WASHINGTON – The Financial Times is read by top executives and business leaders. And this is because supposedly it is a serious newspaper entirely devoted to accurate, in depth reporting on global economic and financial news. This being the case, as words and constructs are used to convey meaning, the words used by a leading financial publication to describe the economic situation in a major European country do matter.
What is “high”?
This is why I am really worried when an FT headline (June 9, 2015) says: Spain rebound gathers pace despite high jobless level. The problem here is in what do the FT editors mean when they write “high jobless level”. What is to be considered today high unemployment? In the past it was anything above 8 or 9%.
But Spain’s unemployment today is 24%. Is 24% the new definition of high? If so, what is “very high”? 30%, 40%?
How the story is told
The FT story is mostly about the good news that Spain’s economic growth exceeded recent IMF projections. In fact Spain may even reach 3.1% growth this year. There is some commentary in the article about the unpopularity of Prime Minister Mariano Rajoy, followed by analysis that tries to divine whether higher economic growth may increase support for his government.
24% is high
But you really have to read the whole piece before you get to the hard fact only alluded to in the title where there is a reference to a “high jobless level”. Spain’s “high” unemployment level, you discover near the end of the article, is in fact 24%. Yes, that is 24%.
By any traditional yardstick 24% is not just “high”. It is “catastrophic”, “monstrous”, “unbelievable”, take your pick.
The article does mention at the very end that the IMF report suggests stronger jobs creation measures: “There is still significant scope for measures that will foster job creation”.
Is this an accurate description?
Well, that’s it? This is an accurate and balanced analysis of a country still in the middle of a never ending economic tragedy? Apparently this is so. The FT publishes a fairly upbeat piece that says that Spain is doing a lot better than we thought, even though the government remains unpopular. And, yes, the fly in the ointment is unemployment that unfortunately is still high.
Obfuscation
So, what is the point of all this? The point is that even for a most prestigious, highly specialized financial publication, whose audience is composed mostly of sophisticated business leaders and decision-makers, it is alright to disguise the truth through euphemisms and bland adjectives that do not even remotely convey the gravity of a situation in a major European country.
Look, do not get me wrong. I am happy that Spain’s economy is growing again. This is relevant news, and it should be reported. But Spain’s unemployment level is still catastrophic, and not that different from what it was in the aftermath of the Great Recession of 2008.
Will Spain eventually climb out of this hole? Maybe. But even if the economy will expand to 3.1% in 2015, as the IMF predicts, it will take years to bring the unemployment level down to the 5% level that economists used to consider acceptable.
Years to get out of this hole
Again, at the cost of being repetitive, until not too long ago “high unemployment” in a developed country was 8 or 9%. Anything above 10% indicated a serious down turn. Jobless rates above 10% meant a crisis. And nobody characterized a jobless rate above 20% in a Western country, simply because this phenomenon did not exist.
Now it exists, and it persists. But for the editors of the FT this incredibly negative development is at worst a problem. Not a crisis. Spain’s 24% jobless rate is a bit high perhaps, but not alarming. The good news is that Spain’s economy is growing.
And this is what passes for accurate reporting in the FT, one of the best newspapers in the world.
Just imagine what you may find elsewhere.