Neuroth 1

Eila Neuroth
Ms. Rogers
English 12
10 October 2016
Unemployment in the United States
Unemployment is a large topic of debate in the United States. It is
something everyone fears. There is so much debate over the matter that
economists can't even agree upon the current state of the US unemployment
rate. There are many theories as to what causes and prevents unemployment.
Due to the fact that evidence that backs these theories is so circumstantial
researchers and economists cannot agree on what causes or prevents
unemployment. Also people are questioning whether US tax payer dollars should
be going to unemployment benefits or not. This is due to the fact that
unemployment benefits are so commonly abused.
On the surface the US unemployment rate is looking pretty good at this
point in time. Many would even say it is at an all time low. An example of this is
when author Frank Camp writes, "At 4.9%, the United States has reached what
many economists call "full employment," which is considered a sign of economic
health"(Camp 1). In the same article Camp also explains the meaning of "full
employment" with this statement, "Jared Bernstein of the Center on Budget and
Policy Priorities, and Dean Baker, co-director of the Center for Economic and
Policy Research write: "Most economists place the rate [of 'full employment'] in
the range of 5 to 5.5 percent, though some estimates go as high as 6 percent." In

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another article, The National Conference of State Legislature also made the
statement that all but 9 states in the US held generally stable unemployment
rates as of recently. Although the country is at "full employment" and has
generally stable unemployment rates, the seasonal drop, which is the drop in
employment at the end of summer, was much larger than usual; "Government
posted the largest drop (down 12,300). Seasonal losses occurred in local (down
10,600) and state (down 1,700) government, related to summer break at public
schools. Jobs in trade, transportation, and utilities declined 2,300. A majority of
the decrease was in retail trade (down 1,400), attributed to reported losses at
various retail establishments"(McHughes 1). The National Conference of State
Legislature also made the statement that all but 9 states in the US held generally
stable unemployment rates as of recently. While the topic of the amount of
people who are unemployed has been brought up, the question is, who are the
unemployed? In a study done by the Bureau of Labor Statistics, statistics show
that, among major worker groups, teenagers and African Americans have the
highest unemployment rates: The teenagers being at 15.7 percent unemployed
and African Americans at 8.1 percent unemployed.
While the unemployment rate is looking pretty decent on the surface level
they are not quite as they seem. The problem with the unemployment rate is that
not everyone is accounted for. To further explain this, author Frank camp writes,
"When individuals drop out of the labor force, they're no longer counted in the
official unemployment numbers, giving the appearance of a healthier job
market and economy." In order to find the actual measurement of unemployment

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in the US Camp urges us to look at the Labor force participation rate. "A key
difference between the unemployment rate and the LFPR is that the LFPR takes
into account everyone who isn't working. While the unemployment figures may
look outstanding at 4.9%, the LFPR shows a job force that simply hasn't
recovered," Camp explains. This information makes it clear that the
unemployment in our nation is much worse that we originally thought. The labor
Force participation rate has dropped 3.2% since 2006 and the labor force has
lost roughly 58,000 people in the in the month of July alone (Camp 1).
This recent statistical evidence points to a sickly job market unlike the publicized
unemployment rate, which insinuates that our country is at "full employment".
Besides the state of our countries employment experts still debate over
the fairness of unemployment benefits. Is it fair to make the public pay for
someone who doesnt have a job to have money? Is it fair to not give the
unemployed aid? What are the pros and cons of unemployment benefits? In one
statement author Joseph Becker explains the problem that lies at the heart of the
debate over unemployment benefits, "Logically, the term abuse extends to abuse
by taxpayers (who put in too little) as well as by claimants (who take out too
much), and widespread tax-evasion would act as a further limit on the
community's willingness to expand the program. In practice, however, it is only
the community's apprehension of claimant abuse which exerts a significant
limiting effect." Most of the problem is caused by the fact that the public is
avoiding taxes and the unemployed are taking advantage of their situation and
benefits. There is a "limit to the communities willingness to make provision for the

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unemployed out of a common pocketbook", yet on another hand there is a
necessity to provide for those that can not get a job to provide for themselves if
we want to keep people off the streets.
With all of the problems regarding unemployment rates and benefits there
is really only one solution, to lower the amount of unemployed in the US. How do
we do this? Now that is the big question. The reason unemployment is such a big
problem to begin with is that economists all have their own theories as to how to
prevent it yet they cannot prove that any one solution actually works. In one
paper Professor David Howell of Oxford pointed out what could be the solution to
"The U.S. rate steadily fell, reaching just 4% in 2000. The improvement in this
measure of relative U.S. employment performance coincided with a sharp
ideological shift away from government action and towards market
solutions"(Howell 1). Howell also explained that in the past switching to free
market fundamentalism has produced full employment. This means that if wages
are left with the ability to adjust and workers do not have a safety net, such as
unemployment benefits, the markets could yield full employment. Finn Ostrup of
Cambridge University makes a note that many economists think the same way
by saying that many analyses are made on a wage formation process. This fact
leads us to believe that there is a connection between employment and real
wage. The only issue is that "A relationship between the real wage and
employment is, however, also consistent with a wage formation where an
individual wage earner negotiates the wage with an employer, or where firms set

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the nominal wage but incur costs associated with the turnover of
workers."(Ostrup 7).
The world of issues regarding unemployment is a large one. Many if not
none of these issues can be solved today or even in this decade, but it is still
important to understand some of the thinking behind the unemployment
prevention methodology in the US. Knowing why and how our unemployment
rate is the way it is and why there is so much debate over benefits for the
unemployed can help Americans in making decisions for a better economic future
in the United States. One of the many lessons to be learned from this paper is
that numbers can be manipulated to the writers needs. In the case of
unemployment rates the statistics were manipulated by leaving out people and
thus making the state of employment in the US look better tan it really is. As for
the unemployment benefits, they are something political parties such as the
republicans and democrats have been arguing over for decades, and will most
likely argue over for a long time to come. These issues are incredibly daunting so
it is no surprise that a definite solution hasnt been found for them yet. Hopefully
our country will find ways to boost our economy before it causes problems, and
the only way this can be done is if the public has knowledge of unemployment
issues.

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Works Cited
Becker, Joseph M. The Problem of Abuse in Unemployment Benefits: A Study in
Limits. New York: Columbia UP, 1953. Print.
Camp, Frank. "August's 4.9 Percent 'Unemployment Rate' Isn't the Whole Story-Not Even Close." Independent Journal Review. N.p., 03 Sept. 2016. Web.
15 Sept. 2016.
"Employment Situation Summary." U.S. Bureau of Labor Statistics. U.S. Bureau
of Labor Statistics, n.d. Web. 15 Sept. 2016.
Express, Pat McHughes Paris. "Unemployment Up .3 Percent." Booneville
Democrat. N.p., 13 Sept. 2016. Web. 15 Sept. 2016.
Howell, David R. Fighting Unemployment: The Limits of Free Market Orthodoxy.

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Oxford: Oxford UP, 2005. Print.
Legislatures, National Conference of State. "National Employment Monthly
Update." National Employment Monthly Update. N.p., n.d. Web. 15 Sept.
2016.
Singleton, Jeff. The American Dole: Unemployment Relief and the Welfare State
in the Great Depression. Westport, CT: Greenwood, 2000. Print.
strup, Finn. Money and the Natural Rate of Unemployment. Cambridge:
Cambridge UP, 2000. Print.
"Unemployment Benefits and Other Help for the Unemployed." Official Guide to
Government Information and Services. N.p., n.d. Web. 15 Sept. 2016.
"Unemployment Insurance in the United States: Analysis of Policy Issues."
(1997): n. pag. Web.
<https://www.ssa.gov/policy/docs/ssb/v23n8/v23n8p50.pdf>.
"United States and Regional Unemployment Statistics." United States and
Regional Unemployment Statistics. N.p., n.d. Web. 15 Sept. 2016.
"United States." Economy: Population, GDP, Unemployment, Inflation, Spending.
N.p., n.d. Web. 15 Sept. 2016.
"United States Unemployment Claims Fall." DailySabah. N.p., 08 Sept. 2016.
Web. 15 Sept. 2016.
Vedder, Richard K., and Lowell Gallaway E. Out of Work: Unemployment and
Government in Twentieth-century America. New York: Holmes & Meier,
1993. Print.

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