International Labour Statistics

A Handbook, Guide, and Recent Trends

R. Bean, R. Bean

• Publisher: Routledge
• Year: 2018
• ISBN:
  9780429664694
• Edition: 1
• Topic: Business
• Subtopic: Business General
• Index: Business

First published in 1989. The oil crises of the 1970s and increasing international competitive pressures had profoundly changed the structure and performance of labour. Analysis of labour markets, and especially international comparisons, can be difficult, given the differences between definitions, scope, coverage of data, methods, presentation, and economic and social influence in different regions. This book is an invaluable guide for users of international labour statistics. It centralizes and co-ordinates, from a range of sources, basic statistical information regarding the labour force for a large number of countries.

Individual chapters, by specialists in the particular subject areas, deal with eight key aspects relating to the labour markets of major, developed capitalist countries (OECD countries); working population, unemployment, wages, consumer prices, labour costs, hours of work, trade union membership, and industrial disputes. The book discusses the nature of the data sources and statistical compilations, highlights cross-national trends over the past fifteen years, outlines the inherent difficulties of making such cross-country comparisons, and points out the potential pitfalls of interpretation of which users are often insufficiently aware. The book includes a summary of key labour market data, on an individual country basis, for twenty-four OECD countries and twenty other countries.

Part 1: A guide to the use of labour statistics

1 LABOUR STATISTICS IN INTERNATIONAL PERSPECTIVE

R. Bean

INTRODUCTION

Within developed market economies it is the labour market bringing together buyers and sellers of labour services, which allocates labour among different kinds of employment and, since it constitutes an important source of income for most of the population, also determines the distribution of labour earnings and conditions of employment. Furthermore, the workings of labour markets are central to economic-policy considerations since the unemployment rate and consumer price index, for instance, provide simple yardsticks - and are regarded as key indicators - for attempting to measure the overall performance of an economy, as well as for comparing economic performance among nations. It is frequently claimed that the higher and persistent levels of unemployment throughout most industrialized countries in recent years constitute the leading economic problem of our time, reflecting both unused labour resources and loss of potential output. The costs of unemployment for the economy, however, include not only lost production but reductions in tax receipts, together with increases in government transfer payments.

The labour market itself also provides an important interface between the economic and social systems since, although labour is a factor of production, ‘the worker is a human being, and his work involves social as well as technical relations. Work is not merely the way to get a living but a way of life … a field of conflicts and loyalties, anxieties and reassurances’¹ in which the occupational and social structures are interlocked. Thus, although wage and earnings levels are arrived at in a market as a price and a distributive share, they can depend not only on the impersonal balance of supply and demand but upon custom, notions of fairness and equity, together with the balance of power between groups and classes.² Similarly, unemployment has social as well as economic ramifications because - as Guy Routh has recently observed:

work, with its regular routine and activities, forms an essential framework for the personality, giving the worker status and a sense of identity … [whereas] alienation and anomie accompany loss of a job and the inability to find one [so that] the unemployed are bystanders, excluded from participation in this life process, unless they can enter sub rosa through the black economy.³

The unemployment rate may therefore be utilized not only as an indicator of the supply of unused labour in an economy but also as an index of economic and related social hardship, stemming from loss of income and consumption which, in turn, may influence government policy on the extent of job creation, special training programmes, income support schemes, and other welfare measures. The Bureau of Labor Statistics in the United States of America was, in fact, established originally in order to meet a growing demand for information on labour conditions so as to provide a basis for improved labour standards, and in its early days was viewed as part of a movement for social reform.⁴ In the United Kingdom a similar, early concern of official labour statistics was with the conditions of the ‘wage-receiving class’, and post-1945 the ‘figures of registered unemployment were commonly regarded as perhaps the most important … indicators on which to base public policies of demand management, regional growth, the control of inflation and welfare provisions’.⁵ Labour-force measures, however, are used not only for the analysis of the economic and social forces of employment and unemployment but also in estimating labour productivity and, within Third-World countries, as a basis of planning for economic development and to help decide on whether labour-intensive, or capital-intensive, techniques should be used in the production process.

In relation to the labour market statistical data are necessary for analysis upon which to anchor observations and base recommendations since statistics ‘both mould and reflect our perceptions of reality of a given social and economic situation’⁶ and they are valuable resources in producing and evaluating knowledge. Undoubtedly the measurement of any economic variable is vital where it acts as a guide to policy makers and, since the labour market itself is a complex phenomenon, measurement of its performance necessitates the careful development and use of a range of measures that will capture the many aspects and different dimensions of its operations.⁷ For instance, when examining labour demand, attention needs to be directed not only to the number of persons employed and the rate of growth of numbers employed but also to the utilization of those already employed and the number of hours worked, since the aforesaid measures neglect changes in hours worked (and therefore possibly underemployment) by those already in work (see chapter 7). Similarly, in order to assess the extent of labour-market slack the unemployment measure needs supplementing because in many countries, including Australia,⁸ it is argued that there is a significant number of ‘hidden’ unemployed persons or ‘discouraged’ job seekers, who, having dropped out of the labour force and therefore not appearing in the official unemployment statistics, would actively seek work if labour-market employment conditions were more favourable, given prevailing wages.

Additional measures such as labour-force participation or activity rates - showing the proportion of the population of a given age group offering their services in the labour market - are therefore important from a planning standpoint to help gauge the productive potential of an economy and to facilitate higher rates of participation for particular population groupings. Other useful, but less widely used, measures of labour-market conditions include the ‘employment-population’ ratio which relates the employment level to population size and answers the question ‘what proportion of the population of working age is actually employed?’ It indicates whether or not an economy is generating jobs at a fast enough pace to provide employment for a constant proportion of the population.⁹

CONCEPTUAL AND MEASUREMENT DIFFICULTIES

There has been a good deal of criticism in recent years concerning the adequacy and measurement methods of particular labour-force statistics.¹⁰ There is some ambiguity, for instance, in the concept of ‘employment’ across different societies which makes it hard to define optimal policies (see chapter 2). More difficult is the measurement of unemployment which is a complex and multi-dimensional phenomenon. This measurement can sometimes be controversial since,

When rates are low, public interest also is low. When rates rise, controversy is likely to rise, particularly with respect to what the figures mean. Some argue that the figures are too low and do not reflect the true extent of labour underutilization in times of rising unemployment. Others contend the figures are too high and do not reflect the reality of the job market.¹¹

Such problems hinge on how unemployment is defined, operationally specified, and compiled, and, in order to consider the merits and limitations of any labour-market measure like this, it is essential, as a preliminary, that the objective of that measure is clearly defined.¹² One use of unemployment data is to assess current economic conditions and short-term prospects, that is, as a cyclical indicator, whereas other users require the data as a measure of how well the economy relieves the economic and psychological hardships experienced by job seekers. ¹³ Since there are a variety of different purposes for which unemployment data may be required - as well as differences in the methods of measurement - there is, as chapter 3 makes clear, no one, correct measure.¹⁴

In those countries such as the UK where unemployment insurance (rather than household surveys and censuses) has been used as the main source of unemployment statistics since 1920, there are further problems in using an administrative system as a proxy for an economic and social concept like unemployment. In fact, two very different concepts of unemployment are implied in questioning people about their employment status, availability and job-seeking activities, and in bureaucratic regulations relating to who can and cannot claim unemployment benefit. In the UK the official monthly unemployment figures have become an issue of major political controversy. They are a good illustration of the way in which the definition of a social problem can alter both its size and shape since it was contended in the mid-1980s that by excluding or ignoring certain groups the government has managed to stabilize unemployment at about 3.3 million over the past two years (and on at least two occasions actually to reduce it).’¹⁵ More generally, some observers would maintain that political positions are inevitably embedded in supposedly factual and technical statistical data since the data themselves are social products which are not simply collected but produced. Thus ‘statistical data cannot be interpreted without reference to their underlying theoretical assumptions [since] all data … are structured by the conceptual framework that is applied as well as by the technical instruments used in their production’.¹⁶

In the case of Italy, unemployment figures - along with many other Italian statistics - are said to be subject to an unusually high margin of error which in part reflects the large role played by the ‘black’, or ‘underground’, economy in that country. This submerged and unreported economy concerns tax avoidance, the illegal employment of students, pensioners, and foreign workers, as well as double-job holding, together with the officially unemployed who have black jobs - estimated at some two million. The authorities claim to have discovered 6.6 million cases of black employment, (lavoro nero), equivalent to 1.5 million full-time jobs, which would push up the number of employed persons in Italy by 7.4 per cent to 22.5 million and would significantly reduce the unemployment statistics.¹⁷

Conceptual difficulties and measurement errors also affect other types of statistics relating to the labour force such as strikes (industrial disputes). Indeed, Shalev maintains that strike statistics are ‘some of the most over-abused and least understood of man’s many attempts to freeze and condense richly dynamic social events into static, artificial and misleadingly accurate arithmetic’.¹⁸ Other things being equal, smaller, shorter, and more localized disputes are less likely to secure statistical inclusion in the official figures for a particular country. Also, in a recent study in New Zealand, it was found that over a three-month period in 1984 the official statistics underestimate the actual number of workers involved in stoppages in that country by 47 per cent, and the number of working days lost by 42 per cent.¹⁹

Furthermore, in most countries there will be inaccuracies of strike reporting because of either insufficient resources being devoted to the collection of the statistics, or a wish to use them for particular purposes. In this respect companies desirous of projecting an image of industrial harmony m...