Many citizens greatly overestimate unemployment

Unemployment is falling – but many citizens dramatically overestimate unemployment. Two out of five Germans think that unemployment is more than 20 percent. Among them are many supporters of protest parties.

That’s the way to the job center - but the Germans dramatically overestimate how many people actually go there.

IIs unemployment in Germany much higher than the official statistics show? The Left Party has been spreading this message for years. It is “time to act instead of tricking,” she commented on the recent decline in the officially measured number of unemployed to 2.2 million and a rate of 4.9 percent in April.

In fact, such views are apparently being echoed in growing sections of the population. According to a new study, many citizens overestimate the extent of unemployment, measured against the official figures, downright dramatically: No less than 40 percent of Germans estimate the unemployment rate to be more than 20 percent.

The study from the employer-related Institute of the German Economy (IW) entitled “Assessments of unemployment: ignorance promotes systemic mistrust” is available to the FAZ in advance. Based on an analysis of survey data, she puts the frequent criticism of “embellished” statistics into larger contexts.

The core results: The level of unemployment is not only greatly overestimated in the population, the extent of this overestimation has also been increasing for some time – which also applies to other countries. And at the same time there are connections between such perceptions and the influx of right-wing protest parties.

Overestimation increases

For Germany, surveys of the “European Social Survey” from 2016, a representative survey among more than 40,000 Europeans, provide the following picture: When asked what proportion of employable citizens they estimate to be unemployed or looking for work, more than two thirds of those surveyed gave values ​​of more than 10 percent. A good two-fifths rated the unemployment rate surveyed as being at least 20 percent. And a good one in ten even assumed a quota of more than 40 percent, show the researchers Matthias Diermeyer and Judith Niehues.

Results from 2008 allowed them to compare the times over eight years in which the German unemployment rate fell sharply. According to the more narrowly defined statistics of the International Labor Organization (ILO), it fell from 7.5 to 4.2 percent. However, this is hardly reflected in the assessments asked: Although the estimated values ​​in the area of ​​the already more realistic answers were slightly lower in 2016 than in 2008. But little happened in the group that had already estimated the rate at 20 percent or more at that time; it remained unchanged at 40 percent of all respondents. Apparently the upswing has not reached their heads. The extent of the overestimation in society as a whole has increased: in 2008 it was an average of 11.1 percentage points, and in 2016 it was even 13.6 percentage points.

Pessimism harms cohesion

Germany is not alone in this: an average of 23 European countries have overestimated their unemployment rates in their own country by 13 percentage points. Germany, however, belongs to a group of countries in which low unemployment meets a lot of pessimism – similar to the United Kingdom and the Netherlands.

The changes in the country comparison since 2008 are also interesting, because they can hardly be explained by the economic situation: Although the overestimation of unemployment has increased significantly in crisis countries such as Spain and Portugal, not in Finland and Germany.

Instead, a further step in the analysis shows that supporters of parties who are considered right-wing populist express the strongest misjudgments. In this country, almost one in two AfD supporters estimated the unemployment rate to be more than 20 percent. The same was true for Sweden and the Netherlands; in France and Austria the assessments of the supporters of the Rassemblement National and the FPÖ deviated even more strongly. In addition, the authors show with further analyzes: Those who strongly overestimate unemployment tend to be more likely to distrust politics and parliament – and also towards their fellow human beings.

Diermeyer and Niehues emphasize that the causal relationships at work here cannot be clarified in more detail with the data. One conclusion, however, stands to reason – namely “that a more realistic assessment of the economic situation can have a confidence-promoting effect”. You combine this with criticism of the nature of the labor market debate. As important as critical discourse is in a democracy, an “overly pessimistic and alarmistic presentation” would “call social cohesion into question” in the medium term.