Abbott and Costello explain the unemployment rate

COSTELLO: I want to talk about the unemployment rate in America.

ABBOTT: Good subject… these are terrible times. It’s about 8%.

COSTELLO: That many people are out of work?

ABBOTT: No, that’s 16%.

COSTELLO: You just said 8%.

ABBOTT: 8% are unemployed.

COSTELLO: Right, 8% are out of work.

ABBOTT: No, that’s 16%.

COSTELLO: Okay, so it’s 16% unemployed.

ABBOTT: No, that’s 8%.

COSTELLO: WAIT A MINUTE! Is it 8% or is it 16%?

ABBOTT: 8% are unemployed, but 16% are out of work.

COSTELLO: But if you are out of work you are unemployed!

ABBOTT: No, you can’t count the out of work as the unemployed. You have to look for work to be unemployed.

COSTELLO: BUT THEY ARE OUT OF WORK!!!

ABBOTT: No, you miss my point.

COSTELLO: What point?

ABBOTT: Someone who doesn’t look for work can’t be counted with those who look for work. It wouldn’t be fair.

COSTELLO: To whom?

ABBOTT: The unemployed.

COSTELLO: But they are ALL out of work!

ABBOTT: No, the unemployed are actively looking for work. Those who are out of work stopped looking. They gave up. And, if you give up, you are no longer in the ranks of the unemployed.

COSTELLO: So if you’re off the unemployment roles, that would count as less unemployment?

ABBOTT: Unemployment would go down. Absolutely!

COSTELLO: The unemployment rate goes down just because you don’t look for work?

ABBOTT: Absolutely it goes down. That’s how you get to 8%. Otherwise it would be 16%. You don’t want to read about 16% unemployment, do you?

COSTELLO: That would be frightening.

ABBOTT: Absolutely.

COSTELLO: Wait, I’ve got a question for you. That means there are two ways to bring down the unemployment number?

ABBOTT: Two ways is correct.

COSTELLO: Unemployment can go down if someone gets a job?

ABBOTT: Correct.

COSTELLO: And unemployment can also go down if you stop looking for a job?

ABBOTT: Bingo.

COSTELLO: So there are two ways to bring unemployment down, and the easier of the two is to just stop looking for work.

ABBOTT: Now you’re thinking like an economist.

COSTELLO: I don’t even know what the hell I just said!

ABBOTT: Now you’re thinking like a politician.

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