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.

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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.

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I owe my training on html formatting for utilizing hanging indents for these citations to this site:http://www.tnellen.com/school/basic.html#indent

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Frantic Holiday

Looking at my watch for the umpteenth time, I was wondering whether I’d ever get out of work. I was already two hours over my expected five hours of a work day. I had hoped that I would get home on time that day to get homework done for my one credit class. I still had three long chapters to read and I thought I had two papers to write and a quiz, all to be done before Monday evening. Unfortunately, even though I took the syllabus quiz the weekend before, I didn’t fully realize that the majority of the assignments were written therein, and that I could have been reading the information all along. (They weren’t posted on the Content page until several days before they were due.  I began getting stressed out, thinking I would never get it done and even thinking I may need to drop the class. It wasn’t until over the weekend that I discovered I didn’t need to write papers, although I still needed to read three more chapters. I did my best with that, since I worked all weekend, and did fairly well on the quiz.