Unemployment on the Rise
Written by Faith Anderson on September 6, 2011
Unemployment Rate May Rise as Job Competition Intensifies
This intensified competition for jobs means unemployment could exceed its historic norm of 5% to 6% for several more years. In fact, the nonpartisan Congressional Budget Office expects the unemployment rate to exceed 8% until 2014, and the White House predicts it will average 9% next year. Combined, the officially unemployed, the part-timers who want full-time work, and the people who have stopped looking for work altogether, make up 16.2% of working-age Americans, and are together considered the “underemployed”. In a healthy economy, the underemployment rate stays below 10%; since the official end of the recession two years ago, the underemployment rate in the U.S. has been recorded at 15% or higher.
Part-Timers Likely to Benefit First from Increased Consumer Demand
The portion of the workforce made up of part-timers looking for full-time work has risen faster than the rate of unemployment since the recession began at the end of 2007. This is because many companies reduced the hours of their employees once the recession hit. According to Heidi Shierholz, an economist at the Economic Policy Institute, if these companies restored all the lost hours to their existing staff, it would equal 950,000 full-time jobs without having to hire a single new employee. Due to these calculations, economists expect job growth to stay weak for two or three more years.
Experts Believe Hiring is a “Long Way Off”
In a healthy economy, two unemployed people, on average, are competing for each job opening. In the United States, the average is currently about 4.5 per opening. As frustrated Americans of all ages face constant rejection in their search for full-time work, the possibility of the economy improving and stimulating job growth remains grim. In fact, if the U.S. unemployment calculated in August took into consideration the millions of Americans who have given up and stopped looking for jobs, the unemployment rate would have been 10.6% instead of 9.1%. And because employers are still reluctant to even increase hours to part-timers, policy analyst at the National Employment Law Project, Christine Riordan, says, “hiring [new employees] is really a long way off.”