LETTER:Measuring unemployment: the figures and the `fiddle' theories

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The Independent Online
From Dr John Philpott

Sir: In his letter of 24 March, Phillip Oppenheim MP, Under- Secretary of State at the Department of Employment, quotes from an Employment Policy Institute (EPI) report which states that "fiddle" theories surrounding the official unemployment figures have been discredited. In fact, the EPI report in question was concerned with possible explanations of the earlier-than-expected fall in the unemployment count during the economic recovery, and not the separate issue of whether the unemployment figures convey an accurate impression of the level of unemployment.

Mr Oppenheim's letter and those of 27 March from Dr John Wells and Dr David Taylor demonstrate that estimates of the precise level of unemployment are highly sensitive, in particular to assumptions made about people who say they want jobs but are not actively searching for work. People who believe that the official assumptions are too restrictive talk of "fiddles", while the Government accuses those who make alternative assumptions of "exaggeration". Such language generates more heat than light and simply reinforces public cynicism on this issue.

Controversy will only begin to be quelled if the following two steps are taken:

First, copying US practice, a regular spectrum of measures of unemployment, derived from the Labour Force Survey (LFS), should be published. The central measure would be that which is already published by the Employment department. The additional measures in the spectrum would then also cover different groups of jobless people. One measure, for example, could add to the central LFS measure so-called "discouraged workers", people who are often desperate for jobs but so demoralised that they have given up looking for work on a regular basis.

Second, the Employment department should establish a formal independent advisory group on employment statistics, similar to that which has long existed for the Retail Price Index.

Yours faithfully,

JOHN PHILPOTT

Director

Employment Policy Institute

London, SE1

27 March

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