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Akashidnani
CindyRogers
English12
16October2015
A8ResearchPaper
Unemploymentistheoneissueeverybodyagreesneedstobeaddressed,and
willbeakeyissueinthisyearspresidentialelections.Weallknowthatitaffectsthe
poorespecially,sincethesepeoplearetheoneswhoneedjobsthemost.Butthe
surprisingandconcerningtruthisthatunemploymentisaffectingthemiddleclassatan
alarmingrate.Skilledworkerswithyearsofprofessionalexperiencearebeingputoutof
work,andinmanycasesareforcedtoworkunskilledjobsjusttomakeendsmeet.The
alarmingrateofunemployment,andespeciallylongtermunemployment,isoneofthis
countrysgreatestissues,andneedstoberesolvedimmediately.
Thereisplentyofslackinthemarket,meaningthatpeopleeitherdonothave
workorthattheyarenotworkingasmanyhoursastheywouldlike.Thisistypicalina
recession,suchastherecentrecessionthatwearestillrecoveringfrom.Eventhoughit
iscommonknowledgethatthisisanissue,theBureauofLaborStatisticsorBLS
reportedarateofonly5.1percentinSeptember2015.Thisissignificantlylowerthan
thepeakrateinOctober2009,whichfollowedthe2008recession(BLS).Butthereare


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severalexplanationsforwhytheissueisfargreaterthantherateimplies.

Unemploymentratechart

Oneexplanationisthattherateonlyincludespeoplethathavesearchedforwork
recently.Itfailstoincludesthehordesofpeoplethatwouldlikework,butarepessimistic
abouttheirjobprospectsandsohavenotsearchedforworkrecently.Duringthe2008
recession,forexample,itwasfoundthataboutonethirdofunemployedworkersgave
upandstoppedtheirjobsearches(Atlantic).Giventhattherateonlyaccountsforthose
whohavesearchedforworkwithinthelastfourweeks,asignificantnumberofpeople
whowantworkarenotincludedinthestatistic.Thesepeopleareconsideredmarginally
attachedtotheworkforcebytheBureauofLaborStatistics.Inaddition,the
unemploymentratealsodoesnotincludethosewhoworkparttimejobsbecausethey
cannotfindfulltimework.


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TheBLSstatesthatapersonisconsideredemployediftheyworkedduringthe
weektheywereinterviewed,oriftheyhavesteadyworkanddidnotworkduringthe
interviewweekbecauseofanumberofreasonssuchasvacationtimeorpersonal
obligations.Theyareconsideredunemployediftheydonothavesteadywork,are
currentlyavailabletoworkandhaveactivelysearchedforajobwithinthelast4weeks.
Finally,iftheyareoutofworkbuthavenotsearchedrecently,oraretiedupwithother
obligations,theyareconsideredtobeoutofthelaborforce.
Bythesedefinitions,ifapersoncanonlyfindajobthatsuppliesafewhoursper
week,theyarecountedasemployed.Eveniftheyarecontinuingtosearchforbetter
workandarelivinginpoverty,theyarenotconsideredintheunemploymentrate.Andif
theyhavebeensearchedformonthsandhavegivenuponfindingajob,theyare
consideredtobeoutofthelaborforce.Thismeansthatthelowunemploymentrateis
extremelymisleading,andthattheissuesofunemploymentarefarfromsolved.
Theseissuesaremadeworsebythefactthatthelongtermunemployedarefar
lesslikelytofindworkthantheshorttermunemployed.Inotherwords,thelonger
someoneisunemployed,themoredifficultitisforthemtofindwork.Severalreports
backthisupOutoftheroughly9millionjobless,nearly3millionhavebeenoutofwork
for27weeksorlonger(BLS).
Employerstendtodiscriminateagainstworkerswhohavehadextendedperiods
ofunemployment.Infact,accordingtoastudydonebyRandGhayadatNortheastern
University,manywouldratherhiresomeonewithnorelevantworkexperiencethan
someonewhoisinalongperiodofunemployment.Ghayadsent4,800dummyresumes


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infor600jobopeningsscatteredacrossthecounty.Hefoundthattheresumesthat
containedrelevantexperiencewithshortperiodofunemploymenthadthebestcallback
rateatabout16percent.Resumesthatshowedashortperiodofunemploymentandno
relevantexperiencehadacallbackrateofabout9percent.Finally,resumesthat
showedgoodexperienceandalongperiodofunemploymenthadacallbackrateof
about3percent.Itsclearthatthelongtermunemployedhaveafarmoredifficulttask
aheadofthemwhilesearchingforwork.
Thisisespeciallytroublingconsideringthatstateshavebeencutting
unemploymentbenefitsbecauseoftightbudgets.Sevenstateshavereducedthetime
frameforbenefitsto20weeksorlower,while26weeksusedtobethestandard
(Semuels).Thishasmadeitextremelydifficultfortheunemployedtosurvive,and
makesmanyofthemlosehopeandmotivation.
Unemploymenthasaffectedyoungerworkersespecially.Astudydoneonthe
metropolitanareasofLouisville,KentuckyandChicago,Illinoisfoundthatin2013,the
unemploymentratefor1824yearoldworkerswasat16.5%(Brookings).Thisis
significantlyhigherthanthe9.4%and6.5%ratesforworkersage2529andage30or
olderrespectively(Brookings).Andliketheotherunemploymentrates,theseratesdo
nottakeintoaccountunderemployedworkersorthosewhohavegivenuponajob
search.Combinethiswiththefactthatunemployedpeoplearelesslikelytofindwork,


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andyouhaveaviciouscyclethatcanlastforyears.


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Theslackcurrentlyinthelabormarketisanissuethatneedstobeaddressed
immediately.Whileacertainamountofslackistypicalfollowingarecession,thelevelit
isatcurrentlyisfarbeyondacceptablestandards.Andwhiletheunemploymentrate
seemstobeatagoodlevel,thetruthisthatthisisanextremelymisleadingstatistic.
Peoplewhohaveworkedatallintheweeksfollowingthesurveyarecountedas
employed.Sosomeonewhohasdonenothingmorethanafewoddjobsandaccounted
forafewhoursofworkperweekiscountedasemployed.Moreover,workerswhohave
givenuponajobsearcharedisregardedinthecalculationentirely.Andthesepeople
arethemostlikelytofallintoacycleoflongtermunemployment.AsRandGhayad
showedinhisstudy,peoplewhohavebeenunemployedforalongperiodoftimeare
lesslikelytofindnewwork.Infact,candidateswhohaverelevantexperiencebuthave
beenunemployedforalongtimewereonlyathirdaslikelytogetacallbackthan
candidateswhohadnorelevantexperienceandashortperiodofunemployment.These
findingsareespeciallytroublingconsideringthegradualdecreaseofavailable
unemploymentbenefits.Whereas26weeksofbenefitsusedtobestandard,anumber
ofstateshavedroppedittobelow20weekstocompensateforbudgetcuts(Semuels).
Allofthisleadstopotentialworkerslosingmotivation,whichmakesthemevenless
likelytofindnewwork.Tomakemattersworse,unemploymentaffectsyoungerworkers
atadisproportionaterate.Whenyoungworkersfacelongperiodsofunemployment,
theycanenteracyclethatcanlastanywherefromyears,todecades.


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