Unemployment rates show how prosperous a country’s economy is, and it is directly related to periods of growth and recession. Even though the US job market received approximately 14,000 job vacancies fewer than experts and economists anticipated, the national unemployment average in the US subsided to 4.3% in 2017, and more recently to 4.1%.
These numbers indicate that unemployment in the US has reached an all time low, but it is debatable if these figures show that America is benefiting from this seemingly positive statistic.
Unemployment in the US
American employers are finding it increasingly difficult to hire staff who are the ‘right fit’ for the job, as the talent pool available to them has significantly reduced in size and quality. It is difficult for the average Joe to comprehend how it is possible for a country with one of the lowest reported unemployment rates in the world, to only count 60% of its population in paid employment.
This ‘discrepancy’ seems to have its roots in the fact that unemployment rates are calculated by the number of unemployed people actively looking for employment.
A more accurate picture would be formed if unemployment rates by the Bureau of Labor Statistics also took into account the number of people that could potentially belong to the US workforce.
The more accurate results would also include people who have resigned and don’t want to–or are unable to–work. That percentage would most likely raise the figure to approximately 63%.
Unemployment in the US Since the Recession
Worker numbers have declined exponentially since the economic recession took hold and it is hard to see the light at the end of the tunnel. One of the reasons for this is the increasingly aging population, which means that there are currently more retirees per worker than ever before. Nevertheless, there are many Americans between the ages of 16 and 64 who are fit for work, but do not consider themselves part of the US workforce.
The recession is partly to blame for all the aforementioned, however, there are several other reasons for a reduced active workforce, some of which relate to education and the advance of technology to levels never before reached. In relation to education, the average American is more likely to remain in education for a longer period of time, in order to survive in an increasingly ultra-competitive job market, which requires highly-skilled, well-educated individuals to join its ranks.
On the face of it this is not a negative predicament, however, in order for that workforce to exist, more and more individuals start their working life with a considerable amount of debt to clear, as further education is not free in the US. It also means that educated Americans start work later in life, or remain in work past retirement age due to their inability to survive on their pensions, and the lack of early retirement opportunities compared to the more recent past.
The societal impact this has on the US is immense, as it creates a classist system of employment opportunity, with those from more privileged backgrounds having a clear advantage compared to those from lower societal tiers.
The latter not only face the prospect of earning much lower wages during their lifetime, but is often less educated due to family commitments and responsibilities which in turn do not enable them to study for as long as privileged members of US society. This seems to be at the heart of societal inequality and lack of opportunity in the US where employment is concerned.
Highest and Lowest Unemployment Rates by State
The Obama administration came to a close with official unemployment statistics lower than those it had started with. In early 2009 unemployment rates were recorded at 7.6%, with a staggering rise to 10% later on the same year. Amazingly, by October 2016 unemployment had reduced to 4.9%. The US has always been a country with high rates of employment compared to their European counterparts, who place more importance on social policies that make employment fair and equal.
In a preliminary report published in April 2018 by the Bureau of Labor Statistics, unemployment rates appear to be significantly lower than the numbers observed during previous months, in the states of Delaware, Illinois, New Mexico and South Carolina. The state of Hawaii is displaying the lowest unemployment rate among all US states, with a record number of 2.1%. The state of New Hampshire also boasts a very low unemployment rate at 2.6%.
States with the Highest Unemployment
Some of the US states with the highest unemployment percentages include Alaska, with a staggering 7.1%, the District of Colombia with 5.6% and West Virginia with 5.4%.
The root cause of high unemployment rates in several US states can be found in job losses in construction and manufacturing, large corporations making small businesses suffer as well as the lax employment laws in states like North Carolina, which allow ‘at-will employment’ and make it alarmingly easy for businesses to dismiss employees without any liability.
As a general rule of thumb, the state one is in directly affects the income one will receive as an employee. For instance, in the state of Mississippi the average income of the top 1% in Clarksdale amounts to $608,574, whereas in the state of New York the average income of the top 1% in Jackson amounts to $19,995,834, which is 97% higher than the average in Mississippi!
When comparing the poorest states to unemployment rates published in 2018, a further disturbing picture emerges. States like West Virginia, Arkansas and New Mexico, all note unemployment rates of 3% and above.
Focus has to also be shed on the type and quality of employment this increasingly larger workforce is enjoying. Current US Poverty Statistics, published by Kairos Center, report that 60% of those currently in paid employment are only paid the minimum wage.
The report also sheds light on the gap between white unemployment rates compared to black unemployment rates with comparable worrying patterns. The report also reveals that 62.1% of all bankruptcies in 2007 were due to medical debt, however three quarters of that percentage had health insurance in place.
Largest Employers in the US
The notion that large corporations are better for the economy is not a new, nor surprising, notion. Large corporations affect wages, technological advancement, workforces and subsequently the world’s financial markets. In America everything that is bigger is better and this seems to apply to the corporations employing a very large percentage of the population.
Bigger corporations are reportedly more productive, and they offer their employees more benefits and higher wages, making them attractive to the job market. Larger and multinational corporations also benefit from streamlined policies and procedures, which leave little to no room for unfair treatment of employees.
There are several disadvantages of working for corporate giants however, including the potential inability to adjust to diverse cultural and social environments, the varied ways of ‘doing business’ in different countries around the world, which can include illegal activities, and ultimately monopolies, which can be very damaging for a competitive market, as it excludes small businesses from presenting any sort of competitive alternative to the general public.
Moreover, the top 10 American corporations employ a staggering 5.6 million employees, with Walmart employing almost 40% of them; that is almost 2.2 million employees. More specifically, some of the largest employers in the US include McDonald’s, Target, Hewlett-Packard and General Electric, who employ an impressively large number of employees.
With large profits, come more significant staff benefits. Target in particular seem to be offering a great benefit package to their employees, which includes health-related benefits, such as dental, medical and pharmacy benefits, as well as discounts and long-term disability insurances.
Target also seem to show their appreciation to staff by offering learning and development opportunities to staff who show ambition and relevant ability, as well education assistance packages for those who show promise and would like to expand their horizons. Walmart employees enjoy similar benefits, which include a good medical, dental and vision insurance, which Walmart also offers to part-time employees, making it a really attractive company for workers.