Saturday, July 25, 2009

Unemployment Rate Blues

There's been a lot of coverage lately about Taiwan's highest unemployment rate ever: 5.9%

forbes

bloomberg

Taiwanese seem worried but, honestly, I can't help but laugh. Western countries' unemployment rates usually range in the 7 to 12% range in normal situations and, heck, we're in a global recession at the moment of huge proportions. By comparison, Taiwanese screaming about unemployment rates seem like Chicken Little (The sky is falling!).

Just how do unemployment statistics stack up across countries? Well there is a lot of dispute since some governments are less open about reporting unemployment statistics or have vastly different ways of calculating them (some countries do not include incarcerated prisoners in their statistics, a fact, that as some have pointed out, makes unemployment statistics in countries like the US artificially lower [feel free to correct me if I'm wrong about this]).

Wikipedia to the rescue! Found some good data to compare which needs to be taken with a grain of salt. However, the overall picture painted is clear.

Taiwan 5.82%
Japan 5.2%
China 9%
United States 9.5%
UK 7.6%
Germany 8.3%
Spain 18.7%
Russia 9.9%
Brazil 8.8%
Iraq 18.00%; 28% among youth; 83% among women

Compare these to:
Zimbabwe 90%
Andorra 0%

wiki

All this unemployment talk has made me think about ways that citizens of each country react to unemployment news. I look at a country like Spain in particular which has, in my opinion, a fairly high unemployment rate for the kind of country it is. No one is rioting in the streets there about unemployment. However, if it were Taiwan, people would be thinking it is the end of the world. So how does a country like Spain cope?

I think it has a lot to do with the capacity to absorb unemployed back home to the family and this is also a point in Taiwan's favor as well. Usually, the goal of western kids is to leave the nest and strike on their own and be independent. Living with parents has a stigma attached to it. However, traditionally, kids lived at home. In some cultures, having the kids at home later in life doesn't have a stigma attached. In fact, some parents are thrilled to keep their kids at home longer or indefinitely (think 'mama's boys' or 'failure to launch' types).

Spain is a Latin country with a strong family tradition (let's not forget those relatives too). In tough times, kids can come back home to roost. Is Taiwan so different? Lots of kids are living with their parents (who have relative huge savings compared to their kids) indefinitely or have no qualms returning home if things go wrong or they need a break.

In fact, now that I think of it, western kids trying to live apart from their family creates unecessary duplication (another house and related costs) and spending (buying bulk saves more money). If there just weren't such a stigma attached to living with parents forever!

Taiwan will do fine in the face of this higher unemployment. No riots here. The sky may feel like it's falling but the family unit and emphasis on Taiwan families taking care of their own will prevail.
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