Sunday, July 06, 2008

US Unemployment

USA slowly turns into unemployed nation
I don't buy the extreme head line of the article linked to above, although the contents seem factual enough. Take this quote "The nation's unemployment rate held steady at 5.5 percent." In the 1990's the Fed tried to keep the unemployment rate above 5%, the idea was a basic fear that if unemployment fell below 5% then inflation would increase according to the Phillips or Fisher curve.

Morally I feel if the government established policies to maintain unemployment above 5% then it is obligated to provide a safety net for those who are unemployed because of that policy. But the bottom line is that 5.5% unemployment isn't historically high.

There are problems with the employment picture in the US. One of them is that too many of the jobs are low paying service jobs. Related to that is the apparent policy of some service industry employers to keep employee hours below the minimum where they would get benefits. Another is that decision makers in business believe that paying as little as you can for employees not quiet qualified to do their jobs is the best way to boost corporate profits. You have experienced that the last time you got rude or poor service from a company.

The biggest problem facing the American work force today is that unemployment is rising at a time of rising inflation (violating the Phillips curve) leading to a demoralization of the consumer. This could lead to a serious downward spiral in spirits and the economy.
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Blogger Richard Jennings said...

There are still lots of high paying jobs on employment websites. Here's a few of them from's top 10 employment sites -

The whole list here:

7/7/08, 11:48 PM  

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