Some rejoinders to ‘a former cardigan wearer’ on dodgy unemployment figures.

No,
the Commonwealth Statistician is not the most independent office holder
in the world. The Commonwealth Statistician, Mr.Trewin, is quoted in
‘The Age’, Melbourne, 22/1/2001, as saying that the official measure of
unemployment does not reflect the true jobless rate. He tried to back
peddle the next day because of massive pressure on him to do so by the
Treasurer but too late. His comment was on Tim Colebatch’s (Economics
Editor – ‘The Age’) tape so he couldn’t claim he was misquoted.

Mr.Des
Moore, (a former treasury official) in commenting on the last AIRC
national wage case said in ‘The Australian’, 13/6/05. “This approach
(on wages) pushes the unemployed and the under-utilised to one side in
preference to those already in employment. Yet Australian Bureau of
Statistics data shows there are more than one million unemployed or
under-utilised and another 800,000 who say they would like work if
available. About two million mostly unskilled would like jobs but have
had little chance of getting them under the commission’s regime.”

Surely
‘cardigan wearer,’ if a ‘hard right’ figure such as Des Moore admits
the real unemployment figure is 2 million or around 20% who are you to
dispute him? What are your credentials?

Dr Peter Brain, a senior
economist with the Australian National Institute of Economic and
Industry Research said (‘Herald – Sun’, Melbourne, 26/8/01) that
successive governments had “corrupted” ABS statistics and “Government
changes in policy since the late 1980’s had corrupted the ABS
unemployment statistics”.

I can also recall John Howard, then
Shadow Minister for Industrial Relations, saying to me at an AM
Breakfast (Melbourne) in 1993:

‘Marcus, I know the real
unemployment figure is 20% but I cannot afford to be honest. If I was
honest people would become depressed and spend less thus creating even
more unemployment’. I tried to explain the economic and social cost of
unemployment ($25 bill – $50 bill p.a.) but he was dragged away by a
minder’.

I repeated my Howard claim on Radio 2CC on 24/10/05 and I am not aware of any denial by his office.

I
note that you only make comment on the ‘Labour Force’ survey but make
no mention of the ABS ‘Persons not in the labour force’ survey. Why
not? Similarly you only comment on a few deletions from the monthly
survey which is not really a snapshot but are monthly figures. Why do
we pay the dole to 1.6 million but only admit to around 600,000
unemployed?

In this connection, it is important to appreciate that the ILO concepts and definitions are not formulated by:

a) the statisticians on the staff of the ILO — the international civil servants;
b)
nor by the statisticians on the staff of other international agencies
such as the United Nations Secretariat, the WTO, the OECD et al—also
international civil servants;
c) nor by independent expert professional statisticians such as academics, actuaries and accountants.

In
fact, the ILO concepts and definitions emanate from a group of
statisticians, convened by the ILO, about every seven years, which
comprises national civil servants nominated by their respective
governments (not by the ILO).

In the case of Australia, for
instance, its representatives on this ILO group has been the Australian
Statistician for the time being—an Australian public servant. While the
fact that this ILO group is composed of national civil servants does
not mean that they are not expert statisticians, it does mean that they
are not independent, in that they are, of course, beholden to their
respective governments which can direct or influence them as they see
fit.

All governments are anxious, for obvious reasons, to reveal
publicly the lowest rate of unemployment that is possible —not least of
all for domestic consumption. In short, the governments involved in the
ILO group, have a vested political interest in using concepts and
definitions, especially when issued under the prestigious imprimatur of
the ILO, that disclose as low a rate of unemployment as possible, and
the national civil servants of the ILO group all have riding
instructions or at least guidelines, from their respective governments,
to achieve this end.

Hence, ILO concepts and definitions of
unemployment are inherently flawed as they reflect the political
motivations of governments in directing or influencing their respective
national civil servants into jointly formulating them.

Peter Fray

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