Meet the 28-Year-Old Grad Student Who Just Shook the Global Austerity Movement

[mrdmk]

98. Once had a private conversation with one of my math professor

He cited a Wall Street Journal Opinion piece that unions were the cause of high unemployment rates in Europe (year 2006).

Went home and did some research.

Used the CIA Factbook to find the unemployment rate for all European countries and did a simple means average. Yes Europe had a 10% unemployment rate as the article stated. One further examination of unemployment rates, it was found that ex-Yugoslavian countries (Serbia, Bosnia and Herzegovina, and Croatia) had a unemployment rate exceeding 50%. These countries were still recovering from a war.

Having an unusual high rate (an out-liner), not to mention an economy ruined by a war (anonymity), these three countries were taken out of the equation. To keep the data correct, three countries at the other end of the spectrum were taken out of the equation, Finland, Sweden, and Norway which had a 2% unemployment rate. Low and behold, the European unemployment rate was at 6%.

Also, this should be mentioned Poland had an unemployment rate of 40% in 2006 because of an economic adjustment. It was left in the equation.

Here is a statement of fact, according to most economic studies, the unemployment rate needs to be between 4% to 6% to keep inflation in check. In 1999, the U.S.A. had a 3.5% unemployment rate with no significant high inflation rate. The U.S.A. is at 7.4% unemployment rate with a 2.8% inflation rate when last checked. The 4% to 6% figure is part of the theory of wage inflation.

With the 6% unemployment rate, methodology, and figures in hand I approached my math professor after class to discuss the conclusion of the Wall Street Journal opinion piece. He did not want to discuss the article or the findings. He also accused me of, 'not allowing him to teach the class the way he wanted to!' That is a heavy accusation to a student. I am sure I am not the first one.