Thursday, November 14, 2013

Warehouse 13

The graph on the left, a tad cherry picked from the famously high youth unemployment statistics and the almost entirely unnoticed (and coincident) dramatic surge in the female over-40 labour force, gives a hint as to how the oft-cited Spanish family support system appears in the INE database. The fact is that the 2.3 million job losses borne by young people between 16 and 29 years old since the end of 2007 have been accompanied by an increase in the labour force group to which their mothers belong of 1.2 million. There's a certain amount of double counting here as more than one family member goes looking for a single job.

Not that it's going to inhibit the production of pre-packaged commentaries, but we think it's worth pointing out that maybe the standard American labour market take - that participation decreases during recessions as job seekers become discouraged - doesn't exactly apply to Spain. In fact, it might be appropriate to believe that employment gains at the young end of the scale might produce an inordinately large drop in active population, and that the consequent extra decline in the unemployment rate is a Good Thing - not a fantabulous evil conspiracy designed to obfuscate the true irremediability of the situation (or, alternately, to give a boost to the credibility of the commentator noting it). After all, there is some evidence here that each job loss produced one-point-something job seekers over the course of the last six years. If you want, you can see a scatter plot of the same series here.

Lastly, I don't have any trouble convincing myself that the giant warehouse of human availability known as 'the unemployed' is operated on a FIFO basis - first in, first out. In order, the collapse of the building industry hit participants like this:
1). Illegal, undocumented labour
2). Part-time
3). Temporary
4). Full-time permanent
Cruel and unsatisfactory as it may be, recoveries work in reverse order. We know that most official jobs created recently have been of type 2 and 3. The reader can rest assured that the two negative prints at the end of the chart tell us that there's activity in the grey market as well.

A multitude of binary beings populating the noise-o-sphere will likely come to the conclusion that I believe that everything is really alright. It's not. Obviously. I am not threatening your credo.

Also, the invaluable Chris Dillow gives us a couple of object lessons in the interpretation of labour force stats. They can be read here and here. Worth the effort.



vbounded said...

were some spanish banks in 2009 or 2008 giving nonrecourse loans to bankers to buy real estate off the bank's books (with limited equity investment by the bankers)?

Charles Butler said...


vbounded said...

I have a recollection of news coverage alleging such things, similar to some of the asset sales banks were doing to hedge funds with seller financing to move assets off the books.