The Unemployment Rate

In October of this year I decided to write an Opinion paper, for an assignment,  about my view on the unemployment rate. I have believed for over ten years that the government and the media has propounded their idea that the unemployment rate is higher than I believe that it really is.

The next assignment I had was to write an annotated bibliography looking for material to support my opinion. What I found was a wide range of articles from government statistics to the reports of economists, to blogs on the topic. The majority of the research I found showed how the unemployment rate is decided and what statistics are taken into account.

The government survey is performed monthly and looks at tens of thousands of households to find out their job situation, whether any are unemployed and for how long. A similar survey is done with even more companies and “government agencies who employ American citizens”. This appears to be a great picture of how well the economy is doing as it’s related to jobs, employment and whether any that are unemployed are discouraged enough to quit looking.(ycharts)

One of the sources showed that once in the past when the unemployment rate fell to zero percent it caused inflation to skyrocket, therefore economists and others prefer that the rate doesn’t drop below 4-5% (Summers). Another source showed the opposite, that inflation is one of the many factors that causes unemployment to climb. This is because as inflation increases, employers have to decide how high they are willing to raise wages. Do they want to cut employees so they can afford to raise the wages of the rest, or do they want to leave the wages as they are and hope their employees will stay. (Duerr).

Many employees leave their employment voluntarily because they are looking for higher wages. It would be better for them to continue working where they are while looking for something better. This is something many don’t learn until it’s too late. Some may even decide they need to take some college courses to be able to get the wages they prefer or need to sustain their families. Whether a person is looking for higher wages, a job they might enjoy more, or planning on some college courses, it’s always better if possible to continue to work where they are rather than having the possibility of gaping holes in their employment history.

The President is trying to pass a law that will ban employers from not choosing a prospective employee based on their work history, or lack thereof. It is the concern of the authors of The Economist that if that law is passed then certain employers may chose to limit their hiring for fear of reprisals.

One of the sources discussed how individuals furthering their education will probably affect future unemployment rates. As employees have better skills by way of college degrees it could force prospective employers to have to raise their wages to hire the more qualified people.(DePrince and Morris)

The Wall Street Journal has shown that it is believed that the American economy will take another twelve years, if that, before the unemployment rate is back towards 5%. (qtd. in Finfact of Ireland)

A phrase that has been coined in the past several years by the younger generation is ‘funemployment’. This is when those that have been laid off choose to continue as a non-worker for an undetermined amount of time as their funds last. Some of them head to the beaches while other might do things they haven’t been able to do for a while for lack of time. (Yekits)

Personally, I don’t believe wages will ever catch up to the cost of living. The cost of living will continue to go up and one of the factors that affects it more than anything else is the price of gas. Unfortunately in the rare times when gas prices do drop, the majority of companies do not follow suit by dropping their prices on their products, although some might offer more sales than would otherwise be possible.

In summary once I learned what factors are taken into consideration in determining the unemployment rate, I have to say my opinion is incorrect. In fact certain business people that I have talked to in the area believe the statistics provided by the government and media are even lower than stipulated. Only those who are actively looking for employment or those who have been unemployed for only a short time are considered in the reports.

Therefore I will have to adjust my opinion. I know there are plenty of jobs available, although I also know that many of those eligible to work may not want those jobs. I’m talking about restaurants, fast food eateries, gas stations, and retail stores. Even those offering benefits are shunned by some.


Works Cited

DePrince, Albert E., Morris, Pamela D. The Effects of Education on the Natural Rate of Unemployment. Springer Boston, Pub. Business Economics. Web. 2008

Duerr, Michael G.  Unemployment, Causes and Cures.  New York: The Conference Board, Inc.  May 1978. Print.

The Economist”. The long term unemployed. The Ravages of Time. An intractable problem is getting worse. Web. October 1, 2011.

Finfacts Team. “It Could Take Until 2024 for U.S. Unemployment Rate to Fall to 5%.” News: US Economy. 25 July 2011.

Summers, Lawrence H.  The Concise Encyclopedia of Economics. “Unemployment.” Web. 2008.

YCharts. “Unemployment Situation Report Definition” and “Unemployment Rate.” A Stocks and Bonds Website. 4 December 2011

Yekits, Funemploymentblog. Blogger. Web. 27 July 2009.


I owe my training on html formatting for utilizing hanging indents for these citations to this site:

5 Comments (+add yours?)

  1. Tracy M
    Dec 05, 2011 @ 15:00:07

    I would have to agree that there are many jobs out there available, but they are not the jobs that people want. I don’t understand the mentality that someone would rather not work and be broke, than work at a fast food place. Apparently they don’t need money that bad.


  2. Roz Weedman
    Dec 11, 2011 @ 19:08:53

    Maybe parents contribute to this issue. I have a relative (and I’m not going to be more specific than that) who has two adult children still living with them. By “adult children,” I mean one who is 40 and one well into the 30’s. Apparently, these “children” of theirs don’t want those jobs that bad. So they essentially live off their parents (who also have very little money) — free housing, free food, free utilities, free free free. Maybe they (the parents) could tell them you’ve got, say, six months here to figure it out or at least pay a realistic — not token — share of the bills. Even if the jobs available aren’t their idea of career jobs. Who cares? Work isn’t a luxury — thus it’s called “work.”


  3. marsha4852
    Dec 12, 2011 @ 16:54:55

    Yes, I have a friend that has a similar situation, although her children are much younger. Once it’s allowed, though, it’s harder to boot them out. One has a job working many times only 12 hours per week. Certain times she works more hours but not always. She is quite satisfied to continue there at whatever hours she gets. I think that is related to a self-confidence issue, as the person is quite shy and may have hard time checking out other jobs to try to get something better.

    Another factor might be that friends have suggested they not work a certain place for silly reasons. For my retail job, we’re scheduled normally five hour shifts, but if it’s busy, we can expect to work up to eight. Most employees there schedule parties after the five hours and then get upset when they don’t get out on time.

    A young man that worked there years ago, didn’t like that practice, so he suggested to my friend’s children that they never apply there even though it’s a job with benefits, vacations, and medical. Because of what he told them, none of her children has ever applied there to work. Unfortunately, now things have changed, vacations, medical and other benefits are different for those beginning now than what they were when I started.


  4. blangstaff
    Dec 13, 2011 @ 19:45:37

    Very great posting it makes people consider different aspects of unemployment. One issue that I really have a strong opinion about is “funemployment” as you refer to it. I believe that this is a root cause for why the nations finances are out of control. I do agree that there are some individuals that attempt to find employment while receiving unemployment and this is completely fine. It is the others that just take unemployment and do not seek other employment. I just feel that it promotes a very non ambitious attitude and does not support hard working values. A step in the right direction may be stipulations that while on unemployment you must be submitting applications to other jobs or receiving education for something. Like I said theres are situations where individuals rally need unemployment, but I have seen many people in their early twenties that receive unemployment and are content with living off of the system.


  5. marsha4852
    Dec 14, 2011 @ 16:22:38

    Thanks, you brought up some other concepts I didn’t put in my post, but as a business owner know only too well.

    Even if those on unemployment would need to bring in or have some way to show that they applied for jobs, I think that would need to be worked through to make it work correctly. I remember twenty years ago when those on food stamps had to apply for jobs to remain on food stamps. All it took was for them to put in applications at various places and then get signatures on their papers. They didn’t need to really expect to work Maybe some wanted to, but I think for many it was a way to go through the motions to placate the system.

    What many don’t realize is that if they stay unemployed until their benefits run out, then what happens at a later date if they lose their employment for a different reason like a medical situation, caring for a member of their family or something most don’t think about?

    If people would look for the next job as soon as the first is over, for whatever reason, the benefits from all their previous jobs stay in reserve for their use whenever the need might arise.

    When we’ve had past employees file for unemployment, the state sends us a form. It’s rare that we’re the only employer listed as a past employer on the form. In fact the state shows where all they worked and how the benefits will be split up between employers. How it’s split up is determined by how long they worked at each location and whether they already used any of those benefits previously.

    i’m in my fifties and in all my years of working, (I was home with my daughters for two years, and in school-a work/study program but no income-for two years) I’ve never filed for unemployment. For one thing, you have to wait before it kicks in, and usually by then I already have a different job.


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