http://www.economist.com/world/unitedstates/displayStory.cfm?story_id=15271079
This article focused on the issue of long-term unemployment in America. The author points out the fact that Only about 400,000 more Americans were employed in December 2009 than in December 1999, while the population grew by nearly 30m. Then the author discusses whether the long-term unemployment would hinder the economy from recovering from the recession. The author claims that if those workers who have stopped looking for jobs were counted, the unemployment rate would be much higher, but the structural unemployment problem may be not quite serious for the society. The conclusion is that the intense competition would allow companies to hire slowly and pay less to well-qualified workers. The unemployment would also make household indebtedness linger as a problem. Joblessness is a trap the American labour force may not soon escape.
I don't really understand your conclusion intense competition but you really made another point by saying the unemployment situation is much worse if we count people leaving labor force. A lot of people are leaving the labor force. With this leaving, normally the unemployment rate should decrease but it is unchanged because job loser is also increase (unemployment increase).
ReplyDeleteAnother point I am concern is that is population growth worth to be mentioned here? because what we really care is labor force and employment. Newborns are not counted for labor force or unemployment. I think they also do not cause much negative effect on the current unemployment situation (but it may cause future problem ^^).Besides, you may think 400,000 is a small increase in employment last decade and it is bad but if this increase is consistent with an also small increase in labor force, then I expect we are good with an unchanged unemployment rate of 4-5%.
Last but not least, could you explain a bit about the graph above? What is long-term unemployment rate? Is the long-term unemployment rate at the end of 2009 is 4%? Thanks.
I think the main attention grabber here "Only about 400,000 more Americans were employed in December 2009 than in December 1999, while the population grew by nearly 30m." That is astonishing to think about and how deep this recession has truly effected the unemployment rate.
ReplyDeleteTo T.R.:
My interpretation of the graph consists of the the unemployed who haven't worked in six months are included and according to the graph, that number has been relatively low until now. however, my analysis could be wrong.
After doing some searching on the BLS website, I found that from 1999 to 2009, adult population increased about 28 mil, labor force increased about 15 mil, and employment level increased around 6.4 mil. These numbers give the statement more perspective as the article doesn't mention the age of the increase in population or the number of people who retired, etc.
ReplyDeleteThe graph defines Long-term unemployment as 27 weeks or more, and yes, 2009 is at 4% whereas the highest it has been since 1948 is about 2.6%.
~Cassie
6 million Americans have been out of work for 27 weeks or more. This is the highest rate since the study began back in 1948. Even if these people do get their jobs back or find a new job, they will have to regain the skills that they once had. This is to say that these people had a good amount of skills in the first place. Being out of work for this long can only make it harder to jump back into it and the longer this statistic goes up, the harder it will become.
ReplyDelete