European unemployment statistics are infinitely more accurate than American. We use telephone polls – “Hi. How many people in your house have jobs?” Our “unemployment rate” is more an estimate than a reality. But in European Union countries, they start with the number of people over the age of legally being able to work. Then they subtract the number of people who have been certified as disabled to the extent of never being able to work. Just being blind or in a wheelchair doesn’t count. Being old enough to be retired doesn’t count either. Then, they take their tax information, how many people are being paid wages which are reported to the government. What’s left is the number of unemployed. We could do the same thing here if we did it on a state-by-state basis.
On Wednesday, the European Union unemployment statistics were published and showed the wide swing of unemployment on the contintent. Spain hit a 15-year high for unemployment at 21%, while Germany hit a 20-year low of 7.1%. Germany’s unemployment rate has fallen in 29 of the last 32 months.
Germany’s economy is said to be export-driven, but that is only part of the story. It is not “exports” in the terms most Americans think of – huge companies making large things like cars, planes, weapons systems or steel. A good part of its economic base is smaller manufacturing, but very high-end quality. If you want the best kitchen knives in the world, you start by looking at German brands. These are also not products intended to self-destruct in two years and be replaced. These are investments, so the target consumer is not shopping at Walmart, but at Williams-Sonoma. It is expected that the demand for German products will recede because of the lack of recovery from the recession, but not to an extent that it will increase unemployment.
Spain is on the other end of the European economy melt-down. The new conservative government of Prime Minister Mariano Rajoy has instituted a severe austerity budget to cope with their debts. That does not lead to economic growth. Spain is at the bottom of the EU economic mess along with Greece.
American economic analysts believe that our unemployment rate is closer to 20% than the official 8.9%. We could make better decisions about our economy if we would utilize the data we already have available to us and stop guessing and polling for unemployment rates. Being closer in unemployment to Spain than to Germany should seriously change our attitudes.