The big pic­ture in em­ploy­ment

Dünya Executive - - COMMENTARY - Alaat­tin AKTAS Econ­o­mist

We broke the un­em­ploy­ment record in June with 13 per­cent rate. The trend in­di­cates an un­em­ploy­ment rate of 15-16 per­cent for the end of the year. More­over, we have been able to stay at 13 per­cent thanks only to an ex­tra­or­di­nary de­vel­op­ment, which is not im­me­di­ately clear. Let me clar­ify:

If we take the June to June pe­riod as a base, the la­bor force in­creased by 900,000 in 2015, 638,000 in 2016, 1,176,000 in 2017, and 675,000 in 2018. The av­er­age in­crease in these four years was 847,000 new work­ers per year. Last year, the la­bor force in­creased by a mere 137,000 in the last year. The key takeaway from this is that the num­ber of un­em­ployed stayed low be­cause the num­ber of work­ers added to the work­force was low.

You can­not ig­nore such im­por­tant de­tails about un­em­ploy­ment and then try to claim that things are good. An­other ex­am­ple: The in­crease in the num­ber of un­em­ployed was more from May to May, with a smaller in­crease from June to June. For in­stance, sea­son­ally-ad­justed un­em­ploy­ment de­creased from 14 per­cent to 13.9 per­cent, al­legedly in­di­cat­ing an im­por­tant trend. Of course, it would have been pos­si­ble to in­ter­pret this as a con­tin­u­a­tion of the ear­lier trend if it had in­creased to 14.1 per­cent from 14 per­cent, be­cause sea­son­ally-ad­justed un­em­ploy­ment had al­ready been ris­ing for months. But how does a one-month de­cline turn into a trend? It is un­be­liev­able!

One in four un­em­ployed is a post­grad­u­ate

From June to June, the num­ber of un­em­ployed peo­ple has in­creased by 1.6 mil­lion over the last five years. Sec­ondary school grad­u­ates ranked first in this in­crease with 611,000 peo­ple. Then comes post­grad­u­ates with 507,000 peo­ple. The num­ber of un­em­ployed in vo­ca­tional and tech­ni­cal high school grad­u­ates in­creased by 256,000. Can you see the mag­ni­tude of the prob­lem that our ed­u­ca­tion sys­tem gen­er­ates! Al­most a quar­ter of the to­tal un­em­ployed, which was 4,254,000 in June this year, are post­grad­u­ates, to­tal­ing 1,057,000 peo­ple.

17 post­grad­u­ates be­come un­em­ployed ev­ery hour

The num­ber of un­em­ployed post­grad­u­ates has in­creased by 150,000 peo­ple in the last year. This in­crease means that 411 post­grad­u­ates join the army of the un­em­ployed ev­ery day, wither be­cause they lost their jobs or could not find work even though they grad­u­ated. More strik­ingly, 17 post grad­u­ates be­come un­em­ployed ev­ery hour.

So who wants to claim now that there is an im­prove­ment in un­em­ploy­ment?

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