Friday, April 24, 2009

The reality of unemployment

One of the products of the recent economic downturn is an increase in "unemployment." At least once a month we get new unemployment figures and collectively wring our hands over the increase. News reporters and magazine writers give us interviews with the recently unemployed and how they are coping with their "unemployment." I submit that we do not have a consistent concept of the components of the unemployment statistics and have no consistent idea or definition of what it means to be unemployed.

Usually, the person interviewed as recently losing their job, is cited as having worked for the same company or in the same type of business for a long period of time. What is ignored in the news accounts is the underlying problem associated with employment in the best of times. The graph above, from the Bureau of Labor Statistics demonstrates the problem. The bottom line of the graph is 4% unemployment. In other words, 4% of the population is always unemployed.

In most cases, the newly unemployed are just joining those who lost their jobs during even boom times. The present unemployment rate is about 2% higher than the jobless rate in 2003. The actual unemployment rate topped out at 6.3% in 2003 and the last figure for March, 2009 was 8.5% a difference of 2.2%.

Why this observation? Losing your job is a fact of life in America today. If you do not prepare for the event, you will suffer. The time to think about upgrading your job skills is right now. Go to school. Learn a new trade. Take an on-line class. Do yourself and your family a favor, don't wait for the pink slip, retool right now.

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