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Nations where everyone has a job

Heinz-Peter Bader / Reuters

Kaesekrainer sausages during production at the Wiesbauer factory in Vienna. Austria currently has the lowest unemployment rate among all EU countries.

Earlier this month, polling agency Gallup released its 2011 global unemployment statistics for 148 countries. Of the nations Gallup surveyed, nine had unemployment rates below 5 percent. The majority are in Asia, with the remainder in central or eastern Europe. 24/7 Wall St. reviewed these nine countries to determine the underlying causes of their extremely low jobless rates.

We looked at these countries in light of the fact that some economists believe that unemployment of 5 percent or less is considered "full employment." The argument is that less than 5 percent unemployment is impossible once normal turnover, job deferment and retirement are taken into account. In fact, the agency’s findings highlight the problem with comparing unemployment levels across nations; similar unemployment rates in different countries do not necessarily mean conditions are the same.

After analyzing the data, 24/7 Wall St. concluded that only a minority of the countries with low unemployment actually have a healthy economy where middle-class jobs are abundant. Instead, in many nations, employment is either being created by temporary government public works or these nations have large amounts of subsistence farming, which is counted as employment.

Interestingly, low unemployment is not necessarily driven by large economies, the Gallup data show. Three of the nine countries with the lowest unemployment fall within the bottom half of countries with the lowest gross domestic product per capita out of 226 countries outlined by the CIA's World Factbook. A few other countries, including Thailand and Montenegro, have similarly low GDP per capita, although not quite in the bottom half. This illustrates that low-earning countries also can have low rates of unemployment.

Because of the difficulties in comparing unemployment rates, the Gallup study also reported the percentage of the population employed full-time by an employer -- a measure believed to more accurately reflect the employment situation of each country. In an interview with 24/7 Wall St., Dennis J. Jacobe, Gallup’s chief economist, explained that this method helps take into account those who are working on their own and making just enough to get by. “We’ve decided to focus on employed full-time for an employer,” Jacobe said. “Our conclusion out of all of this has been that it is difficult to make an across-country comparison because the rules are so different, and what is defined as a job is different in each country.”

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Matthias Rumpf, Organisation for Economic Co-operation and Development’s chief media officer, echoed Jacobe’s sentiments. Rumpt told 24/7 Wall St. that using unemployment rates to compare developed and developing countries was problematic for these very reasons.

Many of the countries we examined, especially those in Asia, have unemployment rates less than 5 percent, but also have a relatively low percentage of their population working full-time for an employer. This includes countries with a great deal of subsistence farming. China, Thailand and Vietnam fall into this category. In China, between 30 percent and 39 percent of the population is working full-time. In Vietnam and Thailand, the range is between 20 percent and 29 percent. In contrast, most of the countries with the lowest unemployment rates have 50 percent or more of their population working full-time for an employer other than themselves.

There are also quite a few countries on this list that may have healthy economies in part, but their exceedingly low unemployment rates appear to be more a product of a government artificially suppressing rates through public programs. In Belarus, for example, everyone who registers for unemployment benefits must sign up for some public works project.

24/7 Wall St. reviewed the nine countries with unemployment rates less than 5 percent in 2011, according to the Gallup survey. For each of these countries, we added the Gallup figures for the percentages of the population that were employed full-time by an employer. We collected GDP and GDP per capita data from the CIA's World Factbook. We also looked at long-term unemployment and GDP trends by country, provided by the World Bank.

These are the nine countries where unemployment does not exist.

1. Austria

  • Unemployment: less than 5 percent
  • GDP: $351.4 billion (35th highest, out of 225)
  • GDP per capita (PPP): $41,700 (18th highest, out of 226)
  • Percent working full-time for an employer: 50-plus percent

According to the World Bank, Austria’s unemployment rate has remained below 5 percent -- excepting a minor hiccup of 5.2 percent in 2006 -- since the organization began recording the statistic in 1982. Austria has a highly advanced market economy, which thrives on its large service and industrial sectors. It has maintained low unemployment in recent years, including throughout the recession. This is due largely to the government subsidizing the reduction of work hours for companies. According to the Austrian Times, the country currently has the lowest unemployment rate among all EU countries.

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2. Belarus

  • Unemployment: less than 5 percent
  • GDP: $141.2 billion (60th highest, out of 225)
  • GDP per capita (PPP): $14,900 (85th highest, out of 226)
  • Percent working full-time for an employer: 50-plus percent

Since the mid-2000s, former Russian satellite nation Belarus has had an above-average GDP growth nearly every year. In 2010, Belarus had the one of the highest rates of industrial growth (a separate measure than GDP growth) in the world, at 10.5 percent. This may have had some impact on the country’s extremely low unemployment rates, but there are other factors at work. According to the Belarus Digest, these low unemployment numbers are not all they appear to be. As part of public policy, those who register to receive unemployment benefits must register for a public works program. These positions are usually only part-time, and the pay is low. According to the CIA, there is a “large number of underemployed workers” in the country. Still, at least 50 percent of residents are working full-time for an employer.

3. China

  • Unemployment: less than 5 percent
  • GDP: $11.3 trillion (2nd highest, out of 225)
  • GDP per capita (PPP): $8,400 (119th highest, out of 226)
  • Percent working full-time for an employer: 30 percent to 39 percent

Although China’s unemployment rate is reportedly below 5 percent, only 30 percent to 39 percent of the labor force are working full-time for an employer -- a relatively small amount. This is likely the result of the country’s high rate of subsistence jobs. The country also has a large number of jobs in the public sector. Additionally, it is the world’s largest exporter. China enacted its 12th Five-Year Plan in March 2011, which “emphasizes continued economic reforms and the need to increase domestic consumption in order to make the economy less dependent on exports in the future,” according to the World Factbook.

Click here to read about other countries where everyone has a job.