http://www.nytimes.com/2013/02/02/business/economy/us-adds-157000-jobs-unemployment-rate-edges-up-to-7-9.html?pagewanted=2&_r=0
Unemployment at 7.9% is very high for our economy. As we
talked about in class unemployment can be caused be a number of things. As well
as different types of unemployment. Cyclical unemployment is when people lose
their jobs due to insufficient aggregate demand. Structural unemployment is
when people do not have the required skills to obtain or keep a job. Frictional
unemployment occurs when workers lose their current job and are in the process
of finding another one. Also when student are currently looking for a job after
graduating. The natural rate of unemployment is defined as the rate of
unemployment that still exists when the labor market it in equilibrium.
The article talks about fiscal policy hurting our economy,
when it’s supposed to be helping it. The government budget cuts and tax rate uncertainty
is problem a big still but the job growth increase at the end of 2012 was a lot
higher then estimated. Employers added 157,000 payroll positions. With all
these new jobs the unemployment rate is still at a high 7.9 percent.
However the increase in jobs is a great for everyone especially
Wall Street. “The economy, sales,
employment and the stock market are all higher in spite of the bickering and
rancor in Washington,” said Bernard Baumohl, the chief global economist at the
Economic Outlook Group.
People are dropping out of the labor market or not even entering
it. Millions of people have used up all their unemployment benefits, and are
now helpless. With families to take care of it’s very hard to be unemployed in
this economy.
Job growth is still slow compared to previous recession
recoveries, and the unemployment rate stuck just below 8 percent lets us know
that it takes time for unemployment to go back to its natural rate. The fiscal
policy are useful in the long run, but not in short run. Those who are you are working
and paying taxes are hurt most by fiscal policy. The problem is fiscal policy
rises taxes, prices and the cost of living goes up.
Still, hiring growth has not been enough to decrease unemployment
rate. There is still 12.3 million workers remaining. The average unemployed worker
has been unemployed for about 35 weeks like the article tells us.
The problem is not who doesn’t have a job but more who wants
one. The unemployment rate depends on the number of workers want to join the
labor force. Right now, labor force participation is only 63.6 percent. The unemployment
rate is calculated with people who are still actively looking for a job but are
unemployed. With slow labor force participation the unemployment rate will not increase,
and stay just where it is.
Rampell, Catherine. "Job Growth Still Steady, But Rate Rises to 7.9%." The New York Times. The New York Times, 02 Feb. 2013. Web. 18 Apr. 2013.
Response to Job Growth Steady, but Unemployment Rises to 7.9%:
ReplyDeleteThis article is very confusing; there are parts of it that I completely agree with and other parts that make no sense. I understand that those actively looking for a job are calculated as the unemployment rate, but the major problem is that Americans are lazy, very lazy. Anyone who is currently working and paying taxes is basically paying the bills for the “checkers” or those just sitting back collecting unemployment and other government aid. If they were getting fiscal benefits and not having to work, why would they look for a job? That is the number one problem with such people not being considered in the unemployment rate. If they are not employed, then they should be considered in the unemployment rate. Eventually, they will have to start looking for a job when the benefits stop coming in the mail and then they will be part of the unemployment. I would consider these people “free-riders” because they are living off our tax dollars and not doing a thing to help our economy.
Also, it is hard to believe such people when they say that they cannot find a job anywhere, because that is a lie and an excuse. They obviously are either not looking for any employment, or want a job too specific. I believe it is more the first problem. Though working in a fast food chain may not be the best job, it is a job and most food chains are always hiring. A little income is better than no income.
Reading the statement given by 51 year-old Karen Duckett frustrated me, but also is quite humorous. She states that she is unable to find employment for over a year and a half. However, looking for a job in the housekeeping department of a retirement community will be hard to come by due to the suffering of this market in the recent economy. She was either lacking the proper education or just refused to get a job. The reason she was so frustrated by the letter was because she knew that she was being lazy and would have to find a job.
Overall, I could not agree more with the statement on unemployment that says, “It’s coming down largely for the wrong reason: because people are dropping out of the labor market or not entering it.” People need to stop collecting the government checks and find a means of income.