The State of American Employment - Research Paper Example

Economics Insert Unemployment in the United s Introduction Unemployment rate according to the U.S Bureau of Labour statistics was estimated to be 7.9% in October compared to that of September which was at 7.8%. That is a slight increase of 0.1 % but on analysis it is somehow unchanged because August had recorded an unemployment rate of 8.1%. The number of unwaged civilians declined from 88,710,000 to 88,341,000, this subsequently led to an increase in the number of the employed by a margin of 410,000 to stand at 143,384,000 and the unemployed also to increase by 170,000 and stand at 12,258,000. This shows somehow a stable state of the economy; however, further analysis of the statistics could portray otherwise. Motoko (par 3); Shah & Lee (par 10) say that politicians could term such statistics as weak and troubling because they could assert that despite an increase in employment opportunities, the growth in job market cannot match the increasing number of those seeking jobs hence an increase in the unemployed. These small changes are also described by Barro (par 1) as dismal in terms of economic recovery. The State of American Employment Age and Student Debt The teenagers in the age group of 16 to 19 years recorded an unemployment rate of 23.7% which did not change from the previous month. This was remarkably higher than that of adult males who had an employment rate of 7.3% and 7.2% recorded for adult females. This clearly shows that with an increase in age, there is greater job stability. Adults have job experience as compared to their inexperienced teenagers. There was no change in the unemployment rate among the teenagers between 16 to 19 years of age; this was similar to adult males where the rate stood at 7.3% while the females recorded an increase of 0.2% (US Bureau of Statistics) The youths as consequence of unemployment are finding it hard to sustain themselves. Rampell (par 1) states that in this generation, the future of the young looks bleak. She says only one out of six young people work full time. Most of the young are struggling to put up with their parents; three out of five live with their parents. 73% of young people believe they need more education to find a better career, but only half of this percentage confirms they will enroll in the near future. Among the unemployed youths recent graduates are included. Weisman (par 6) in his article “53% of recent grads are underemployed or Jobless” says that, recent graduates are likely to work as waiters, waitress, bartenders, and food service helpers than as engineers, doctors, physicists, or mathematicians. However, most graduates will not take these jobs because the college degree is very expensive and students accumulate debts during the course of their studies. Re-servicing these loans is much harder when you are working for low salaries. Secondly, when college graduates take up a low-paid or low-skill job, they're probably taking the place of a less educated worker. Krugman (par 11) argues that the debt burden is not the main problem facing the youths but it is, rather, the lack of jobs, which is preventing many graduates from getting started on their working lives. Gender and Employment Stability Analysis based on gender show that women have a slight edge over the males when it comes to job stability. The unemployment rate for women 16 years and over was 7.7% up by 0.2% from the previous month, while the rate for the males in the same age group was recorded as 8.0% and showed no change from the previous month. When the age is raised to 20 and above, the unemployment rate for women is 7.2 up by 0.2% from the previous month, while the men have an unemployment rate of 7.3% which had no change from the previous month. This statistics clearly indicate that the job stability between sexes is almost becoming equal. Both the young Males and females suffer from a high rate of unemployment as expressed by the fact that when the age is increased from 16 to 20 the unemployment goes down by 0.5% for females and 0.7% for males (US Bureau of Central Statistics). Education and Income Gap             Education level plays a vital role in determination of unemployment rate. Civilians with low education level have the highest rate of unemployment. Data indicates that those with less than high school diploma have the highest unemployment rate (12.2%). These are followed by those with high school diploma but have no college diploma at 8.4%, then those with college diploma or associate degree at 6.9%, while those with bachelors’ degree or higher have the lowest rate at 3.8% (US Bureau of Central Statistics). Education is a major determinant of the income disparities in the United States.  Rampell (par 9) states that although there has been national argument about whether college is worth the debt burden it entails, most high school graduates with no college degrees believed they would be unable to get good jobs without further education. The income gap is brought about by the fact that American economy has higher demand for educated workers. As the country becomes more educated the qualifications for jobs are raised leaving more and more of those with low academic qualifications jobless. Improvement in technology can also be singled out for the rising demand of educated workers in America. Given the high debt burden that goes with college degrees, the percentage of people with degrees is lower than those without degrees and this brings about the income gap as a small percentage of the work force get high incomes while a large proportion go home with low wages. The people with degrees also enjoy more job security than those without the degrees. The data hints that this gap is not closing soon because there was a reduction in the unemployment rate among those with bachelors’ degree or higher qualifications by 0.3% and high school graduates with no college diploma also reduced by 0.3%. On the other hand, those with college or associate degree increased by 0.4% while those with less than high school diploma qualifications had the highest increase at 0.9% (US Bureau of Labor Statistics). This indicates that attainment of high school diploma is a necessity for absorption in the job market of the United States. More and more workers with less than high school diploma are being blocked from engaging into gainful employment while on the other hand due to globalization and advancement in technology there is an increase in absorption for those with bachelors degree or higher. The statistics also showed an increase in the unemployment rate for those with college diploma or associate degree, this can be pinned on the fact that as more and more people with bachelors’ degree or higher enter the job market they displace those with lower qualifications. Race and Poverty The unemployment statistics according to race indicated that the Asians have the lowest unemployment rate of 4.9% (not seasonally adjusted) followed by whites with 7.0 %, Hispanic or Latino ethnicity at 9.7% (not seasonally adjusted) while blacks have the highest rate at 14.3%. This data compared with the previous period shows that there was an increase in unemployment rate across all races except the whites. That for (African American) Black increased by 0.9%, Hispanic or Latino race recorded an increase of 0.3% (from the previous year), Asian race had an increase of 0.1% (from the previous year) and the whites recorded no increase (US Bureau of Labor Statistics). According to Baker and Hassett (par 1) in their article “The Human Disaster of Unemployment” the American economy is going through long term crisis in terms of unemployment. Stiglitz (par 3) asserts that assuming a job creation rate of 225,000 per month, it would take 150 months for America to reach its full employment, which is around some time in 2025. This is despite the projection that it could return to full employment by 2018. Baker and Hassett (par 2) say that the long term unemployment is experienced mostly by the young, the old, the African American, and Latino workers. The statistics show that about 46.2 million Americans live below the poverty line; the blacks experience the highest poverty rate followed by the Latino Ethnicity. This can be attributed to the fact that there is a high unemployment rate among these ethnic groups. Lack of employment means low income, which consequently reduces the purchasing power of individuals leading to poverty. Blacks could be experiencing poverty due to the vicious cycle associated with poverty. They lack the money to educate their children so that they can be engaged into better jobs hence their children land in low paying or are not employed at all. This cycle is transferred to the next generation. Discouraged, Marginally Attached, and Part Time Workers According to U.S Bureau of Labor Statistics, the number of part time workers for economic reasons went down by 269,000 to stand at 8.3 million in October to some extent making up for an increase of 582,000 in the previous month. This group engages in involuntary part time due to their hours being reduced at job or they are unable to get fulltime jobs. October recorded 2.4 million workers who were marginally attached to labor force, slightly different from the previous year. Marginally attached are the people who are not in the labor market but can work if an opportunity arises. They are also said to have searched for work in the past 12 months. Among the marginally attached, discouraged workers were 813,000, which was a reduction of 154,000 from the previous year. Discouraged workers are defined as people not looking for a job because they believe there are no jobs for them (Harding par 7). The decline in the number of discouraged workers means there is an increase in confidence in the government’s creation of new job opportunities. Conclusion From the BLS statistics the American economy is headed for stability after the effects of recession. However, there is need to address the issue of high unemployment rate among the youths and the race disparities in terms of unemployment. The government should also invest more money in education to enable the youths acquire the necessary skills for employment. Entrepreneurial opportunities should be increased by providing more finances and reducing formation hurdles to small businesses. This will create more employment opportunities in the private sector and reduce the government’s burden of creating more jobs in the state owned enterprises. Works Cited Baker, Dean and Hassett, Kevin. “The Human Disaster of Unemployment.” The New York Times, 5/12/2012 Barro, Robert. “Why This Slow Recovery Is Like No Recovery.” The Wall Street Journal, 6/5/2012 Harding, Robin. “A Workforce on the Wane.” Financial Times, 4/18/2012 Motoko, Rich. “After a winter of Strong Gains, Job Growth Ebbs.” The New York Times, 4/7/2012 Krugman, Paul. “Easy Useless Economics”. The New York Times, 5/11/2012 Rampell, Catherine. “More Young Americans out of High School Are also out of Work.” The New York Times, 6/6/2012 Shah, Neil and Lee, Carol. “U.S. Labor Market Slows Its Stride.” The Wall Street Journal, 4/7/2012 Stiglitz, Joseph. “The US Labor Market Is Still A Shambles.” Financial Times, 3/12/12 U.S Bureau of Labor Statistics. “Employment Situation Summary.” U.S Bureau of Labor Statistics, 11/2/2012 Weisman, Jordan. “53% of Recent College Grads Are Jobless or Underemployed - How?” The Atlantic, 4/25/2012 Read More