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    Explaining the Unemployment Figures

    No, not explaining the recent jobs report which, to put it mildly, shows not all that much improvement in the economy going on. Rather, explaining one aspect of the US unemployment numbers, this one:

    As you can see, the length of time that the average unemployed person is unemployed for is rising very quickly. This is not thought of as a desirable thing either. All else being equal, if we were going to have 10 million weeks of unemployment, we'd rather have 10 million people unemployed for a week than we would 100,000 people unemployed for 100 weeks. For people out of work for 100 weeks, nigh on two years, lose many of the very skills that people might employ them for.

    We then end up with people who are near unemployable, or at least who can only be got back into work with a huge amount of effort.

    Traditionally, such long spells of unemployment have been a rather un-American thing, being more common in Europe. Let Richard Layard explain:

    But if you break down unemployment into shortterm

    (under a year) and long-term, you find that short-term unemployment is almost the same

    in Europe as in the U.S. – around 4% of the workforce. But in Europe there are another 4%

    who have been out of work for over a year, compared with almost none in the United States.

    The most obvious explanation for this is that in the U.S. unemployment benefits run out after

    6 months, while in most of Europe they continue for many years or indefinitely.

    That is indeed how it has traditionally been. Yet in this current recession the eligibility period for unemployment pay has been extended to 99 weeks across the US. No, I don't say this is a bad idea, only that all things have their effects. Extending unemployment checks is likely to extend the duration of unemployment. This may well be better than leaving people with nothing after 26 weeks, but that's not my point here at all.

    Unemployment in America, the duration of it, is starting to look much more European. Which really shouldn't be a surprise, given that the method of dealing with unemployment, the time that people are eligible for unemployment checks, has become more European.

     

     

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    18 comments

    • Killin'Me  •  10 mths ago
      this article doesnt explain #$%$..
    • Jerry  •  10 mths ago
      Sense Reagan took war on the working person with trickle down economics that by the way
      didn't trickle and corporations now dictate wages the middle class is almost gone leaving the rich and a slave class. Good work rebublicans you really killed our country.
    • E Wynn  •  10 mths ago
      HUH??? Did the editor cut off the first part of the article before posting? I agree with the point he made about unemployment benefits. When you give people two years worth of unemployment checks, it stifles their desire to seek emplyment. Especially if they are non-whites. LOL....
    • enraged hillbilly  •  10 mths ago
      Did this article say anything useful?
    • SHiNOBi_11  •  10 mths ago
      "I don't worry about the deficit, it's big enough to take care of itself." – Ronald Reagan

      “Deficits don’t matter.” – Dick Cheney

      1. Raise the debt ceiling NOW to $17.11 trillion without spending cuts and without tax hikes! Raise it! Raise it! Raise it NOW!

      2. Quantitative Easing part III (QE3) NOW!

      PROBLEM SOLVED!!!
    • Bill  •  10 mths ago
      And yet the folks who have pirated all away, the wealthy "herd" are following their instincts and showing the classy facial expressions: complete disinterest. Screw the "little peole" right?
    • DADDYWONFOOTBALLY  •  10 mths ago
      Well at least the big banks are now solvent! Meanwhile state and local governments are closing. 20 million or more have been screwed out of their jobs. Raise taxes always a good idea. And of course mess with social security. Great Job done by both Repubs and democrats.
    • DADDYWONFOOTBALLY  •  10 mths ago
      Of course I can apply for a Mexican Truck divers license. And try to get a job down there.
    • CUBBYBOY  •  10 mths ago
      Obama was always touting the European model -- now we have it !
    • Thinking Out Loud  •  10 mths ago
      "We then end up with people who are near unemployable, or at least who can only be got back into work with a huge amount of effort."

      What does this mean? If you are out of work for a long time you lose all your brain power, all your expertise and lose it to the point you are no longer employable? Give me a break!

      It''s this kind of attitude that gets passed off as true that is leading companies to discriminate against the unemployed. I also take exception to the notion of increased unemployment leads to longer employment. That may be true for a very small percentage of people, but the other reason is the small number of jobs being created do not support a living wage.

      This is a true situation: An engineer applied for a part-time administrative job because he can't find anything appropriate for his background. Even if he would be considered for the job, which he wouldn't be, he can't make enough to feed himself, let alone a family. Is it worth his time and effort to apply?

      Unemployment is a safety net, and pays about $10/hr. maximum in California. I don't believe people are choosing to live with very little over looking for a job and this article does a disservice to the millions of people looking for work.
    • A Yahoo! User  •  10 mths ago
      There is nothing stopping American people from Emigrating abroad to flee economic imprisonment here in the USA.
      • Kevin 10 mths ago
        I hear Greece calling?
    • A Yahoo! User  •  10 mths ago
      If I had one wish granted to me I would not wish to be rich. I would wish that all governments and corporation and world banks were destroyed, forever. Evil they are.
      • Kevin 10 mths ago
        What a sad person you must be. If what you wish for were true, there is a very good chance you would never have survived childhood, and would die before 40. This is the best time to be alive. Enjoy it.
    • letscrack l  •  10 mths ago
      Google H1B Visa Red Tape and US Unemployment for the blog

      How H1B immigrants contributes towards US economy ?

      1) H1B employees need a place to live, so they rent apartments. Average Rent paid per year - $12,000.

      2) H1B employees need food, water, electricity and other utilities to sustain their families. Money spent on such services per year - $6000.

      3) Many H1B employees typically go to school in US for MS. Average tuition fee paid + living expenses - $40,000.

      4) H1B employees typically travel back to their home country once every year on vacation - $2000.

      5) Average taxes paid to US government - $20,000.

      Total Contribution in 6 years = $12,000X6 + $6,000X6 + $40,000 + $2,000X6 + $20,000X6 = $280,000

      How Red Tape is hampering H1B program ?

      Stringent rules and regulations coupled with increasing costs are preventing more and more companies from hiring H1B employees. Here are some examples -

      1) For H1B employees in consulting, Visa is being tied to a project.

      2) If an employee moves to a different location an amendment needs to be filed.

      3) Increased H1B filing fees.

      Due to all these added complexities companies are avoiding hiring H1B employees. This is evident from the fact that for fiscal year 2012 only 18,400/65,000 (general quota) and 11,900/20,000 (Masters quota) have been consumed as of 07/01/2011.

      How poorly managed H1B program is adding to US unemployment woes?

      1) H1B employees after being denied Visa or due to increased red tape are choosing to go back home.

      2) Positions that H1B employees used to occupy are being outsourced or are being left vacant.

      3) H1B employees who used to contribute $280,000 to US economy are not there to sustain it.

      How is this creating a lose lose situation for H1B employees and US ?

      1) H1B employees who have spent several years in US, have to return back to their home countries.(Loss to H1B employee)

      2) Corruption is rampant in their home countries so they will have to learn to deal with it. (Loss to H1B employee)

      3) The money that H1B employees used to generate towards the US economy is gone and gone with it are any jobs related to services that H1B employees used to consume. (Loss to US)

      4) Many of these H1B employees if given permanent residency in US would have started their own companies and created so many more jobs. That will not happen. (Loss to US)

      How much more ironic can anything get ? Sad but True.
    • guru  •  10 mths ago
      americans have become lazy and unwilling to work. that's why they bring in millions of Mexicans to do any hard work. If Americans were willing to do these jobs, there would not be illigal immigration.
    • A Yahoo! User  •  10 mths ago
      Trust not the US leadership.
      Ignore the news media.
      Opt out of this current establishment.
      Reject Usury and Fiat.
    • GRANDMAFUFU  •  10 mths ago
      This is not meant to be a racist statement, but I am sure many will try to make it so. You also have to look at the breakdown of "races" to get a better picture, not just of unemployment benefits but medicaid and welfare benefits, as one does dove tail into the other. Any intelligent person, parent knows that if you just keep giving handouts as rewards then sooner or later that child will most likely end up on the unemployment/welfare rolls. Why? Because parents think they can "buy/reward" their kids to do the things they should do just because it is the right and morally responsible thing to do. So, for example, if you still have kids living at home who are in their late 20;s, early 30's, it most likely is because you are "enabler" to their being unwilling to "stand on their own two feet, take a few knocks, get up and try again". This is become more prevalent in our society. Then we have the issue of girls/women who are getting pregnant multiple times with no means of support and most likely without the knowledge of who the father is because they know that the "government" (that's us, folks, the working taxpayers) will take care of them. And, God forbid, after the 2nd and 3rd child being born under these conditions, we should make them get their tubes tied or get a hystorectomy (??? spelling)? The ACLU will be down our throats in a heartbeat. And, God forbid that drug testing should be made mandatory before forking over the money!!!It is our liberal society that should be blamed for a good part of the unemployment issues. Why work when you can get paid to stay home and sit on your butt? And, while the majority of the people who fall in the catagories mentioned are non-white, even the whites are jumping on the bandwagon in bigger numbers. We need to go back to being an accountable responsible moral society and pull ourselves up by the boot straps and get our rears in gear.Doubt it will happen with all the Liberal Dems taking from the Seniors and other hard working legal American taxpayers to pay for their socialistic programs. But this is why so many companies are going overseas--it is exactly what I would do, and you would to if you continued to know that you had to bust your butt to pay for those who know how to "milk the system". We should be ashamed of ourselves for allowing this to happen.It hasn't worked in Canada or Europe and now we want it here as well?? Wake up people. We are self-imploding!!!
    • Donald Braun  •  10 mths ago
      Tens of trillions of dollars left the world economic system when the investment bankters and collaborators got caught cheating the system and each other. Basically it was a loss of trust in the system and in the future and this caused the whole system to run dry - like a well in a long drought. Worldwide austerity will help no one and will hurt many for years, maybe generations to come. The world is capable of returning to worldwide prosperity through booming industry if only those who have power and are in control have the vision and political will. Unfortunately, plutocrats prefer enslaving most of the population in one way or another to serve themselves rather than humanity. American corporations are hiring at a fast clip, only they are hiring workers in China, India and peoples inn other developing countries who will work for 1/10 the amount American workers can live on. This is fueled by their undervaluing of currencies, especially China.
    • Jennifer  •  10 mths ago
      An H1-b visa holder is not an immigrant. H1-b is only a temporary

      visa which allows the holder to work for the company who sponsored the

      employee for up to 3 years, and renewable once for up to 3 more years

      if that company wants to keep that particular worker.

      What is the percentage of H1b visa holders that become U.S.

      citizens, relative to the whole group of H1b visa holders?

      What is the percentage of H1b visa holders that have the intention of

      becoming a U.S citizen prior to leaving their homeland, relative to

      the whole group of H1b visa holders?

      I have met and worked with over 60 H1b visa holders and not one of

      them, when asked, has ever had any intention of becoming a U.S.

      citizen. They all have the bizarre notion that the entire planet

      should be open to them as a workplace and carry with them an inflated

      sense of entitlement. They seem to be stuck on the fact that having

      taxes witheld from them is unfair. They are particularly stuck on the

      notion that having Social Security (retirement pension) tax whitheld

      from their pay is unfair. My contention is that it is the price to pay

      for the priviledge of working in the USA. YES, I said priviledge. It

      is NOT a right! Only U.S. citizens have the right to work in the USA.

      All others are merely granted the privilege.

      The sum total of monetary contribution by H1b visa holders to the U.S.

      economy is ostensibly meaningless in a $14 trillion dollar economy.

      The rants and raves and justifications of these people , when

      psychoanalyzed, is beset with self-entitlement and self-aggrandizement

      as though they are doing a favour to the USA by working there. They

      view the USA as an entity, as a thing, an object.

      The vast majority of Indian H1b visa holders are nothing more than

      economic mercenaries motivated solely by a desire for monetary or

      material gain.

      The USA is not a "thing". The United States of America IS it's

      citizens. "

      -- this message brought to you by a lawfully born citizen of The

      United Kingdom of Great Britain. --
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