Regarding unemployment during the Great Depression, Andrew Wilson writing at the WSJ recently said: ?As late as 1938, after almost a decade of governmental pump priming, almost one out of five workers remained unemployed.? Historian Eric Rauchway says this is a lie, a lie spread by conservatives to besmirch the sainted FDR. Nonsense. In 1938 the unemployment rate was 19.1%, i.e. almost one out of five workers was unemployed, this is from the official data series for the 1930s. Rauchway knows this but wants to measure unemployment using an alternative series which shows a lower unemployment rate in 1938 (12.5%).
So why are there multiple series on unemployment for the 1930s? The current sampling method was not developed until 1940, thus unemployment rates prior to this time have to be estimated and this leads to some judgment calls. The primary judgment call is what do about people on work relief. The official series counts these people as unemployed.
Rauchway thinks that counting people on work-relief as unemployed is a right-wing plot. If so, it is a right-wing plot that exists to this day because people who are on workfare, the modern version of work relief, are also counted as unemployed.
Moreover, it?s quite reasonable to count people on work-relief as unemployed. Notice that if we counted people on work-relief as employed then eliminating unemployment would be very easy?just require everyone on any kind of unemployment relief to lick stamps. Of course if we made this change, politicians would immediately conspire to hide as much unemployment as possible behind the fig leaf of workfare/work-relief.
?http://www.marginalrevolution.com/marginalrevolution/2008/11/unemployment-du.html
