Having people who are capable of being in the labor pool but who are not is a serious concern. Unemployment is calculated as the # of people actively trying to find work who cannot. If, because of economic conditions or societal factors, those people give up on trying to find a job and leave the labor force, they are no longer considered unemployed. This makes the statistics look better, but in actuality highlights a significant underlying weakness of the economy. To some degree, this is what happens in the EU. Portions of it can be blamed on cultural differences, but by no means all of it.
Wow hold a sec. The whole definition of "actively trying" to look for work is so different when looking at the EU (even between countries) and the US. In the US if you have not had a job in 3 years you fall off the statistics. I dunno whats more stupid than having people "drop off" the statistics because they have not found work after 3 years and living in the bliss that they dont exist anymore (but hey we got a lower unemployement rate!) or living with a more realistic (tongue in mouth, as it aint no where near perfect) statistic of the EU. In the EU we have, like according to the ILO guidelines, a requirement of "actively seeking" for work.. we dont have a deadline before you are considered "dead" to the system.
The problem is pure and simple.. there might be guidelines from the ILO that make it easier to compare countries, but those guidelines are not used by all, and the US is especially "limited" to its usuage.
I think this explains quite a bit
http://www.bls.gov/fls/flsestpr.htm
The foreign country data are adjusted as closely as possible to U.S. concepts. Although the U.S. lower age limit is 16 years, the age limit for other countries varies from 15 to 16 years. Differences in the concept of employment relate mainly to treatment of the Armed Forces, layoffs, and unpaid family workers. Adjustments are made where necessary to exclude the Armed Forces. No adjustment is made for the treatment of layoffs. For some countries, no adjustment is made for the treatment of unpaid family workers. Differences in the concept of unemployment relate mainly to persons waiting to start a new job and passive jobseekers. In the United States, persons waiting to start a new job are unemployed only if they were actively seeking work; otherwise, they are not in the labor force. In the other countries, persons waiting to start a new job are generally counted as unemployed. In the United States, job search must be active, such as placing or answering advertisements; simply reading ads is not enough to qualify as active job search. Canada and the European countries classify passive jobseekers as unemployed. An adjustment is made to exclude them in Canada, but not in the European countries, where the phenomenon is less prevalent. Australia and Japan exclude passive jobseekers, in accordance with the U.S. concept. These unadjusted differences have a negligible effect on the comparisons.
In other words, US statitics are cherry picked. They dont follow the agreed standards and rather arrogantly say that the US method is better. Funny how they take the word of a survey over factual numbers... but hey... whats next, we elect our leaders via polls? US numbers dont include US armed forces.. whats that 1 to 2 million people? Does that include or exclude people under Homeland Security or? The US sets a limit on how long you can "actively" be seeking a job and after that, you are kicked off the statistics. Fine, but that also means US statitics are under reported. Question because they are not actively seeking work (gone over the deadline) do they also drop out of the labour force?
If the European population participated in the labor force at the same rate as Americans, there would be an additional 17.8 million people in your labor force without the jobs for the. That would make your unemployment rate 14.8% and drive down average wages at the low end of the spectrum significantly. That's a problem.
No one of the problems is unequal definitions of what "labour force" is, plus various other issues on both sides of the pond. For example the EU says people over 15 and non retired are part of the "labour force" The US says over 16 and about retired part.. I aint too sure frankly looking at the numbers. US labour statistics are confusing as hell (the web designer should be fired over there).
Population 300 million, 153 in the labour force, 78 million outside the labour force.. what about the remaining 70 million? That retired people?.. then what are the 78 million outside the labour force? Kids? I cant find any definitions what so ever.. (granted pretty tired atm so
)
http://www.bls.gov/news.release/pdf/empsit.pdf
While the US claims to have more accurate numbers and all that chest thumping ... where are they? Thier definitions are not even close to international standards on many areas.
The EU has very exact statitistics compared to the US if you ask me. 380.3 million EU citizens are considered in the labour force. The remaining are either retired or under the age of 15. That sounds about right, we have a lot of elderly people and there are of course kids..
Of the 380.3 million 197.5 million are employed, 19.5 million unemployed, and 163 million inactive persons.
http://epp.eurostat.ec.europa.eu/cache/ITY_OFFPUB/KS-NK-06-013/EN/KS-NK-06-013-EN.PDF
The stats are even cut up into under catagories.
Now one could ask, what are the 163 million inactive persons? Well according to that 146 million do not wish employment? Oh, well in the US statistics said people are "slackers" and kicked out of the statistics...the 70 million or the 140 million? who knows. Of the EU numbers 77 million are retirements.. hmm what does that mean? People who retired before the age of 64 I bet. Technically they still part of the work force according to the age rules set down by the ILO. What about the US? dunno cant find similar statistics easily. Does the US count such people as retired and hence not part of the labour force or not?
Point is to compare numbers we need a standardised set of numbers, and there are not that many around.. so you or anyone else can throw around numbers but dont expect them to be near the truth. The 163 million inactive persons is a good example.. we count them as part of the labour force, the US does not.