FileUnemployment

Why Reducing Unemployment Rate Is Not Enough

Author : Andy Peterson

Updated : May 13th, 2019

Why_Reducing_Unemployment_Rate_Is_Not_Enough

The rate of unemployment in the United States reached a record low by the end of April, which is said to have the lowest rate of unemployment in the last 50 years. The unemployment rate dropped to 3.6%, and the month of April will be the 14th consecutive month to record an unemployment rate below 4 percent. While the drop in the rate of unemployment appears to be a good sign for the economy on the outset, this statistic alone does not show the entire picture.

The Employment Situation Report for the month of April suggested that the US economy added no less than 263,000 jobs in the month of April. Along with the decline in the rate of unemployment, the United States economy has also witnessed another highly encouraging development.

The wage growth in the last nine continuous months has been over 3%, with the month of April recording a rise in the wage rate by 3.2%. The United States economy has witnessed the wage rate growth in such continuity for the first time since the great recession of 2008-09.

As the United States enter into a positive time-period with respect to the growth of employment rate, the government still have a major concern to address. The concern being, the 3.6% unemployment rate does not completely encapsulate the actual state of the matters on the grassroots level.

The official unemployment rate only includes those in the ‘labor force’. To remain in the labor force, the requirement is that one must have looked for an employment opportunity in the last four weeks.

The real unemployment rate, as opposed to the official unemployment rate, also includes the underemployed, the marginally attached, and discouraged workers. As a result, the real employment rate is considered to be more comprehensive as it represents a larger set of people who are at the bottom of the labor market.

The rate of real unemployment in the US is 7.3% for the month of April. Also, the reduction in the main unemployment rate is coincided with a decline in the labor force participation by 0.2 percentage point, which currently stands at 62.8%.

The records show that the share of people working or actively looking for work has seen a bare minimum change in the last seven years. This shows that aspects such as job mobility, combined with mediocre wage rate growth is not helping the employees grow in reality.

To counter this and provide a more organic environment for the employees and the employers, the government must come up with a comprehensive job creation strategy. The government must also cater to those who are not in the ‘labor force’, along with those who are currently seeking a job to see more sustainable growth in the economy of the United States.

The United States already gives importance to the start-ups to make sure that more and more people get opportunities. Start-ups are also said to produce a large number of jobs due to the sheer number of new ventures that come out every year. The successive governments over the years have spent a lot of amount of money to provide an organic infrastructure to help start-ups to prosper.

The issue here is that, in spite of the investment and support, nearly 75% of the start-ups fail in the early years. Also, Startups that have less than 20 employees generally have a negligible effect on net job creation until they pass the 5-year period.  

The government must diversify its policy programs beyond the start-ups, which is currently given high importance with respect to job creation. Sectors such as manufacturing, construction, and health care have been steadily increasing the intake of people. Governments providing incentives to these industries to create more jobs will help in creating more stable jobs. This may help in bringing down the number of underemployed and marginally attached workers.

There is a need for the government of the US to diversify its purview beyond the start-ups and look to provide incentives for high-impact companies that are locally based to accelerate the next level of growth.

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  1. I applied for unemployment in New Mexico because I wasn’t getting my full-time hours and my checks were never correct I was constantly fighting with the company now I’ve exhausted my unemployment benefits and they sent me a questionnaire about my work and it says adjuctation what does that mean.. I am extremely frightened

    1. Amal,

      Adjudication is like an “Appeals” process. You may be asked to present facts and paperwork relating to your claim. If everything is fine with your claim, please face it with confidence. You’ll be given a sound hearing.

    1. Carolyn,

      If this is your initial claim, it will take a min. of 7-10 business days for the determination to be made. Please reach out to the Unemployment Office for more.

    1. David,

      Please let us know the state you’re writing from. You can also visit the Unemployment Office’s official website for phone numbers.

    2. My initial unemployment benefits run out next month. How long does it take for the extension to be determined? As I havent found suitable work. And have met all requirements to find employment. Filed in TX. If I qualify for benefits do I automatically qualify for an extention?

      1. Le,

        The E.U.C(Emergency Unemployment Compensation) remains expired. There is no extension available. Please inquire further with the labor authorities in your state by calling them.

  2. I COLLECTED ABOUT $5000 OF UNEMPLOYMENT INSURANCE WHEN I WAS WORKING AND NOW THERE IS A PENDING COURT CASE AGAINST ME OUT OF PHOENIX TO GO TO COURT FOR 21 COUNTS OF FRAUD..WILL I GO TO JAIL? I AM SOO SCARED.JOJO

    1. James,

      The E.U.C(Emergency Unemployment Compensation) remains expired. There is no extension available. Please inquire further with the labor authorities in your state by calling them.

  3. I am Disabled I have had several surgeries on my lower spine. I found that I was not able to male it die to Bills became overwhelming.
    I got a Job with S3 security in Tallahassee f. Where I found out that all company rules were online and They said I needed to find them and opine to them. I told them I was with Dyslexia and I. could not find them. and 2. if I could have would not have been able to remember them. this is one of my life time Disabilities. I asked to be explained the Rules but was not. For 6 mounts I was praised by the places I worked. Then recently the Sargent told me to help a student locked out there Apartment. So I did. Next day he wanted to write me up for doing what he told me to do. I told him No I would not sign a demerit that would follow me around for ever Paper work does that! I all ways did the best I could. The Captain had made a open threat that he would do all he could to take badges and make us look bad to Fla. AG. I had hurt my ankle and am getting over it. They say the wishes of Property manager was reason I was Terminated with not following post orders. Not signing the forms excepting the wright ups. With just having Epidurals to ease the Spinal pain and them being 1/2 done I had attitude to being lied on by my Sargent. When I was told to do a job. I am kinda Glad I am out of there. No Supervision just the Sargent larking in shadows waiting to wright me up to make him look good so it seemed. I had to use my own Ins. to go get help for my leg. Now I don’t know if I can get Unemployment due to what they say I did after suitability doing the best I could to keep the Complex and Students as safe that I could.

    1. William,

      UI benefits are offered to claimants who’re able and available for work. Please call the Unemployment Office for clarification. Hope you get well soon!

  4. I have been trying to fill out unemployment application on line, but it will not let me put my social security # in the spaces
    required.

  5. From 1/2018 to 10/2018 I worked for a Merriville-based organization but I live in Illinois. The employer told me I couldn’t claim unemployment from Indiana because of my Illinois residency. Yesterday, I learned that I should have been able to. Can I claim those benefits now? I was unemployed from 10/19/2018 until 8/24/2019.

  6. I am trying to file a new unemployment claim on line and the link says it cant be reached. Are you experiencing any web site problems?

  7. I RECIEVED A”MY DOCUMENT” DATED 8/26/2019-TODAY STATING I DID NOT SEARCH FOR 2 JOBS LAST WEEK…BUT,1- 1/2 DAYS AGO, EARLY SUNDAY MORNING, JUST LIKE I HAVE FOR 9-WEEKS,I DID WHAT THEM SYSTEM TOLD ME TO DO. I FILED MY WEEKLY BENEFITS TELLING Y’ALL THAT ON THURSDAY 8/23/2019 I BEGAN WORKING AGAIN. I TOLD ON MY CLAIMING WEEKLY BENEFIT FORM THAT I ALSO WORKED FRIDAY. I TOLD THE AMOUNT OF MONEY I EARNED PER-HOUR, I TOLD THAT I I worked 16hrs for the week ending 8/24/19,i gave the total amount,and i told i have not got 10 cents of the money yet,and $12.75×16 is not more than $326.00. I just got home to learn payment is being held,once again i’m being punish for an unemployment crime i did’nt commit. Four hours of interviews last week led to me getting hired, that led to 16hrs of work,that was reported within the rules. I did everything right.

    1. Please register with PAcareerlink and attend the RESEA orientation as required and take the necessary documents with you. Then
      begin an active job search. The state wants to see this activity and is done in order to receive your benefit compensation.

      Take care

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