US Unemployment Rises

Note: New data released on December 3 show the unemployment rate rose to 9.8% in November

People did not know it at the time, but three years ago this month, in December of 2007, the country entered what was to become the most severe recession since the Great Depression. Three years ago, the unemployment rate was just 5%, but the economy had already been weakened by earlier policy choices.

In fact, that fledgling downturn turned out to be far longer and deeper than anyone expected, even a year later. In late 2008 as President-elect Obama and his team were putting together an economic stimulus plan, most economists were projecting an unemployment rate of 6.9% in the first quarter of 2009. In fact, unemployment reached 8.1% by that point, and although the American Recovery and Reinvestment Act succeeded in creating millions of jobs, it was just not large enough to fill such a large hole. A recent report by Princeton Economist Alan Blinder and chief economist at Moody’s Analytics Mark Zandi, found that if the federal government had not intervened to rescue the economy, then the unemployment rate would be close to 16% today.

Today, even though the National Bureau of Economic Research says the recession has been officially over for 18 months, economic distress and joblessness remain widespread. The official unemployment rate stands at 9.6%, 14.8 million Americans are unemployed, and the jobs crisis remains so severe that there are five unemployed workers competing for every single job opening.

“What is infuriating is that this recession was unnecessary -- it was caused by deregulation and indifference to speculation,” said EPI President Lawrence Mishel. “Plus its depth and duration have been deepened by political forces resisting efforts to generate the millions more jobs we have needed. Unfortunately, there’s much more pain ahead in the pipeline”

How much longer will it take to return to a pre-recession job market?

Some figures point to an answer: As the Chart shows, unemployment is almost double the December 2007 level of 5%, and underemployment has risen from 8.7% to 17% over that same period. Labor force participation has fallen from 66% to 64.5% overall, and has dropped more sharply among some age groups, suggesting that large numbers of discouraged jobs seekers have left the labor force. Minority workers and blue-collar workers continue to experience rates of unemployment far above the nationwide level. In October, unemployment was 15.7% for black workers, 12.6% for Hispanic workers, and 14.1% for blue-collar workers.

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Unemployment

Unemployment, as defined by the International Labor Organization, occurs when people are without jobs and they have actively looked for work within the past four weeks. The unemployment rate is a measure of the prevalence of unemployment and it is calculated as a percentage by dividing the number of unemployed individuals by all individuals currently in the labor force.

There remains considerable theoretical debate regarding the causes, consequences and solutions for unemployment. Classical, neoclassical and the Austrian School of economics focus on market mechanisms and rely on the invisible hand of the market to resolve unemployment. These theories argue against interventions imposed on the labor market from the outside, such as unionization, minimum wage laws, taxes, and other regulations that they claim discourage the hiring of workers. Keynesian economics emphasizes the cyclical nature of unemployment and potential interventions to reduce unemployment during recessions. These arguments focus on recurrent supply shocks that suddenly reduce aggregate demand for goods and services and thus reduce demand for workers. Keynesian models recommend government interventions designed to increase demand for workers; these can include financial stimuli, job creation, and expansionist monetary policies. Marxism focuses on the relations between the controlling owners and the subordinated proletariat whom the owners pit against one another in a constant struggle for jobs and higher wages. This struggle and the unemployment it produces benefit the system by reducing wage costs for the owners. For Marxists the causes of and solutions to unemployment require abolishing capitalism and shifting to socialism or communism.

Unemployment in the US is currently at 9.3 percent; however, one must consider that in certain areas of our great USA, those figures can be doubled, which takes on an even greater impact on people, particularly on the East and West coast, where populations are higher and more dense.

Unemployment has obvious and well-documented links to economic disadvantage and has also been connected in some discussion to higher crime rates (Cantor and Land 1985; Ottosen and Thompson 1996), especially among the young (Britt 1994), suicide, and homicide (Yang and Lester 1994; Ottosen and Thompson 1996). Garry Ottosen and Douglas Thompson (1996) broaden the consequences of unemployment, relating it to increases in the incidences of alcoholism, child abuse, family breakdown, psychiatric hospitalization, and a variety of physical complaints and illnesses. Some researchers have emphasized the importance of preventing youth from falling into unemployment traps. Robert Gitter and Markus Scheuer (1997) suggest that unemployment among youth not only causes current hardship, but may also hinder future economic success. This is because unemployed youths are not able to gain experience and on-the-job training and because a history of joblessness signals that the individual may not have the qualities that are valued in the labor market.

Unemployment may impair the functioning of families (see, for example, Liker and Elder 1983; Barling 1990) by affecting the parents' interactions with their children and the interactions between partners. Although it has been shown that unemployed parents spend more time with their children, the quality of these interactions suffers in comparison with those of employed parents. Unemployment, particularly among male partners, is also likely to lead to major role changes in the home.

Obviously, rampant unemployment ravages lives and families. Often times, when one becomes unemployed, seeking the easy solutions such as turning to alcohol and drugs to ease the pain and suffering becomes another offshoot problem of unemployment as well.

Its one thing to write and discuss about unemployment, but its quite another to seek viable options in today's dwindling economic crisis. People need options and solutions. They do NOT need to be led down yet another primrose path. A man or woman who is unemployed, and really cannot see a way out, even though they may not see it at this time, does have great options that are readily available to anyone seeking real jobs.

The Internet

The Internet is a global system of interconnected computer networks that use the standard Internet Protocol Suite (TCP/IP) to serve billions of users worldwide. It is a network of networks that consists of millions of private, public, academic, business, and government networks, of local to global scope, that are linked by a broad array of electronic and optical networking technologies. The Internet carries a vast range of information resources and services, such as the inter-linked hypertext documents of the World Wide Web (WWW) and the infrastructure to support electronic mail.

Most traditional communications media including telephone, music, film, and television are being reshaped or redefined by the Internet. Newspaper, book and other print publishing are having to adapt to Web sites and blogging. The Internet has enabled or accelerated new forms of human interactions through instant messaging, Internet forums, and social networking. Online shopping has boomed both for major retail outlets and small artisans and traders. Business-to-business and financial services on the Internet affect supply chains across entire industries.

The origins of the Internet reach back to the 1960s with both private and United States military research into robust, fault-tolerant, and distributed computer networks. The funding of a new U.S. backbone by the National Science Foundation, as well as private funding for other commercial backbones, led to worldwide participation in the development of new networking technologies, and the merger of many networks. The commercialization of what was by then an international network in the mid 1990s resulted in its popularization and incorporation into virtually every aspect of modern human life. As of 2009, an estimated quarter of Earth's population used the services of the Internet.

The Internet has no centralized governance in either technological implementation or policies for access and usage; each constituent network sets its own standards. Only the overreaching definitions of the two principal name spaces in the Internet, the Internet Protocol address space and the Domain Name System, are directed by a maintainer organization, the Internet Corporation for Assigned Names and Numbers (ICANN). The technical underpinning and standardization of the core protocols (IPv4 and IPv6) is an activity of the Internet Engineering Task Force (IETF), a non-profit organization of loosely affiliated international participants that anyone may associate with by contributing technical expertise.

The Internet holds more promise for people seeking solutions to their unemployment woes, than literally any job could ever provide to them. Even though most do not believe in this as a reality, I can say that after being involved in Internet businesses for the past seven years, I am now seeing that it is entirely possible for anyone with drive, ambition and a never quit attitude, can succeed. The question is this. How bad do you want it?

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The Wildcat