Unemployment in America: Four workers for every job
A new report from the Labor Department has good news and bad news
Think of the U.S. labor market as a big and ever-shifting puzzle.
Holes open. Bodies fill those holes. More holes open. More bodies seek to fill those holes.
And on and on it goes, based on a variety of complicated and interlocking factors such as the health of the U.S. and global economies, shifting global trade patterns, technological changes, consumer demand, business confidence, relative wages, fluctuating inflation rates and lots more.
The problem right now in the world's largest economy, of course, is that there are far too many bodies to fill the holes.
A new report by the Labor Department says that in March there were, in fact, 4.3 unemployed people for every job opening in America.
But as bad as that sounds, it's actually an improvement over recent months.
During the darkest days of the Great Recession, that number was closer to 7 people looking for every job, the Economix blog reports. Moreover, the total number of layoffs in the U.S. has been declining sharply, the Labor Department says.
That's not to say that all is well, however.
The big worry for many American workers — and for the U.S. economy as a whole — is whether these current holes in the labor market are cyclical (meaning: the jobs come back when the business cycle improves), or if they're structural (meaning: permanent changes in the economy result in permanently lost jobs).
According to research by University of Chicago economist Robert Shimer, cyclical changes can become structural if they go on long enough. That's because, as Catherine Rampell of the Economix blog wrote last December, "good workers become less employable, the longer they are out of work."
Here are the key points, according to Rampell:
Professor Shimer found that 51 percent of workers who had been unemployed for one week obtained work in the following month, but the share declined sharply after that. “For workers with duration less than six months, the job finding probability averages 31 percent,” he writes. “It falls to 19 percent during the next six months and just 14 percent for workers who have been unemployed for over a year.” In other words, in recent decades, a person out of work for a week was nearly four times as likely to find a job the next month as a counterpart who’d been out of work for a year.
This article originally appeared on GlobalPost.