Economics

Data: Ride 'Em Cowboy

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Americans, they say, know little about the rest the planet. But in Cowboy Capitalism (Cato Institute), the German business journalist Olaf Gersemann observes that many Europeans have some funny ideas about economic conditions in America. Among them: that Americans commonly work three jobs to make ends meet, and that low U.S. unemployment is entirely due to the high proportion of the population that's incarcerated.

The latter isn't a bad guess, given our massive population behind bars. But the numbers–more precisely, the proportion of the working-age population that's actually working–don't bear it out. While employment rates in the U.S., France, and Germany were quite similar as recently as the 1970s, the last three decades have seen a steady divergence. Which is the more compassionate economic system: one that provides an expansive safety net when citizens can't find work, or one that makes it less likely that they'll need it?

Graph (not available online): Employment Ratios in the United States, Germany, France, and Italy (employed persons between 15 and 64 years of age as a percentage of working-age population)