Learning from the Changing US Unemployment Measure

Bureau of Labor Statistics
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I see this quite often in both business and government . . . a change to the operational definition in a number.  The change in operational definition is often used to show improvement or to advance some political thinking.  This is more manipulation than improvement or real change.

The Bureau of Labor Statistics has change the operational definition of the US Unemployment statistic.  The change is including the unemployed for 5 years rather than two years.  This means after five years the unemployed don’t get counted.  This will increase the unemployment number as more will be included.

This does not mean the new five year measure is better or worse, but just different.  Comparison purposes will not be relevant following this change to the operational definition.  The government may believe that the new number is more representative than old . . . and may be right.  But we now have lost a consistent measure to know whether the economy is getting better or not.

Manipulation of business or government measures are used to achieve bonuses, describe things as better or worse than they are, and a number of other reasons.  One doesn’t have to look far to see how measures get exploited for causes.  Even the Dow Jones adds and deletes companies that changes the measure of the financial markets.

Consistency in measuring is important so there is knowledge on the true status of an organization.  Otherwise, we are only fooling ourselves about whether things are improving or not.

Leave me a comment. . . share your opinion!  Click on comments below.

Tripp Babbitt is a speaker, blogger and consultant to service industry (private and public).  His organization helps executives find a better way to make the work work.  Read his articles at Quality Digest and his column for CustomermanagementIQ.com  Download free from www.newsystemsthinking.com “Understanding Your Organization as a System” and gain knowledge of systems thinking or contact us about our intervention services at [email protected].  Reach him on Twitter at www.twitter.com/TriBabbittor LinkedIn at www.linkedin.com/in/trippbabbitt.

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