Monday, February 13, 2012

Czech and US unemployment numbers do a flip!

Since 2008, the year of the big financial crises on Wall Street, US unemployment has been a concern. One of the major campaign issues in the 2008 residential election was how to lower that rate, and get the US economy "moving again". So it's good news that, according to the US Department of Labor, Bureau of Labor Statistics, the unemployment rate has been falling in the USA since 2010:
  • Jan 2012 rate of 8.3%;
  • 2011 yearly rate of 8.9%;
  • 2010 yearly rate of 9.6%
  • 2009 yearly rate of 9.3%
By contrast, according to the Czech Ministry of Labor and Social Affairs, the Czech unemployment rate has risen sharply just this year:
  • January 2012 rate of 9.1%
  • 2011 yearly rate of 6.8%
For the US, the fear came from Wall Street's assessment that the failure of a few huge financial institutions in 2007--2008 would cause the entire economy to crash.
As the past four years have passed without a crash, confidence has grown, and people are starting to want to invest their money, not hide it in a sock.

When money is put back into circulation for capital growth, housing starts and mortgages, and consumer spending, the economic data improves, and people gain even more confidence. Since all economies are based on confidence in the future and in reliable social cohesion, good numbers=a good economy. The unemployment rate falls as new jobs are created, and people are not afraid to change jobs or retire, creating openings. It's all good.
According to,
"The data show that the Czech budget deficit has been growing faster this year than in 2010, while Czechs spent less in July 2011 compared to one year ago."

Yes, the deficit grew, in large part because the EU did not make the massive Euro grants that the Czechs have grown to depend on, not because Czech manufacturing was down or Czech government expenditures were up. The Greek, Italian, Irish and Spanish financial crises frightened the Europeans much as the Wall Street mess scared the Americans; the reaction of halting spending froze all the EU economies, as governments and people stopped spending.

What's peculiar about the Czech rise in unemployment is that the Czech economy itself is not in such bad shape, relative to the rest of the world. Actually, it's in good company.
According to the most recent numbers in the CIA Factbook (, here are some nations with significant deficits:

revenues: $2.264 trillion
expenditures: $3.604 trillion

Czech Republic
revenues: $87.25 billion
expenditures: $97.03 billion (2011 est.) 

revenues: $1.383 trillion
expenditures: $1.547 trillion (2011 est.)
revenues: $1.582 trillion
expenditures: $1.643 trillion (2011 est.)      

revenues: $1.555 trillion
expenditures: $1.681 trillion (2011 est.)
In contrast, a few countries are not in debt, but run a surplus:
South Korean glamour
South Korea
revenues: $267.9 billion
expenditures: $242 billion

revenues: $222 billion
expenditures: $216.8 billion
revenues: $283.8 billion
expenditures: $219.3 billion (2011 est.)      
revenues: $943 million
expenditures: $820 million

Saudi Arabia
revenues: $293.1 billion
expenditures: $210.6 billion (2011 est.)           
So why, then, has the US economy regained its impetus to expand, while the Czech economy is stuttering to a halt? Both have deficits, but, as we can see from the numbers in the CIA factbook, deficits don't cause countries to stop being leaders in the world economy. And surpluses don't always lead directly to world economic domination.

Psychologists would, perhaps, say that national character, historic self-perceptions and social relations are as important to economic health (as defined by the unemployment rate) as are such tangibles as budget deficits and industrial stability. In other words, what a nation believes about itself is the key to economic growth and sustained employment prospects for its citizens. Perception is powerful.

Of course, these statistics are, in a sense, "just numbers," as they don't reflect the individual trials of a person looking for a job in a climate of fear and uncertainty, due to poor economic growth numbers. But looking at unemployment as a reflection of an entire nation's culture, rather than as a personal failing, may ease the pain of not having a job.

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