“Misery Index” at lowest level since 1950s | Brookings Institution

English: At a meeting with representatives of ...

English: At a meeting with representatives of US public, academic and political circles. Русский: На встрече с представителями американской общественности, научных и политических кругов. (Photo credit: Wikipedia)

This is an interesting read from the Brookings Institution.

The article reports that the “Misery Index,” an economic measure invented by former Brookings economist Arthur Okun in the 1970s that combines the unemployment rate with the inflation rate, has been at its lowest levels over the past year since the 1950s according to calculations by Senior Fellow Gary Burtless.

Source: “Misery Index” at lowest level since 1950s | Brookings Institution

Whilst I’m not disputing the overall statistics, especially for America, I think this is misleading. It’s necessary to cut and dice the data by:

  • Country
  • Region
  • Gender
  • Age
  • Class
  • Ethnicity

In my view, in the UK and Southern Europe excessive austerity has influenced the Misery Index

Thoughts?

One response

  1. Dr. Alf is correct in his analysis and I would question this index on more fundamental grounds.

    The Misery Index was conceived in the 1970s when inflation and unemployment figures were compiled differently and before the deliberate falsification of unemployment figures that has taken place in both the UK and America. UK unemployment is supposed to be 1.8 million but 2 million people who have registered businesses which have not traded and not made their directors a penny are counted as “self-employed”, 1 million people are in training schemes but in reality not working, 1 million people are NEETS (not in education, employment or training) but they are not counted as unemployed, 1/2 million people who are not working have been “sanctioned” by DWP jobcentre advisors but are not working, another 500,000 people who are redundant are in receipt of severance pay are ” deemed to be working” because they are in receipt of National Insurance contributions.

    People who are on holiday are forced to sign off, those who are “waiting to hear about benefits” are not counted as unemployed even though they are not working and a further 11 million people who are too young to retire and too old to interest ageist employers are counted as either “economically discouraged ” or economically inactive.

    The Joseph Rowntree Foundation looks at this sort of thing in some detail but even they do not know the full extent of the numerical gerrymandering as it has been explained to me by several of the Governments “training for work” providers.

    A further 2 million people on “Personal Independence Payments” (the successor to incapacity benefit and “Disability Living Allowance” are unable to work but not counted in the unemployment figures.

    Thus, we have a situation where real unemployment and a fair amount of misery is airbrushed out of the figures without the explanations and footnotes that Dr. Alf will remember from his years of distinguished work as a Financial Director, Chartered Accountant and interim manager looking at Annual Reports and Accounts and preparing them to international standards capable of independent audit.

    The real data is kept in something called the “Benefits Computer” and is accessed by Government Ministers and top civil servants but never made public for obvious reasons.

    America does not go to quite these lengths but also understates the true figures by making it harder for redundant executives, managers and workers to claim unemployment benefits in the first place.

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