Postcard from Bishkek

Yesterday, I came across a new statistic … new to me, that is … (P2P – Payroll to Population) … and it got me thinking.

The statistic is one of the metrics collected and reported by the Gallup – a Market Research organization that conducts surveys and polls in over 160 countries worldwide.  They seem to have “introduced” it a couple of years ago, (in 2012), but have been collecting the data from about 2005.

They conduct surveys involving about 1000 interviews, (either by telephone or face-to-face), in each of the countries where they operate, and among the data collect is information about age and employment status, which they use to create the new metric.

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The headline that originally caught my eye said: “U.S. Payroll to Population Rate 44.2% in November”.

My first thought was “That can’t be right!  it implies an unemployed rate of something like 56%“.  (Here in Kyrgyzstan, for example, the official unemployed rate is only something like 8 or 9%).

It only took me a second or two, however, to realize my mistake … or should I say mistakes:

1. Employment statistics, such as unemployment rates, don’t usually use the whole population as a basis for percentages, but the “workforce” – that is the people of working age who are in or seeking employment.Actually, when I started looking into the statistic I discovered that it actually misnamed – it doesn’t refer to the whole population … but to the adult population- aged 15 or over.
2. Payroll doesn’t mean those in work, but those who are in full time employment for an employer … not, for example, the self employed, nor those who are employed part time.  (It defines those in full time employment as working a minimum of 30 hours a week.)In 2012, for example, theyAt first, I had thought “it doesn’t include children and pensioners” … which could be important in a country like Kyrgyzstan where this could account for a third of the population. However, I then discovered that it was a percentage of the entire adult population – of 15 year olds and older … so although children are excluded, pensioners are not.

Gallup felt that the new statistics better related to GDP and economic performance than the traditional measures, because it is not affected by the participation rate,  citing the fact that when work is scarce people might actually drop out of the workforce – i.e. they stop actively looking for work. 

In 2011, for example, they discovered that 38% of the adult population (aged 15 or older), “were not in the workforce”, (that is, not working and not actively looking for work), and that   the number of self employed people (that is, working full time for themselves) was 19%.

Back in 2012, when Gallup released figures based on the data they had collected collected in 2011 … which showed that Sweden, Belarus, and Israel had the highest rates in the world (in 2011) and were the only countries where the percentage was 50% or higher. Only 19 countries had a Payroll to Population percentage that was 40% or higher. Most of the countries at the top of the list had a large percentage of adults employed in the services sector, (which included government employees).

The Global figure was just 27%.  In 2012 it dropped a whole percentage point to 26% … and that’s what it was last year.  That’s about 1.3 billion people around the world are employed full time for an employer … and receive a paycheck.

They also discovered some important regional differences.  For example, in the Middle East and North Africa there was a substantial proportion of the population that were, voluntarily, “not in the workforce” – especially women.

In South East Asia, East Asia and Sub-Saharan Africa, (which include some of the poorest nations in the world where people really struggle to “make a living”), there were relatively high rates of self-employment.  Hence high rates of self-employment may be an indicator of a lack of good job opportunities.

In more developed countries, self-employment is often seen as providing energy to the economy and fueling growth … but it can also mean subsistence work and also be a part of the “informal economy”.

Further they suggested, higher rates of P2P not only better reflect GDP, but may also have a positive impact on “wellbeing” … Indeed, Jim Clifton, the Chairman and CEO of Gallup, stated that their research showed that “what everyone wants the most is a good job …  nothing outranks it: not the desire for family, peace, religion, or anything else” …

… adding that, “of the 5 billion people age 15 or older, 3 billion want a good job, but there are only 1.2 billion of them to go around — so there’s a shortfall of more than 1.8 billion good jobs.”

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It made me wonder about the situation here in Kyrgyzstan:

The figure for Kyrgyzstan in 2013 was 18% … better than that for Tajikistan (13%) but well behind Uzbekistan, (23%), China, (28%), or Kazakhstan, (33%), yet alone, Japan and Australia, (outstripped by Kazakhstan at just 31%), the UK (which was, actually, one of the better European results at 37%), New Zealand (41%), the US (43%) and Russia (51%) …

… and here is a table of the results for 2012, (I couldn’t find one for the 2013 figures):

 

As I said … “it got me thinking”.

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