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Wednesday, September 5, 2012

The Right Global Employment Metric: Payroll to Population

Through our World Poll, Gallup learned that what everyone wants the most is a good job. This is the will of the world, and nothing outranks it: not the desire for family, peace, religion, or anything else.

A good job, as defined by Gallup, is one that is 30+ hours a week for an organization from which employees receive a real paycheck. What’s not a good job is work that’s informal or some form of menial self-employment.

In what is perhaps the world’s most pressing problem today, 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.

I tell you all of this because most existing forms of employment data aren’t helpful at identifying and tracking this severe problem. That’s because those data lump the lousy jobs together with the good ones. This means that when you look at many countries’ unemployment figures -- including those reported by the U.S. Bureau of Labor Statistics -- the percentage seeking employment appears artificially low because the lousy jobs get counted as jobs -- but they’re not good jobs at all.

Do you think Guatemala’s unemployment rate is really 4%? Or that Iran’s is 15%? Our data suggest the real unemployment rates are much, much higher.

Even if we can get more accurate unemployment figures, the information is still incomplete. This is because whether a country thrives and prospers economically -- or faces social unrest and revolution -- is tied directly to whether its citizens have good jobs, as opposed to just any job at all.

To shine a light on countries’ real employment rate situations, Gallup is announcing today a new global standard. We call it “Payroll to Population” (P2P) and we think it will be the gold standard of employment metrics.

Payroll to Population is the right metric to track a country’s success or failure to develop real job growth.

We take the total number of people who actually hold a full-time job and report it as a percentage of the total population of adults aged 15 years and older. What makes this new standard a superior metric to classic, outdated unemployment figures is that the percentage of good jobs is a stronger indicator of real economic energy because it doesn’t get influenced by the ever-fluctuating “size of workforce” variable.

Gallup’s lead story today is our first report on Payroll to Population employment rates by country. This methodological breakthrough now advances the science of world leadership and real human development for the most serious of statistics -- having a good job, which is the very will of the world.


Leadership Skills said...
September 5, 2012 at 11:20 AM  

Why would you use 15 years+ as a base? How can a 15 or 16 year old hold down a full-time job? Wouldn't you at least choose above 18+. At least in the U.S. this would be the case.

Robert Toner said...
September 5, 2012 at 12:34 PM  

How does the P2P differ from other employment statistics in quantifying the number of available "Good Jobs"? By the definition of P2P: countries with earlier average retirement ages and high rates of tertiary education will have lower P2P rates. Defining a 'good job' as anything with more than 30 hours and a paycheck? This gives parity, for example, between a Foxcon laborer in China and an FNH worker in Belgium: situations which are clearly not of equal quality but give the countries equal rates on the P2P scale. There are a few improvements that could be made before I would consider this a "gold-standard".

Anonymous said...
September 5, 2012 at 10:57 PM  

@Leadership Skills. I had my first full-time job at age 15 working as a waitress in a restaurant and was extremely successful at it. Furthermore in a large part of the world, where the luxury of the teenage dream cannot be afforded, 15 is considered adulthood, women are married off at that age and boys must start making a contribution to support their ageing parents and young family.

Kevin said...
September 14, 2012 at 8:13 AM  

This article says Payroll to Population is based upon 15+ year olds. But the email from Gallup that got me here had another link to an article about the US, which says it looks at 18 and older. Which is it? (copied below)

Also, what about topping it out at 65 or 70? Is it fair to count all the retires against that ratio? I'd bet that negatively impacts countries with longer average lifespans.

U.S. Payroll to Population Rate at 45.3% in August

Just over 45% of Americans aged 18 and older were employed full time for an employer in August, according to Gallup's new Payroll to Population measure. This reflects a steady uptick since Gallup began collecting employment data in 2010.

JMac said...
September 14, 2012 at 8:14 AM  

Worldwide, how does this take into account adults in cultures that woild never choose to pursue a "good job"? I am referring to the elderly, mothers/wives who stay home to care for the family, the infirmed, etc. if you compare a culture where only 20% of the women work outside of the home with a culture where 80% of the women work outside of the home, doesn't it skew the results?

Anonymous said...
October 1, 2012 at 9:37 AM  

Is Gallup planning to report/update the Global Employment Tracking page? Would be nice to see and update.

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