Current Trends in Unemployment - Essay Example

?CURRENT TRENDS IN UNEMPLOYMENT DEFINING THE PROBLEM The rate of unemployment is a measurement of the individuals who are unable to find work but areseeking it. It is not the same as the number of individuals who are out of work due to other extenuating circumstances. Total reasons for lack of employment could include any number of factors, such as a lack of desire to find work due to other economic avenues or support systems. It could also include those who are ineligible for work, due possibly to age or infirmity. Quantitative measures of unemployment statistics must include those who are otherwise fit enough to work, of an appropriate age and status, and are voluntarily seeking employment. But these individuals are not able to find employment at the legal minimum rate of pay due to insufficient economic opportunities within their locality or their skill set. The United States Bureau of Labor Statistics lists individuals as unemployed if they are without a job, have been actively seeking work with in the past four weeks – and are available for employment. In terms of defining when a person qualifies as actively looking for work there are a number of behaviors that identify those presently seeking labor: attempting to contact employment agencies, or an employee or directly for the purpose of seeking job interviews. Other methods include attending career centers at local universities, or simply querying friends and acquaintances with respect to obtaining employment. Other activities that define an active job seeker would include dispersal of physical resumes or online applications when available, or networking with local labor unions and other professional organizations, or actively seeking and answering advertisements relating to employment (U.S. Bureau of Labor Statistics, 2009) the involuntarily unemployed are those who are actively seeking opportunities. There are passive measures of searching for employment that do not qualify the individual as being a person actively seeking work. Simply reading advertisements or taking training courses are career related, but are not active. Before any given a job interview, the active job seeker must have been engaged in one active job search within the four preceding weeks while available for employment. These categories are significant with respect to the government assistance with the intent of correcting involuntary unemployment. Categories and behaviors must be identified, and quantified in order to generate effective measures for supporting or addressing those who are seeking work but unable to find it. Many government surveys are also aware of the complexities of measuring unemployment where subsistence farming exists, and questions to determine employment status attempt to specifically identify those engaging in private, family businesses or farming related activities. The temporal designation of four weeks is necessary, because for planning and funding purposes it is more efficient for government agencies to deal with quantifiable numerical values by which they can assign categories (U.S. Bureau of Labor Statistics, 2009). Failure to get work can be voluntary, but the only objective indicator of economic viability in this field would be involuntary unemployment. This has implications for government and economists alike, because the rate at which involuntary unemployment occurs is indicative of larger trends or weaknesses within society. VARIATIONS OF EMPLOYMENT Yet there are still deviations from employment in the standard labor markets owned by corporatized private sector entities. In some countries, it can be difficult to measure the true rates of unemployment where large-scale subsistence farming occurs, for instance. Individuals outside the model of regular wage employment as common in the industrialized world also create complications for survey analysts. In addition to subsistence farming, there are others who work for occasional wages on an as needed basis temporarily, and some countries may have significant cottage industries that may or may not sell to a corporate entity in terms of both raw materials and finished products at the end of the work cycle. This has been a perennial trend in the developing world (Krishna, 1995). Preindustrial areas of developing countries may exhibit more than three fourths of the female labor force engaged in informal cottage industry (Unni & Rani, 2005). During times of economic stress, another category exists according to some economists who would describe individuals marginally attached to the labor force. These are individuals who have been workers in the past and have the potential to contribute to the economy but are no longer actively looking for work. They might also be described as discouraged workers. These people are available, have worked in the past – and are available for work. But many of them have simply lost confidence. Marginal workers could include it individuals who believe that within their area of expertise no work is presently available that is legal and pays a rate equal to or above the minimum wage. Certain of these workers may have sought employment and then stopped due to a perceived lack of the necessary schooling or training. Others may have faced a real or perceived discrimination due to some ascribed status, or simply as a result of age. These individuals believe that having been unable to find work active searching is not productive unless significant changes occur either in themselves or in the economy as a whole. (U.S. Bureau of Labor Statistics, 2009) national surveys involving millions of people are less effective when large numbers of these workers exist. It is exceedingly difficult to put a mathematical value on intent, or confidence if it is not backed by observable behaviors. In addition, cases of overlapping exist. Such as those who have competing responsibilities, high school students may seek work even if they do not meet the traditional categorical standards of those who are available for employment. And certainly, there are those who are already employed yet actively attending job interviews in search of higher-paying employment. SURVEY TECHNIQUES With respect to involuntary unemployment of those with the intent of working for specific wages in the private sector, there are several measurements and means of calculation by which involuntary unemployment is described. A survey of a given labor force can be conducted in order to determine the relative levels of activity of a given poll respondent over the course of the surveys and duration. Attempts are made to ascertain whether the subject is working, and if the subject is seeking work. Typically, for those who are not working questions attempt to ascertain whether they are available for employment, desired employment, and are making active efforts to find legal work within a certain predetermined time period. The unemployed are classified as those who answer that they are not working, but are available for – and are seeking work. Those not working and not looking should not be calculated, because they have chosen to not participate in the labor force, for whatever reason. This includes those who are under 16 years old in the United States, or individuals assigned to nursing homes, or those presently on active duty in the Army or other branch of the armed forces. Also excluded from unemployment statistics are the incarcerated. Anyone who wants to work could be considered part of the overall labor force. The labor force can be defined as those who are presently working, and those who are involuntarily unemployed but actively seeking work – under the presumption that if a legal opportunity became available they would then become active employees. This is a representation of a countries potential economic output, thus both the employed and the unemployed are included. Not included of course, are those who are not employed and not seeking work – even if an opportunity became available there was no guarantee that they would seek it due to a number of purely personal reasons. But the surveys that identify these categories can be imperfect. Some workers may obtain temporary or seasonal employment. Some may be employed briefly but then fired. Complexities can result if a person is employed for part of the given survey period. There may be doubt concerning their status in that case. It is probable that no single survey or method could produce a consistent picture in all instances, and thus several measurements and survey strategies should be employed to gain the most thorough evaluation possible of involuntary unemployment. Alternative options to a traditional survey that asks whether or not an individual was employed for a given stretch of time could be a survey that asks about work activity over a large stretch of time and then asks further probing questions such as – how many months the individual was employed over a larger span of time? But in the final analysis, unemployment equals those who are able and looking for work but cannot find it due to insufficiencies in the government or private sector. Other measurement strategies for involuntary unemployment would not involve a particular status assigned to a particular individual over the span of the survey, but some might attempt to evaluate the utilization of time on a daily basis, using a reference week. Methods such as this can be used to quantify total working time for individuals in the survey, as well as produce figures describing total 'person days' of involuntary unemployment. By this measure, employment or unemployment can be measured by annual aggregates of weekly data. Thus it is possible to derive figures of total working days as a fraction or percentage of time in a year. A combination of various measures should be utilized to arrive at a consolidated or condensed figure with respect to national involuntary unemployment. FUTURE OUTLOOK Present consensus among analysts paints a relatively gloomy picture: rates of economic growth around the globe can often be described as stagnant at best. Will rates of growth are low, and this appears to be representative of economic forecasts throughout the majority of the industrialized world from the employment dissatisfaction in the United States to the rioting and economic uncertainty in Greece, there is a sense that the current recession will be extended, any talk of recovery will result only in a transitory gains. Uncertainty, throughout many economies will remain high. This uncertainty appears to be as much of an obstacle as any material or financial reality, with economic doubts extending beyond the borders of the industrialized world. Thus, the potential exists for a climate of extended recession to feed off of economic uncertainty to continue a downward slide (International Labor Office, 2012). Contributing factors are high levels of volatility in financial markets, resulting in a synergistic effect with financial austerity measures, such as those implemented in the euro zone. Although modest levels of her coppery have been reported in terms of output, but according to the international labor office (2012) debt problems continue to contribute to a trend of general uncertainty that outweighs improvements relating only to actual physical output. The effects of certain of these austerity measures will be addressed graphically below, including implications of the risks and limitations of present responses to the general climate of uncertainty. (International Labor Office, 2012) The above chart demonstrates a pattern through comparison before and after the current hiring crisis. Clear shortfalls in budget balance can be detected in most areas, including the aggregate of worldwide values. The trend is one of lowered spending, increased savings, and an increasingly negative budget balance throughout much of the world when compared with pre-crisis values. The climate appears to be one of asset retention; with a minimum of profit-seeking/risk taking with regards to spending and investments. This of course, also has negative implications for hiring. But analyses of more recent trends over the two years since 2010 provide some reason for hope: (U.S. Bureau of Labor Statistics, 2012). Over the past two years, with occasional reversals, there is a pattern of slow improvement in unemployment, but change over the month of May is minimal. PROJECTIONS Looking into the future there is some reasons for optimism. A willing labor force is just waiting to be unleashed. The fundamental potential for high productivity does therefore exist. Furthermore, the most recent analysis from the Bureau of Labor Statistics (2012) does show a trend of slow but gradual unemployment decline, although there is a possibility of uncertainty due to reports of active job seekers. If individuals no longer show signs of actively seeking work, one possibility is that they have found employment – but the other, more troubling one is that they have simply given up. Many individuals could be joining the marginal workforce, and will cloud a true analysis of unemployment figures. Yet it is reasonable to believe that a part of the decline in unemployment is likely due to genuine career success. The trend of slow, and is subject to bouts of stagnation but it is possible in financial quarters to come that a crawl back to a sense of normalcy will occur. But even if so, that could still result in many more years of unsatisfactory employment figures, assuming a trend of slow improvement continues. Due to the market uncertainty as described above in this analysis there is little hope for rapid improvement. A dramatic financial recovery does appear possible based upon figures from the international labor office in Geneva (2012) but it would require a dramatic shift of individuals and institutions choosing to accelerate their expenditure, balance national budgets, and devote less money to savings. Yet, if such a spending spree were to occur, it would be inevitable that certain of these institutions and individuals would experience dramatic financial losses, and no one wants to take that risk. In the absence of rapid expenditure of savings to accelerate economic activity worldwide, future economic quarters should bring a painfully slow march back towards slightly lower unemployment figures. Works Cited International Labor Office. Global Employment Trends, 2012. Preventing a Deeper Jobs Crisis. International Labor Office Geneva. Copyright © International Labor Organization: 2012. Print. Krishna, R. Rural Unemployment – A Survey of Concepts and Estimates for India. Centre of Development Studies, Trivandrum, Raj Krishna: Selected Writings, Ed. V. Krishna. Delhi: Oxford University Press: 1995. Print. Unni, J., and U. Rani. “Home Based Work in India: A Disappearing Continuum of Dependence?” In Working Paper No. 160, Gujarat Institute of Development Research, 2005. Print. U.S. Bureau of Labor Statistics. Labor Force Statistics from the Current Population Survey. How the Government Measures Unemployment Division of Labor Force Statistics. n.d. Web. 14 June 2012. U.S. Bureau of Labor Statistics, 2012. The Employment Situation, May 2012. News Release. Bureau of Labor Statistics. U.S. Department of Labor, 2012. Print. Read More