Quantifying the evil of unemployment

Imagine an industry had, through its own recklessness, caused over 10,000 deaths in the UK. Or imagine that a government minister had, by his own stupidity, caused hundreds of deaths. There would surely be demands for severe punishment.

But in a sense, this is just what has happened, with pitifully little outcry. This is because, in utilitarian terms, the misery caused by mass unemployment is equivalent to very many deaths.

Let's start from the ONS's survey on the question: "overall, how satisfied are you with your life nowadays?" On a 0-10 scale, the unemployed report an average of 6.47 whilst the employed report an average of 7.53, If we assume the causality runs from employment status to well-being (so that being grumpy doesn't cause folk to lose their jobs), this means that unemployment costs the individual 1.06 "utils." On the same scale, married people score 7.72 whilst the widowed score 7.26 - so the death of a spouse costs 0.46 "utils."

Now, this doesn't mean unemployment is worse than the death of a partner. A person's death represents a loss to his other family and friends. Let's assume (maybe generously) that 20 others feel as bad as the widow. This gives us a total bereavement loss from death of 21 x 0.46 = 9.66 points.

In utilitarian terms, then, the death of a loved one is 9.1 times as bad as unemployment. But this isn't the end of the story. Death is permanent but unemployment isn't. Let's therefore weight the two events by duration.

Latest labour market flows data (pdf) show that during Q4 2012, 595,000 of 2.48m people moved from unemployment to work, which implies an average unemployment duration of just over a year. For simplicity, let's call it a year. How much longer does bereavement last?

Not long! Andrew Clark and Yannis Georgellis have estimated that there is "complete habituation" over time to widowhood; it takes an average of one year for men and three for women to return to their pre-bereavement level of well-being. Let's split the difference and assume two years of breavement. Let's assume it takes as long for family and friends to adjust. This gives us a total bereavement cost of 21 x 2 x -0.46 = 19.3 "utils".

To this, we must add the fact that death represents a loss of well-being to the deceased. Let's call this a drop 7.72 utils, the average for a married person. And let's assume, arbitrarily, that had our subject not died when he did, he'd have enjoyed another 10 years of this utility. This gives us a total utility cost of death of 96.5 utils.

This gives us a utility cost of death of 91 times that of unemployment.With unemployment now 944,000 higher that at the end of 2007, this implies that the welfare cost of recession is equivalent to the deaths of over 10,000 people.And if you think Osborne's misjudged fiscal policies have added more than around 24,000 to unemployment - and I suspect his critics would put the number far higher - then he is, in utilitarian terms, worse than Britain's worst serial killer.

Now, this calculation isn't intended to be remotely precise; it's a Fermi estimate. How should we respond to it? There are, at least, three possibilities:

1. It shows that there's something fishy about happiness research.

2. It shows that utilitarianism is wrong. Causing someone's unemployment is qualitatively different from causing someone's death - especially if you intend one but not the other - and you just cannot compare them on the same scale.

3. It shows that unemployment is indeed a social evil of huge magnitude, a fact which we don't realise because the jobless are socially and politically marginalized.

Personally, I'm not sure how to respond.

Comments

[Anonymous]

" 2. It shows that utilitarianism is wrong. Causing someone's unemployment is qualitatively different from causing someone's death - especially if you intend one but not the other - and you just cannot compare them on the same scale."

Mapping on to a utils scale makes these things commensurate, does it not?

Personally, I find the approach used above appealing.

[Alex]

All three are true I think. But I'd add another, perhaps written as a caveat>>>

4. Can all things of value, including the complexity of human existence and experience REALLY be understood at all in numerical terms?

[Anonymous]

@Alext

Not understood, just valued. That's all mapping on to a utils scale attempts to do.

[Luke]

Alex, I think the answer to your last point is "no". But sometimes it's worth having a look in numerical terms, just to see what they throw up. Maybe that some of the figures are suspect, or maybe that we have been missing some great evil (or good).

So in this case, I have some suspicion about the habituation to widowhood figure - I think it may hide some important differences between the effect at different ages. But still that's probably not enough to derail Chris's point that unemployment matters.

[chris]

There is a mistake in the above calculation. The drop in utility for widows is an average of those who were recently widowed, and have suffered a big loss, and those who were were widowed years ago and have habituated.
(The drop in utility for the unemployed is also an average of the recently and distantly sacked, but as the unemployed don't habituate, and as most would have been sacked recently, the average fall probably conceals less variation.)
It is therefore wrong to duration-weight the loss of utility in the way I did. I'm not sure this overturns my basic point though.

[John H]

4. All of the above.

[Danny]

When choices present themselves and different options need to be weighted according to their value, quantification must be done, else the decision-maker is just guessing or mindlessly fudging and not budging from preconceived notions. In other words, there's no higher-level of cognition invoked in the decision.

Also, re #2.: 'Quantification of utility' is presented in this article as being synonymous with 'Utilitarianism', which is not exactly accurate. Quantification is certainly the way to go, in my opinion, but that doesn't make a quantifying-decision-maker a utilitarian. Utilitarianism dictates a relatively simple calculus for justice that I, for example, don't exactly agree with.

[Min]

Unemployment causes actual deaths. As a ballpark figure, the death rate more or less doubles. Physical diseases and mental disorders increase. Families break up. Unemployment is a public health issue.

[rogerh]

So, do we owe a duty to our fellow citizens not to inflict misery? Which begs the question 'are we a society or individuals?'. Seems to me we pick and mix this distinction according to our own advantage or the advantage of those purporting to run government, sometimes 'we are all in this together' and sometimes 'this is your own responsibility'.

One person's misery may be another's pleasure - HS2, building on Green Belt, closing down coal mines etc etc. Strong utilitarianism may make the decisions open and rational but equity would demand compensation to alleviate misery - which probably impacts the economics. Which gets to the point that being able to inflict misery without equity is a concomitant of power and economic advantage. But we knew that.

[Ralph Musgrave]

I’m sick to the back teeth of people who weep and wail about unemployment. They should all be forced to belt up, with the only people allowed to speak or publish material on the subject being those with bright ideas as to how to solve the problem. (I’ll allow Chris to do some wailing because he also produces bright ideas!!).

If the above policy were adopted, the problem would have been solved long ago.

The weepers and wailers are normally in it for the emotional pleasure. I.e. give them an article or paper that has a serious crack at solving the problem (and that necessarily requires a concentration span of far more than three minutes) and their eyes glaze over.

[ricketson]

The problem with these calculations is that they attribute unemployment to some person's actions. We don't know what causes unemployment or how to reduce/eliminate it over the long run.

To extend on Ralph Musgrave's thought, the people wailing about unemployment shouldn't be reading and writing articles, they should be building tools that allow the unemployed to make a living for themselves.

[Joseph Boughey]

I read most postings to this weblog with great interest, but this, and the comments, are so astonishing that I feel I must respond. But, it reveals such strangeness of thought (not by you personally, Chris)that it is hard to envisage that I am living on quite the same planet as some people.

Come to Planet Widowhood, where I found myself 11 years ago, and the idea of utility, or the adaptation to life events discussed by the cited authors, all seems very hollow and superficial. The idea that bereavement lasts for a short period and then the bereaved return to a previous state of well-being...well, if only. Don't be surprised, if and when it happens to you, if it doesn't happen quite so swiftly. But do not be surprised if others simply don't understand - it's not good for the labour market, and maybe our culture of consumption, for the impact of partner loss to be fully understood.

There are many flaws in the measures of "satisfaction" of the married and the widowed, but one of the problems with the latter is the significantly increased death rate of the widowed and the impact of post-loss suicide. To live through a major bereavement is, for many, to live through a major catastrophe. You may think that I exaggerate, but it's hard to overstress it. Measurements are just not helpful here.

Unemployment also has a catastrophic impact, whatver the reason, but its impact will vary greatly according to the financial consequences and, clearly enough, how soon the unemployed person finds themself back in employment or retired. Unemployed people may well be unhappy because of the severe stigma now attached to unemployment - the view that it is your fault, and that you need to be pressurised and penalised if you do not have a job. They may also be unhappy because becomning unemployed demonstrates what is often not fully appreciated - that most of us are just hired hands (when we are hired), have little control over what happens to us, and are at the mercy of others. And that, in reality, it is rational to feel fear, in a world that we do not control and in which the decisions of others can destroy most of what we value. Maybe in this sense there are grounds to compre the loss of employment with the loss of a partner- it can all happen without any sense of justice or any sense that we can control or influence events.

I agree with Alex - numerical measures can't shed much light on human experience. I could write a whole essay on this posting, but I'll leave it there.

[PoachedWonk]

Additional point, although the causality of unemployment and falling utility is probably (mostly right) surely there is also causality between unemployment and suicicdes, suicide rates have increased during the recession and there certainly is a correlation in countries like Greece.

So Osborne is even more of a bastard than first believed