But it also misleads in saying “real US unemployment rate.”

As Dr. Deming said: “there is no true value” of any measured process. The results depend on the process which includes the operation definitions used.

Over time the value of a measure (as a proxy measure for some condition you care to monitor) can change.

It is important to update measures to avoid using proxies that lose value.

The unemployment rate certainly has proxy issues. But there is no “true unemployment rate.” There are ways to change the process to focus on different things (make the proxy better matched to certain issues). But also it seems to me, unemployment rate needs to have other related measures that are considered in concert with the unemployment rate (such as the labor force participation rate, perhaps some measure of under-employment etc.).

Those paying much attention do use other measures in concert but the last few years I read lots of different people complaining that the unemployment rate doesn’t capture various aspects of how the job market is poor (and often claiming the unemployment rate was “inaccurate” as though there was a platonic form of the actual rate divorced from the measure process.

Related: What Do Unemployment Stats Mean? – Economic Measurement Issues Arising from Globalization – Why China’s Economic Data is Questionable

I think sites like oDesk provide a potentially great way for people to lead productive and rewarding lives. They allow people far from rich countries to tap into the market demand in rich counties. They also allow people to have flexible work arrangements (if someone wants a part time job or to work from home that is fine).

These benefits are also true in the USA and other rich countries (even geography – there are many parts of the USA without great job markets, especially many rural areas). The biggest problem with rich country residents succeeding on something like oDesk is they need quite a bit more money than people from other countries to get by (especially in the USA with health care being so messed up). There are a great deal of very successful technology people on oDesk (and even just freelancing in other ways), but it is still a small group that is capable and lucky enough to pull in large paychecks (it isn’t only technology but that is the majority of high paying jobs I think on oDesk).

But in poor countries with still easily 2 billion and probably much more there is a huge supply of good workers. There is a demand for work to be done. oDesk does a decent job of matching these two but that process could use a great deal of improvement.

I think if I became mega rich one of the projects I would have would be to create an organization to help facilitate those interested in internet based jobs in poor countries to make a living. It takes hard work. Very good communication is one big key to success (I have repeatedly had problems with capable people just not really able to do what was expected in communications). I think a support structure to help with that and with project management would be very good. Also to help with building skills.

If I were in a different place financially (and I were good at marketing which I am not) I would think about creating a company to do this profitably. The hard part for someone in a rich country to do this is that either they have to take very little (basically do it as charity) or they have to take so much cash off the top that I think it makes it hard to build the business.

But building successful organizations that can grow and provide good jobs to those without many opportunities but who are willing to work is something I value. I did since I was a kid living in Nigeria (for a year). I didn’t see this solution then but the idea of economic well being and good jobs and a strong economy being the key driver to better lives has always been my vision.

This contrast to many that see giving cash and good to those in need as good charity. I realize sometimes that is what is needed – especially in emergencies. But the real powerful change comes from strong economy providing people the opportunity to have a great job.

I share Dr. Deming’s personal aim was to advance commerce, prosperity and peace.

Related: Commerce Takes More People Out of Poverty Than Aid – Investing in the Poorest of the Poor – I am a big fan of helping improve the economic lives of those in the world by harnessing appropriate technology and capitalism – A nonprofit in Queens taught people to write iPhone apps — and their incomes jumped from $15k to $72k

I realize some people see risk in what sites like oDesk make possible to create a market that means people can’t earn a decent living. I do actually see that risk and think it is real. I don’t think trying to block commerce because of this risk is an effective strategy. I do think many millions of people can be helped (and some will be hurt). I think we are better off trying to help those that want to work in such a way to do so.

I do worry that we may well not have decent work for people that are not interested in highly valuable skills and/or are not willing to work (just expect to be given the rich life many of those in places like the USA got to have the last 70 years without much effort). As long as we have corrupt politicians selling out the country to those giving them cash the richest 20% in the USA will have huge trust funds to live off, so they will be rich. Those that aren’t living off trust funds or inheriting huge windfalls will have risks to survive.

They are still economically super lucky to have been born in the USA so I don’t really feel very sorry for them. But yes, there are real risks to the easy riches that we have had (and even so many in the USA struggled even while we have the richest middle class the world has ever seen in the richest country the world ever saw). But it is going to be harder going forward (at least comparatively to the rest of the world contemporaneously) – compared to the struggles people had 100 years ago I am not at all sure it will be more difficult for the average kid born in 2010 than it was for the average kid born in 1910 (especially if average doesn’t mean white boy but everyone and both boys and girls).

Iskandar is 5 times the size of Singapore and is in the state of Johor in Malaysia. Johor Bahru is the city which makes up much of Iskandar but as borders are currently drawn Iskandar extends beyond the borders of Johor Bahru.

The prospects for economic growth in Iskandar Malaysia in the next 5, 10 and 15 years remain very strong. They are stronger than they were 5 years ago: investments that produce economic activity (theme parks, factories, hospitals, hotels, retail, film studio…) have come online and more on being built right now.

Cooperation with Singapore is the main advantage Iskandar has (Iskandar is next to the island of Singapore similar to those areas surrounding Manhattan). It provides Iskandar world class advantages that few other locations have (it is the same advantages offered by lower cost areas extremely close to world class cities – NYC, Hong Kong, London, San Francisco etc.). Transportation connections to Singapore are critical and have not been managed as well as they should have been (only 2 bridges exist now and massive delays are common). A 3rd link should be in place today (they haven’t even approved the location yet).

A MRT connection to Singapore (Singapore’s subway system) should be a top priority of anyone with power interested in the future economic well being of Iskandar and Johor. Johor Bahru doesn’t have a light rail system yet this would be the start of it. It has been “announced” as planned for 2018 but not officially designated or funded yet.

Transportation within Iskandar is also a big concern. This is good now. I worry they will become as bad as Kuala Lumpur which would be a horrible outcome. JB had the chance to build a good transportation system and avoid the economically extremely costly friction of bad transportation system that KL is stuck with. If JB does this well, JB will be the economic center of Malaysia in 2030. If this is messed up the economy of JB will suffer a great deal.

The health of Malaysia’s economy will also have a large role to play. Overall things are very positive on this front though government and consumer debt are getting to be serious problems.

Economics is often tricky. Externalities (like pollution – essentially externalities are positive or negative impacts that are not captured economically by the market transaction, so economic theory requires government to implement policies to take externalities into account) are easy to ignore, for a awhile). So you have situations like China where huge negative consequences (health risks, health care costs, costs to pay staff to accept unbreathable air…) are taken on and short term economic gains seem better than they are.

Economic bubbles create lots of golden eggs. They are false golden eggs though. They are only available as long as the bubble tempts people to ignore the real economic worth. And cleaning up after bubbles burst is extremely costly and damaging to economies (especially ones that have high debt and are not lucky enough to have a fiat currency that the global market accepts – the USA).

I am extremely skeptical of the boom in luxury housing in IM. I don’t see the boom in very high paying jobs that create a sustainable demand for luxury housing. The transportation links to Singapore are not great enough to allow the jobs to all be in Singapore. Even if they were that is a risky model to be completely dependent on Singaporean jobs for over 50% of the housing being built now in Iskandar. There is likely to be a dependence on Singapore jobs to sustain many of those living in IM but for it to a strong economy there have to be a reasonable number of high paying jobs in Iskandar.

Right now, it seems to me (I would really need to have much more data to be more certain as I don’t have nearly enough data now), that there is a bubble in luxury housing in IM. I think the government is wise to take bubble suppressing steps. Doing so is never easy. Getting it exactly right is very hard. I think they waited to long, which then means the bubble has inflated and makes taking the right steps even harder.

On the good side of things, real estate prices were extremely low 10 years ago. So while prices have increased a great deal they are still not exorbitant compared to other desirable areas (Singapore, KL, Penang, Bangkok…). Of course, JB hasn’t been on comparable terms with those locations. I truly believe IM has the potential to do so, and thereby justify even higher prices going forward. But that is dependent on maximizing the Singapore location benefits and while lots of good things are happening on that front, more is needed. And more is needed quickly.

The riskiest area for IM is a huge oversupply of luxury housing. It would be foolish of the government not to address this risk. Wether the steps taken are correct or not, I am not sure, but I think they are a reasonable guess and basically are wise. Things should be watched and adjusted as needed. The policy change I like the least is the 1 million MYR limit (I would do no more than 750,000 MYR if it were up to me).

What I see as the top priorities

• reducing speculation in luxury housing in Iskandar
• reducing government debt levels
• reducing consumer debt levels
• increasing the number of high paying jobs in IM – focus on health care is good (I more could be done there I would try), finance is another good target, manufacturing is decent but I seriously doubt IM will have huge numbers of high paying/high skilled manufacturing jobs (some yes, but limited). I would also target high tech, software development etc. I would work closely with organizations in Singapore and KL. I would focus a significant amount of effort on this area). Education is good (and worthily of continued effort) but provides limited high paying jobs. If engineering and entrepreneurship programs can be developed that integrate with high tech business community that is the path to huge success for JB (pretty much everywhere else on earth would like to pull this off so there is lots of competition – JB has better than average potential with Singapore next store and the Malaysian economy and efforts such as IRDA and decent English language skills for students – improving English would help).
• increasing the tax base (sales taxes make sense), hotels and retail are great (especially when they attract tourists and you get tax dollars on others – not just your citizens)
• transportation – MRT, busses in JB, roads, taxis… Should be worrying about JB’s own MRT system (even if that is a long term issue, planning should be done now, building should likely begin within 5 years – beyond just the initial few stations linking to Singapore, it should be over 12 stations in JB by 2025 – likely a north/south line and east/west). Should likely also plan on 2nd and 3rd link MRT connections to Singapore by 2025 would be nice, but certainly by 2030 I would think?
• increasing number of jobs overall – this seems to be fairly well done but looking down the road 30 years the issue is going to be raising the pay level (lots of retail and tourist related jobs are good at first but they are low paying jobs in general)

Related: The Growing Market for International Travel for Medical Care – The Potential of Iskandar is Very High but Investing in Iskandar has Risks (2011) – Iskandar Housing Real Estate Investment Considerations – GDP Growth Per Capita for Selected Countries from 1970 to 2010 – Channel News Asia Report on Iskandar

One area this impacts greatly is the workplace. More and more people are working internationally. This continues to largely be either through large multinationals or cheap labor that is imported to do largely unskilled or minimally skilled labor.

There is also a continuing increase in skilled and educated labor working overseas for other than huge multi-nationals. The infrastructure to support this is often not in place. The current structure (visas etc.) support the two modes mentioned above.

But I see an increasing number of opportunities for countries that encourage entrepreneurship and high skill jobs. I relocated to Malaysia and in doing so did a bit of research. It is difficult to get a long term visa in most countries without a full time job (and given the complexity of hiring foreign workers this often means dealing with companies that do a lot of it – in the 2 categories mentioned above).

Career prospects are enhanced with international experience. One way to get a jump start on your career is international education. This has been popular for a long time but is becoming more and more popular. Students studying in London can get the benefits of international experience (unless they are from England, obviously) and enjoy the great city of London and accessible travel to Europe.

The importance is to truly gain an international perspective. Those in the USA have the greatest problem as knowledge workers in most other countries are much more aware of the global economy. Europe is an easy way to get started and is packed with lot of great schools and processes in place to make it easy to become a student.

As I mentioned in a previous post, I believe the most important factor for a career is finding something you love to do, but within those possibilities it is nice to know the payoff of different college degrees.

Those that see Asia as the economic engine for the next 50 years might well be tempted to look at attending school there. There are plenty of options though it may take a bit more work on your part to make it happen. I think attending at least some portion of college internationally is a great idea as is getting international work experience early in your career.

Related: How to Balance the Benefits of Foreign Workers and the Potential Damage to Citizen’s Job Prospects – Leading Economic Freedom: Hong Kong, Singapore, New Zealand, Switzerland –

I think one of the things I would do is to make it cost more to hire foreigners. Just slap on a tax of something like $10,000 per year for a visa. If what I decided was actually going to adopted I would need to do a lot more study, but I think something like that would help (maybe weight it by median pay – multiple that by 2, or something, for software developers…).

It is a complex issue. In general I think reducing barriers to economic competition is good. But I do agree some make sense in the context we have. Given the way things are it may well make sense to take measures that maybe could be avoided with a completely overhauled economic and political system.

I believe there are many good things to having highly skilled workers in your country. So if the problem was in recruiting them (which isn’t a problem in the USA right now) then a tax on the each visa wouldn’t be wise, but I think it might make sense now for the USA.

I think overall the USA benefits tremendously from all the workers attracted from elsewhere. We are much better off leaving things as they are than overreacting the other way (and being too restrictive) – but I do believe it could be tweaked in ways that could help.

Outsourcing Made by India Seen Hit by Immigration Law

Related: Relocating to Another Country – Working as a Software Developer – Science PhD Job Market in 2012 – Career Prospect for Engineers Continues to Look Positive

The problem was most extreme in Greece where almost two-thirds of those under-25 are unemployed. The rate was 62.5% in February, the most recently available data.
…
Youth unemployment in Spain is 56.4%, in Portugal 42.5%. Italy recorded its highest overall unemployment rate since records began in 1977, at 12%, with youth joblessness at 40.5%. Economists said that the rise in unemployment was fairly broad-based with rises in so-called core countries as well, including Belgium and the Netherlands. The rate in France was 11%.
…
Ireland recorded one of the biggest falls in unemployment, down to 13.5% from 14.9% a year ago. That compares with a rate of 7.7% for the UK, where youth unemployment is 20.2%. The lowest rates for youth unemployment were in Germany at 7.5% and Austria at 8%.

Unemployment continues to be a huge problem. The slow recovery from the great recession caused by the too big to fail financial institutions continues to do great damage. That damage is very visible in unemployment figures and the huge transfer of wealth from savers to bail out otherwise failed financial institutions (that not only haven’t been made to be small enough to fail but continue to pay themseves enormous bonuses while taking the billions in transfer of wealth from retirees that have had their income sliced by the interest rate policies necessatated to bail out the bankers).

The USA employment situation is still bad but has actually could easily be much worse. Unemployment in the USA stands at 7.5% now (the rate for teenagers is 24.1%).

Related: 157,000 Jobs Added in January and Adjustments for the Prior Two Months add 127,000 More (Feb 2013) – USA Unemployment Rate Drops to 7.8%, 200,000 Jobs Added (Oct 2012) – USA Adds 216,00 Jobs in March and the Unemployment Rate Stands at 8.8% (March 2011)

The number of unemployed persons, at 12.3 million, was little changed in January. The
unemployment rate was 7.9% and has been at or near that level since September 2012.

Among the major worker groups, the unemployment rates for adult men (7.3%), adult women (7.3%), teenagers (23.4%), whites (7.0%), african-american (13.8%), Hispanics (9.7%), and Asians (6.5%) showed little or no change in January.

In January, the number of long-term unemployed (those jobless for 27 weeks or more) was about unchanged at 4.7 million and accounted for 38.1% of the unemployed. The continued high level of long term unemployment is a continuing concern.

Health care continued to add jobs in January (+23,000). Within health care, job growth occurred in ambulatory health care services (+28,000), which includes doctors’ offices and outpatient care centers. In the last year, health care employment has increased by 320,000.

Manufacturing employment was essentially unchanged in January and has changed little, on net, since July 2012.

Average hourly earnings for all employees on private nonfarm payrolls rose by 4 cents to $23.78. Over the year, average hourly earnings have risen by 2.1 percent. In January, average hourly earnings of private-sector production and nonsupervisory employees increased by 5 cents to $19.97.

Related: 243,000 Jobs Added in January 2012 to Bring the USA Unemployment Rate Down to 8.3% – USA Unemployment Rate Remains at 9.7% (Feb 2010) – What Do Unemployment Stats Mean?

So with this report another 255,000 (171 + 50 + 34) were added, quite a good number. If we could see 250,000 jobs added for 12 more months that would be quite nice – though still will not have recovered all the jobs cost by the too-big-too-fail credit crisis.

Employment growth has averaged 157,000 per month thus far in 2012, about the same as the average monthly gain of 153,000 in 2011.

Hurricane Sandy had no discernable effect on the employment and unemployment data for October. Household survey data collection was completed before the storm, and establishment survey data collection rates were within normal ranges nationally and for the affected areas.

Long-term unemployment remains a problem, in October, the number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 5.0 million. These individuals accounted for 40.6% of the unemployed (a higher percentage than normal – as it has been for the duration of the too-big-too-fail job recession.

The civilian labor force rose by 578,000 to 155.6 million in October, and the labor force participation rate edged up to 63.8%. Total employment rose by 410,000 over the month (I am guessing this is not seasonally adjusted – the highlighted figures normally quotes are seasonally adjusted figures). The employment-population ratio was essentially unchanged at 58.8%, following an increase of 40 basis points in September.

Related: Unemployment Rate Reached 10.2% (Oct 2009) – USA Economy Adds 151,000 Jobs in October and Revisions Add 110,000 More (Oct 2010, unemployment rate at 9.6%) – USA Unemployment Rate Drops to 8.6% (Nov 2011) – USA Lost Over 500,000 Jobs in November, 2008

Health care added 31,000 jobs in October. Over the past year, employment in health care has risen by 296,000.

Manufacturing employment changed little in October. Since April of this year manufacturing employment has shown little change. Manufacturing output has been raising and if we sustain the recovery I would not be surprised to see jobs added in manufacturing, which is not a common result in the last few decades.

In October, the average workweek for all employees on private nonfarm payrolls was 34.4 hours for the fourth consecutive month. The manufacturing workweek edged down by 0.1 hour to 40.5 hours, and factory overtime was unchanged at 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls edged down by 0.1 hour to 33.6 hours.

In October, average hourly earnings for all employees on private nonfarm payrolls edged
down by 1 cent to $23.58. Over the past 12 months, average hourly earnings have risen
by 1.6%.

The huge federal deficient and continued extreme actions by the fed to bail out too-big-too-fail financial institution are serious problems. But the short term effect on the job market in the USA has been fairly amazing. It is amazing we were able to restrain the impact of the extremely bad policies that created the huge mess and led to over 10% unemployment and the shedding over over half a million jobs a month for several months this effectively (even with the huge debt and worrisome actions by the fed).

We can’t continue to provide huge benefits to too-big-fail institutions and allow massive speculation backstopped by fed bailouts on top of huge federal deficits. I am very worried about the long term consequences of the current policy but it has been more successful in the short term than anyone had the right to sensibly hope for (even though plenty of people hoped for even better results). Those optimists, I think, failed to appreciate the dire straits we got ourselves into. And people continue to downplay the dangers caused by the continued massive actions by the Fed and huge deficits.

The most surprising thing to me about this graph is how stable employment was through 2000. From 1980 to 2000 the most common idea was the USA no longer manufactured anything. This idea was wrong, as I have written about previously: Chart of top 15 countries manufacturing output over time (2009) – Top 10 manufacturing countries in 2006. But I did think employment declined more from 1970 to 2000.

One factor in this perception is that the number of employed people in the USA has continued to grow. So even remaining somewhat stable from 1970 to 2000, as a percentage of the labor force the jobs kept shrinking. The more important factor that played on people emotionally is factories being shut down got much more attention in the news than new jobs being added. So the perception was tons of jobs were being lost and none were being gained.

In 1980 manufacturing jobs accounted for over 22% of USA jobs; by 1990 that fell to 17%, by 2000 to 14% and by 2010 to 10%.

Related: Manufacturing Employment Data: USA, Japan, Germany, UK… 1990-2009 – Chart of Manufacturing Output as Percent of GDP by Country – Federal Reserve Economic Data (data for the included charts)

The unemployment rate declined from 8.1% in August to 7.8% in September. For the first 8 months of the year, the rate held within a narrow range of 8.1 and 8.3%. The number of unemployed persons, at 12.1 million, decreased by 456,000 in September.

The number of long-term unemployed (those jobless for 27 weeks or more) was little changed at 4.8 million and accounted for 40.1% of the unemployed. This remains one of the most serious problems – along with the less that strong job creation numbers (since the too-big-too-fail financial crisis kicked off the great recession). In 2012, employment growth has averaged 146,000 per month, compared with an average monthly gain of 153,000 in 2011. 150,000 is decent but because of the huge job losses in the 4 years prior to 2011 there is a big recovery needed. Adding above 225,000 jobs a month, for years, would be a good result and put the economy on much firmer ground.

Health care added 44,000 jobs in September. Job gains continued in ambulatory health care services (+30,000) and hospitals (+8,000). Over the past year, employment in health care has risen by 295,000.

The average workweek for all employees on private nonfarm payrolls edged up by 0.1 hour to 34.5 hours in September. The manufacturing workweek edged up by 0.1 hour to 40.6 hours, and factory overtime was unchanged at 3.2 hours. The average workweek for production and nonsupervisory employees on private nonfarm payrolls was unchanged at 33.7 hours.

In September, average hourly earnings for all employees on private nonfarm payrolls rose by 7 cents to $23.58. Over the past 12 months, average hourly earnings have risen by 1.8 percent. In September, average hourly earnings of private-sector production and nonsupervisory employees increased by 5 cents to $19.81.

Related: Bad Jobs News in the USA, Unemployment Remains at 9.1% (Sep 2011) – USA Unemployment Rate at 9.6% (Sep 2010) – Unemployment Rate Increases to 9.7% (Sep 2009) – Over 500,000 Jobs Disappeared in November 2008