Half truths and statistics

The unemployment rate is falling again. Having reached its peak of 10.2 percent in May 1999, it fell back to 10 percent by the beginning of July. According to the state's employment service, the number of people out of work has decreased by about 800 since mid-June.

What does it mean? That 800 people found new jobs?

Nope.

That the number of people who found jobs was 800 greater than the number of people who lost them?

Try again.

That fewer people are without jobs now?

Even this general statement is not necessarily true.

All it means is that the State Employment Board now has 800 fewer people registered as not having jobs and visiting their local employment board branch at least once a month to confirm their status of being able and willing to work.

Of course not every person registered with the State Employment Board would pay it a monthly visit. About 1.5 percent to 5 percent do not, and they are not counted in the unemployed statistics. They are counted as "registered non-working persons" - a measure not mentioned too often and not discussed widely.

Much more significant is the proportion of people out of work who never get to the doors of their local employment board branch - varying from year to year, it fluctuates around the 50 percent mark.

Even those who do visit the State Employment Board may not be registered as unemployed - if their monthly income from whatever activity reaches or exceeds the minimum wage of 42 lats ($70) - according to the provisions of the Employment Law of 1992.

They are included in the count of "job seekers," what most people consider "unemployed." They are not at all what the Central Statistical Bureau has in mind when reporting on the recent unemployment statistics.

Now that the unemployment benefits have been falling since March, there may be even less of an incentive to go to the State Employment Board.

The job seekers rate was 19.4 percent in 1996, 14.8 percent in 1997 and 14.0 percent in 1998 - almost twice, and in some cases more than twice the official unemployed rate.

The imperfection of the unemployment measure in reflecting the actual number of people out of jobs is in no way unique to Latvia. Counting the registered unemployed is easier than counting the number of job seekers, and can be done more frequently providing government with more recent economic updates.

Of course, it can also have underlying political reasons. And while Latvia has not been fiddling with its unemployment measure too much, some countries do it a lot. In the last half a century, Great Britain changed its unemployment measure more than 20 times. In all cases but one the unemployment count fell immediately following such a change. That one must have been a flop.