Some of you will, I expect, object that Tabarrock is actually referring to those
employed by receiving money from workfare programs, specifically those, uh, affiliated with the Works Progress Administration (WPA) during the New Deal. Yes he is. But I fail to see why one class of government employees is actually “unemployed” while every other government employee is “employed.”
I suppose one could argue that WPA workers were only temporarily paid for providing goods and services. To my mind, that answer creates fascinating conceptual issues, such as whether someone who loses his or her job becomes retroactively unemployed whilst they were working. But, more to the point, it would seem to place many government contractors into the ranks of the unemployed. My wife, for example, has a one-year non-renewable contractor position. Somehow, though, I think any application she submitted for unemployment insurance would be rejected.
(h/t Henry Farrell)