service offices at the time of application and at least once every six months thereafter...
...Unemployment was seriously over-counted during the Depression...
...No sober observer expects that a permanent peace will come anytime soon as a result of the steps, taken by Sadat and Begin: The problems of centuries do not disappear in a few hours of conversation between old enemies...
...Thus, in June 1977 there were 2,070,000 individuals registered for work under the food-stamp and AFDC programs...
...Every obvious manifestation of this preoccupation is recorded with a sharp eye for the insignificant, expressing in many scenes what could have been captured in one or two...
...With Douglas Trumball in charge of special effects, and a camera crew that includes Vilmos Zsigmond, William Fraker, Douglas Slocombe, and Laszlo Kovacs, it would be unreasonable to expect anything less...
...The corrected unemployment rate of 5.5 percent (5,228,000 divided by 95,480,000) is two percentage points lower than the official unemployment rate of 7.5 percent (7,298,000 divided by 97,550,000...
...Clarkson is professor of economics and Roger E. Meiners is a John M. Olin Fellow at the Law and Economics Center of the University of Miami School of Law in Coral Gables, Florida...
...Since the first two are satisfied by the eligibility requirements of the assistance programs, the key question is whether the registrants are to be counted as "looking for work...
...Individuals who refuse to register or comply with employment-service directives are no longer eligible for welfare benefits...
...Technically, that would be the correct answer, even if they have no more intention of seeking employment now than they had before being forced to register for work...
...In June 1977, 56.4 percent of the adult non-institutional population was employed in the civilian sector...
...Government Statistics as a Guide to Economic Policy," Policy Review, Summer 1977...
...near Muncie, Indiana...
...Nor should anyone believe that the problems themselves have become any easier to resolve: In the parlance of gametheory, the Middle East is in many ways a zero-sum contest...
...The study indicated that the beneficiaries of the two programs were nearly identical with respect to participation in the number of independent welfare programs, overall income, and geographic and social characteristics...
...See Michael Darby, "Three-and-a-Half Million U.S...
...and looking for work...
...For those who simply do not want to work, it is easy to fulfill the bureaucratic obligations without actually seeking employment...
...It is precisely because of these factors that Mr...
...Each of these programs has an explicit work registration requirement as a condition of eligibility...
...In essence, the high measured rates of unemployment in recent years can be explained in large part by a new class of individuals who either are largely unem: ployable or have no need or desire to work, but who, in order to qualify for various welfare benefits, must officially register for work...
...In thousands of years so little has happened that even hints that the problems of this area can be resolved...
...Box 877, Bloomington, Indiana 47401 PLEASE PRINT ^ New subscription ^ Renewal Zip The American Spectator March 1978 27 food-stamp and food-distribution programs showed that unemployment is considerably higher for those recipients subject to the work registration requirement...
...In addition to other criteria, the Interviewer's Reference Manual for the Current Population Survey explicitly states: If the respondent is in doubt about what the phrase "looking for work" means, tell him a person is LOOKING FOR WORK if he is trying to get work....Looking for work includes...
...among the latter it was only 22.3 'percent...
...The immediate aftermath of Sadat's visit has emphasized another thing as well—namely, just who the reasonable individuals involved in the Middle East are...
...Three criteria determine whether an individual is counted as unemployed: not working...
...Yet what lies behind it is never really bothered with...
...Employees Have Been Mislaid: Or, An Explanation of Unemployment, 1934-1941," Journal of Political Economy, February 1976...
...Sadat's visit to Israel comes as such a welcome surprise...
...Given the history of the Middle East, this is no mean accomplishment...
...Thus, the federal government deals a double blow to employment: It increases real unemployment by various social-welfare programs, and then compounds the problem by reporting inflated unemployment statistics...
...The tangled and conflicting religious, historical, and other claims to Jerusalem seem almost to defy description...
...His last film, Jaws, was a thoroughly expert thriller, no doubt due in some degree to the fact that Spielberg did not write it...
...If he could be as surehanded in his conception of humans as he is in his handling of monsters and aliens, he would certainly be a prodigious talent...
...Barron's Join the thousands of thoughtful people who read The American Spectator—the magazine Time magazine has called "one of the nation's most energetic and sprightly journals of opinion...
...As for the Russians, it is difficult to see how anyone could fail to perceive their complete lack of interest in any outcome that does not advance their own influence and efforts at domination—interests that are best served by keeping the Middle East in turmoil...
...One cannot help but hope that this latest and surprisingly encouraging development is at least a small indication from the Almighty that this troubled region, spiritual center to so many who worship Him, may yet receive His most devoutly cherished blessing...
...After all, he who bakes the cake may eat it too...
...But in practice, even by the admission of the program administrators, the requirement has not been successful...
...The welfare recipients who fall into this category receive food stamps, Aid to Families with Dependent Children (AFDC), and the benefits of several other smaller federal assistance programs...
...When he gets around to making a pinnacle out of a plate of mashed potatoes at the dinner table, Dreyfuss' usual energy and charm are powerless to carry the scene off...
...That this is a silly step too far is bad enough, but Spielberg compounds the problem by trying to turn the scene into a plea for pathos, with everyone at the dinner table bursting into tears...
...The scene is funny enough as a separate piece, but what it is doing in this picture and why it is played with such Laurel-and-Hardy thoroughness is hard to fathom...
...Similarly, work registrants are subtracted from the official number of unemployed to obtain a corrected figure of 5,228,000 for June 1977...
...He becomes obsessed with this experience, in particular with the mental image of a cone-like shape —ultimately revealed to be an image of "Devil's Tower," Wyoming, the site of the final close encounter...
...Because blacks represent a substantial proportion of both food-stamp and AFDC recipients, the effect of the work registration requirement on their unemployment rate is significantly greater...
...The unemployment rate that year was 3.5 percent, or less than half of the reported rate we are expected to believe nine years later—when employment is just as high...
...These findings suggest that before we embark on massive programs of general expansion or specific public jobs programs which are likely to increase inflation, a cleaning-up of existing unemployment indicators is in order...
...either necessary or desirable, since there is an explanation for the persistently high level of unemployment that has largely been ignored by bureaucrats and politicians: namely, that the official reported measures of unemployment are highly inaccurate and generate numbers which are practically useless...
...If a person is registered because of food stamps or AFDC, he would not re-register when becoming eligible for benefits under another program...
...By the terms of the September 1977 amendment to the work requirements, physically and mentally fit persons aged 18 to 60 (formerly 65) must register for work, search for jobs, and accept certain offers of employment, or lose their food-stamp benefits...
...In June 1977, approximately 23 percent of food-stamp recipients and 42 percent of AFDC recipients were black...
...When this number is subtracted from the civilian labor force figure for that month, a corrected labor force figure of 95,480,000 is obtained...
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...Thus, it is not surprising that the corrected unemployment rate for blacks falls nearly six percent—from 15.1 to 9.2—for June 1977, while that for whites falls by less than two percent (from 6.6 to 5.2...
...The purpose of the work-registration requirement may be sensible: to help able-bodied welfare recipients obtain employment by threatening a loss of benefits...
...Richard Dreyfuss plays the principal character, an electric company worker who encounters an alien spaceship somewhere David Everitt is a writer living in New York City...
...Sadat may not, in the final analysis, be blessed with extraordinary vision or intelligence...
...Each month the Bureau of the Census conducts the Current Population Survey to determine how many Americans are unemployed...
...Department of Agriculture of the ^ One year (ten issues) $10 ^ Two years $18 ^ Three years $25 ^ Payment enclosed ^ Please bill me X71 "...brokerage firm reports will never measure up to such serious publications as Playboy, or for sportive pleasure to such worthy journals as The American Spectator...
...Not only have these people been officially declared to be looking for work by virtue of work registration, but they have been told by one government official that they must actively be seeking work or they will lose their benefits...
...Since 1973, when work registration took effect, that employment rate has been the highest since World War II, except for 1968 when employment was 56.5 percent...
...That there are systematic biases in official unemployment statistics is now gaining widespread recognition...
...Hence, the effectiveness of the program is difficult to estimate...
...Unemployment among the former was 31.2 percent...
...Dreyfuss' supposedly tragic preoccupation progresses to outright buffoonery When he heaves his garden, dirt and all, through his kitchen window for the ultimate modeling material...
...On the other hand, those who do get jobs may have voluntarily yielded their benefits...
...available for work...
...Spielberg seems to have picked just about any glib entertainment that would kill time before the spectacular climax, regardless of whether it fit into any sensible dramatic scheme...
...The registration requirements for AFDC recipients are similar...
...Since the program's inception, approximately six percent of the food-stamp registrants have been declared ineligible because of their failure to comply with the work registration provisions...
...In particular, the rate among blacks contains a much heavier distortion than that among whites...
...Work registrants become part of the official unemployment statistics in the same manner as other individuals who are "looking for work...
...Our own nation, however bumbling its diplomatic efforts in this area may be at times—and I do not dispute that recently they have been very bumbling indeed—has nonetheless revealed again its basic desire that all efforts to-ward a peaceful settlement be encouraged...
...Additional support for the thesis that unemployment figures are unrealistic is provided by the figures themselves...
...registration at a public or private employment office...
...Evidently, Steven Spielberg is a much better director than he is a screenwriter...
...Please check the appropriate boxes and mail this form to: The American Spectator, Subscription Department, P.O...
...26 The American Spectator March 1978 are now included in official unemployment statistics and labelled unemployed...
...It is possible, of course, that some food-stamp or AFDC recipients who register for work do not report themselves as unemployed when the canvasser from the Census Bureau asks, but the incentives and pressures militate against such a response...
...Nasser and his allies ever fulfilled their oft-stated pledge to "drive Israel into the sea," one need have little doubt that that "occupied territory" would never have been returned...
...For example, a November 1973 study by the U.S...
...What Sadat's visit does indicate, however, is that a livable solution short of total conquest by one side or the other may yet be hoped for, and that reasonable individuals on both sides have, for the moment at least, seized center stage...
...These people previously were not counted as part of the labor force, but • Kenneth W. Clarkson and Roger E. Meiners, Inflated Unemployment Statistics, Law and Economics Center, 1977...
...Consequently, classifying work registrants by race results in a higher relative proportion of minorities who are subject to work registration requirements...
...The purported dramatic high point, however, is hardly worth all the painstaking technical wonders...
...THE TALKIES by David Everitt Close Encounters and High Anxiety The technical brilliance of Close En- counters of the Third Kind is beyond dispute...
...but given the political and emotional climate bequeathed to him by his flamboyant predecessor, his gesture to Israel stands as an unqualified example of statesmanship, whatever its ultimate success or failure...
...In response to this the Carter administration has introduced a public jobs program as part of its welfare reform bill...
...The other Arab nations, perhaps Syria and Libya in particular, have displayed once more their adherence to the doctrine of "drive them into the sea...
...THE PUBLIC POLICY by Kenneth W. Clarkson & Roger E. Meiners Deflating Unemployment Statistics Virtually every economic indicator now points to a continuing economic recovery and expansion since the end of the 1974-75 recession...
...The cynical and self-interested motives of other participants stand out more clearly by contrast...
...Begin, veteran of the most bitter struggles in his nation's long and often lonely battle for survival, stands firmly in the tradition of Israeli leaders who would be willing to compromise much that is disputed if only the sovereignty and security of their nation can be assured...
...There is a large and growing body of independent evidence that tends to confirm our corrected rates of unemployment...
...While those factors have increased real unemployment, the increase we are reporting here is simply fictional...
...For example, the New York regional office of the federal Bureau of Labor Statistics decided last fall to stop publishing its monthly unemployment estimate for New York City because that estimate was nolonger considered sufficiently accurate for researchers...
...At the same time, we find that the rate of unemployment has failed to drop to expected levels...
...It is unlikely, however, that such a program is Kenneth 1V...
...and the lengthy prelude to the monumental "close encounter" is a combination of tedium and silliness...
...Measured unemployment statistics are provided monthly by the Bureau of Labor Statistics...
...Thus, applicants may be called in by the employment service for testing, counseling, referral to job-training programs, etc...
...We should not, however, expect the government readily to accept this challenge since the more than $16 billion worth of existing programs to "reduce" unemployment would be jeopardized...
...Had the late Mr...
...Aside from the obvious security implications, for the Arabs to demand the return of land lost in a war in which they were essentially the aggressors must sound more than a little hollow in Israeli ears...
...Dreyfuss tries to re-create this mysterious shape while doodling, by modeling his shaving cream, by examining the contours of a ruffled pillowcase...
...Food-stamp and AFDC applicants who have registered for work are used to fill job requests in the same manner that other employment service applicants are processed...
...At the same time, Israeli settlements in the Sinai unquestionably rankle the Egyptians, suggesting a degree of permanence in the present territorial alignment which no Egyptian or other Arab is prepared to accept...
...The spaceship descends majestically, people stand around and gape, there is a stately exchange between 28 The American Spectator March 1978...
...It is worth noting that the current artificial increase in unemployment has a historical precedent...
...When another government worker comes to the door and asks them if they are actively seeking employment, they would minimize their risks, at no cost, by answering yes...
...Our analysis has revealed two important conclusions...
...The corrections we have made are straightforward: In each case, the number Name Address City State of active food-stamp and AFDC recipients required to register and seek work is subtracted from both the official unemployment and labor force figures...
...The PLO, darling of the so-called "Third World," has demonstrated its basic disinterest in any solution that does not involve elimination of Israel and the creation of a Palestinian state, regardless of whether an alternative arrangement would benefit the Palestinians themselves...
...As for the final encounter, the staging and rendering of the giant mother ship are unquestionably impressive, but I found myself noting this impressiveness with dispassion...
...In contrast, unemployment among whites who participated in the food-stamp program was only two percent higher than among whites in the food-distribution program...
...First, overall unemploymentrates are biased upward by as much as 40 percent.f Second, unemployment rates are differentially biased among various population groups...
...Exempted from registration are persons participating in the Work Incentive program (a federal training program), parents or caretakers of children under 12 or of an incapacitated person, regular participants in a drug-addiction or alcoholic-treatment program, and others...
...However, reported unemployment was considerably higher among blacks who received food stamps, and were thus subject to work registration, than it was among their counterparts in the food-distribution program who were not subject to the work requirements...
...For all that, however, Sadat's visit merits both prayers of thanks and renewed prayer that a just peace may yet be achieved...
...The increase in unemployment has also been linked to the amount and duration of unemployment compensation and to the minimum wage...
Vol. 11 • March 1978 • No. 5
