Unemployment Does Not Equal Poverty

In this article David Leonhardt looks at the Gallup study of global unemployment and makes the point that a country can have vast poverty an yet still have low unemployment. It is a point that people of faith and conscience have been making for years, yet he seems to believe that it is surprising news (or at least he believes that his readers would view it as surprising).

In America we have often said that watching unemployment numbers so closely (as the media tends to do) misses the depths of what is happening to America as a whole. Our national income has been stagnating or declining for decades, even during times when our employment was high. That is because people are losing high paying jobs and finding low or modest paying jobs. When you leave a $30 an hour factory job and take a $15 an hour Wal-Mart job, you are still employed, but you are more poor. Every now and then the media pundits will note that, but then they quickly move on to jobless claims trench that they are more interested in and more familiar with. What they (and we) should be saying is that we have near ten percent unemployment and near twenty-five percent poverty. But we don't.

But here are Leonhardt's comments on the global picture, in which he comes reasonably close to making that point. 

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Unemployment Does Not Equal Poverty
By David Leonhardt
January 19, 2011

Perhaps the most surprising part of the new Gallup study of unemployment around the world is that poorer countries don’t tend to have higher jobless rates. After surveying workers in 129 countries, Gallup concludes that “there is no significant relationship between unemployment rates and GDP per capita.” The relevant chart, which shows basically no pattern:

So what makes poor countries poor? In part, they have too many part-time jobs and too many people working for themselves (in either case, making meager amounts of money).
Here’s the Gallup’s chart comparing per-capita gross domestic product and underemployment, a category that includes part-time workers who want to be working full time:

You’ll notice many more countries in the upper-left corner of the chart (rich countries, with little underemployment) and the lower-right corner (poor countries, with lots of underemployment) than in the other two corners.
The relationship between poverty and what Gallup calls “employed full time for an employer” is even stronger:

And that same relationship in map form:

The United States is the richest large country in the world, and it has a relatively small share of people who work for themselves or who work part-time against their wishes. Surprisingly, though, Gallup found that straight-up unemployment was higher in the United States than in Sri Lanka, Turkmenistan, Uganda, Niger, Bolivia, Vietnam, Chad, Belarus or China.