On the topic of unemployment, it is misunderstood and misrepresented by what one’s personal misconceptions of being unemployed actually means. While unemployment can paint the picture of the full time college student, a stay at home spouse, or an individual who is not actively seeking a job, none of those situations legitimately qualify one to fall under the terminology of unemployment. Unemployment rates represents the number of people in the work force who want to work and are actively job seeking; those who are not actively seeking are technically unemployed, but not considered as such since they are not doing so, thus excluding them from the work force. The Department of Numbers relayed statistics from the BLS’ 2016 unemployment survey that “the US unemployment rate fell 0.3 percentage points… to 4.7%” (US Unemployment). Unemployment is generally stated as a percentage, dividing the number of people who are unemployed by the total work force” (“What is Unemployment”). The purpose of this paper is to give a causal analysis as to the phenomenon of unemployment, one caused by job layoffs, outsourcing of work and technological advances that have reduced the need for human skill and/or labor.
According to the Department of Labor, there are two criteria one must meet in order to qualify as unemployed. First, one must be currently unemployed through no fault of his or her own, due to unfortunate circumstances such as getting laid off, a company downsizing or even a company’s downfall and cessation of operations. If a person is fired or has resigned from his or her job for any reason, he or she is still technically unemployed, but he or she is unemployed through fault, not because of any economic hardship. Those in this category do not meet unemployment criteria and thus are ineligible for benefits. Second, one must meet his or her state-mandated requirement for time worked and earned wages, which vary by state. For example, New York state requires a person to have worked in at least two calendar quarters of his or her “base period”, be paid at least $1,600 in wages in one of those quarters and during that period made a total of at least 1.5 times the amount you made in your highest-paid quarter that year (Truong, 2013).
Understanding the causal implications of unemployment, it is important to provide context and define exactly what unemployment is and why more and more people are finding themselves unemployed. A number of factors contribute to the currently high levels of unemployment. One is that the newly unemployed can find themselves out of work because of job layoffs. Also referred to as a “reduction in force,” workers of the United States work force are no stranger to job cuts. January 2016 saw job cuts skyrocket to 218% according to career placement firm Challenger, Gray & Christmas; the blow was particularly below the belt for energy and retail companies (Long, 2016). Even as unemployment rates main relatively low, Long (2016) describes that jobs are going bankrupt, multiple individual industries are in a recession and the economy as a whole is slowing down. An economic news release from the Bureau of Labor Statistics with seasonally adjusted statistics showed that in May 2016, 2,744,000 of unemployed persons were not on a temporary layoff with 1,982,000 of them being permanent job losers. In June 2016, Walmart cut 1500 jobs and subsequently put nearly 10,000 workers out of a job; spokesman for Wal-Mart Kory Lunberg stated that “the program will affect about two to three associates per store,” but those employees are being offered “more customer-facing roles within the company.” The economy’s slow pace at the end of 2015, the slowest since the first quarter, is a testament to the downfall of the world’s biggest corporations, cautious consumer spending and uncertainty over foreign economies.
Job outsourcing or the “movement of work” is defined by the BLS as “the movement of work that was formerly conducted in-house by employees paid directly by a company to a different company,” which can be inside or outside of the United States. The BLS Mass Layoff Statistics program investigates the effects of major drawbacks and this data is used for the Unemployment Insurance program. As for foreign workers, in 2013’s most recent data, U.S corporations and companies employed 14 million workers in overseas affiliates (Amadeo, 2016). Job outsourcing increases competition for the United States in various global markets and this globalization allows for lower prices on goods shipped back. However, while beneficial for goods and services, it puts millions of Americans out of work and creates long-term structural unemployment back in the U.S. too. It is a double-edged sword for company, consumer and employee: whatever someone loses, another gains often as a lower cost, but underlying or outright resentment grows between the costs gaps and geographic boundaries. Job outsourcing can come down to permanent worksite closure and internal restructuring such as being under new management, bankruptcy and financial strife. According to the research done by MLS (2005), job outsourcing hit manufacturing and technology-producing industries the hardest; when work was outsourced to foreign job markets, more than 50% of the time, it was to Mexico and China. Even as law requires the unemployed to keep zipped lips about it, some are speaking out in the face of the severance packages they received.
Finally, unemployment can come down to yet another reason that is out of the control of those affected: technological advances and new products and strategies making human skill and labor obsolete. here are various effects unemployment has on both our economy and society as well. Unemployment not only affects people individually, but it has an adverse effect on the economy as well. As a veritable macroeconomic indicator of an economy’s health, countries face a debt-crisis in which legislators and officials then raise taxes and interests to make up for the loss of more tax paying citizens. Known as technological unemployment, this change involves the introduction of labor-saving machines of efficient technologies that reduce need for human labor; a contemporary example of this is using self-checkout instead of going to an actual cashier or even using an ATM instead of going to an actual bank teller. Articles from Business Standard and NBC News are touting human labor to be obsolete by the year 2045. A scientist at Rice University Moshi Vardi says that the United States “is approaching a time when machines will be able to outperform humans at almost any task” (Korte, 2013). With the advancement of artificial intelligence and robots seeming to pop up on campuses, in hospitals, humans will be left without the thing that has driven their well-being and economic and financial safety for so long. Vardi contends that without human labor, there is no human well-being due to the removal of labor, an essential force to human life. Job industries that are most at risk for this robot revolution are administrative and white-collar office industries.
Unemployment obviously puts a financial strain on those affected; any income that is spent it going towards basics and necessities with no room or money leftover as disposable income for anything outside of that. Unemployment can also be caused by a multitude of factors, including but not limited to job layoff, job outsourcing and the revolution of technological unemployment. Understanding a few of the causes of unemployment enables the unemployed, employed and government legislators alike to craft as many feasible and painless solutions to this problem as they can. Unemployment, while rather context in causes and development, can be attributed to job outsource, technological replacements and job layoffs. There is much to go in regard to the discussions about unemployment; even with the strides made, it is dependent on the winner of the upcoming president election to spearhead reforming an important issue.
- Amadeo, K. (2016). How Outsourcing Jobs Affects the U.S. Economy. Retrieved July 05, 2016, from http://useconomy.about.com/od/tradepolicy/tp/How-Jobs-Outsourcing-Affects-US-Economy.htm
- Long, H. (n.d.). U.S. job cuts soar 218% in January. Retrieved June 28, 2016, from http://money.cnn.com
- Korte, A. (2016). Increasing Use of Autonomous Systems Could Threaten Jobs. Retrieved July 05, 2016, from http://www.aaas.org/news/increasing-use-autonomous-systems-could-threaten-jobs
- The Effects of Unemployment on Society and the Economy (n.d.). In Job-Interview-Site.com.
Retrieved May 21, 2016, from http://www.job-interview-site.com - Truong, A. (2013). Do I Qualify for Unemployment? How to Tell If You’re Eligible. Retrieved from https://www.learnvest.com
- What is Unemployment? – Definition, Causes & Effects (n.d.). In Study.com. Retrieved May
21, 2016, from http://study.com/academy/lesson/what-is-unemployment-definition-causes-effects.html.
