Unemployment in the United States discusses the causes and measures of US unemployment and strategies to reduce them. Job creation and unemployment are influenced by factors such as economic conditions, global competition, education, automation, and demography. These factors can affect the number of workers, the duration of unemployment, and the level of wages.
Video Unemployment in the United States
Overview
Unemployment generally falls during periods of economic prosperity and rises during the recession, creating significant pressure on public finances as tax revenues decrease and the cost of social safety nets increases. Government spending and taxation decisions (fiscal policy) and US Federal Reserve interest rate adjustment (monetary policy) are important tools for managing the unemployment rate. There may be an economic trade-off between unemployment and inflation, because policies designed to reduce unemployment can create inflationary pressure, and vice versa. The US Federal Reserve (The Fed) has a dual mandate to achieve full employment while maintaining low inflation. The main political parties debated the right solution to increase the level of job creation, with liberals arguing for more and conservative government spending arguing for lower taxes and fewer regulations. Polls show that Americans believe job creation is the most important government priority, by not sending overseas jobs the ultimate solution.
Unemployment can be measured in several ways. Someone is defined as unemployed in the United States if they are unemployed, but have been looking for jobs in the last four weeks and are available for work. People who are not employed or defined as unemployed are not included in the labor force calculations. For example, as of September 2017, the unemployment rate in the United States is 4.2% or 6.8 million people, while the broader U-6 unemployment rate of the government, which includes half-part-time unemployment of 8.3%. Both levels are below the November 2007 level preceding the Great Recession. These figures are calculated with a civilian workforce of about 159.6 million people, relative to the US population of about 326 million people.
The US Bureau of Labor Statistics (BLS) publishes a monthly "Summary of Employment Situations" with key statistics and comments. As of January 2018, approximately 125 million people in the United States have found full-time employment (at least 35 hours a week in total). In contrast, there are approximately 206 million people of working age (people ages 15-64) in the United States. The total number of job vacancies on the last business day of January 2018 is 6.3 million.
Maps Unemployment in the United States
Definition of unemployment
The US Bureau of Labor Statistics has defined the following basic work concepts:
- People with jobs are hired.
- People who are unemployed, looking for work in the last 4 weeks, and are available for unemployed jobs.
- People who do not work or do not find work in the last 4 weeks are not included in the workforce.
Hired
The employed person consists of:
- Anyone doing any work to pay or make a profit during the survey reference week.
- Anyone who does at least 15 unpaid work hours at a family-owned company operated by someone in their home.
- All people are temporarily absent from their regular work, whether they are paid or not.
People who work full time work 35 hours or more, consider all jobs, while part-time workers work less than 35 hours.
Idle
Who is considered unemployed?
- People are classified as unemployed if they do not have a job, have been actively looking for work within the previous 4 weeks, and are currently available to work.
- Workers expecting to be withdrawn from layoffs are counted as unemployed, whether they have engaged in certain job search activities.
- In all other cases, individuals should have engaged in at least one active job search activity within 4 weeks prior to the interview and are available for employment (except for temporary illness) to be counted as unemployed.
Labor force
Who is not in the workforce?
- Persons not in the workforce are those who are not classified as unemployed or unemployed during the survey reference week.
- The labor force measures are based on non-institutional civilians aged 16 and older. (Excluded are people under the age of 16, everyone is limited to institutions such as nursing homes and prisons, and people who are active in the Armed Forces.)
- The labor force consists of workers and defined as unemployed. Expressed as a formula, labor force with workers and unemployed.
- The rest (those who have not had a job and have not looked for one in the last 4 weeks) are counted as "not in the workforce". Many who are not in the workforce go to school or have retired. Family responsibilities keep some people out of the workforce. Workers
- "Marginally installed" are those who are not in the workforce because they are not looking for work within the previous 4 weeks. However, they have searched in the previous 12 months and both are available to work and want to do it. Most marginally bound workers are not looking for desperation over job prospects or because they are in school.
AS. job history
During the 1940s, the US Department of Labor, in particular the Bureau of Labor Statistics (BLS), began collecting employment information through monthly household surveys. Other data series are available back to 1912. The unemployment rate varies from as low as 1% during World War I to as high as 25% during the Great Depression. Recently, it peaked at 10.8% in November 1982 and 10.0% in October 2009. Unemployment tended to increase during the recession and dropped during the expansion. From 1948 to 2015, unemployment averaged about 5.8%. There are always some unemployed, with people who change jobs and newcomers into a job-seeking workforce. This is called frictional unemployment. For this reason, the Federal Reserve is targeting the natural rate of unemployment or NAIRU, which is about 5% by 2015. The unemployment rate below this level will be consistent with rising inflation in theory, since the shortage of workers will bid wages (and thus prices) rise.
Jobs created by the term President
Various sources summarize the amount of work created by the term of office of the President. The numbers may include the creation or combination of personal or public work. The Federal Reserve Economic Database (FRED) contains the total level of non-agricultural employment, a measure of private sector job creation. For President Obama, between February 2009 and December 2015, the private sector added a total of 10 million jobs. The Risk Behavior Blog also reports the number of private sector jobs created by the term of office of the President. More than 10 million jobs were created in each of President Clinton's two periods during the 1990s, by far the largest number of presidents recently. President Reagan averaged over 7 million in every term during the 1980s, while George W. Bush had the creation of a negative work in the 2000s. Each of these presidents adds public sector jobs (ie government), except for President Obama.
Recent employment trends
There are various steps used to track the state of the US labor market. Each provides insight into the factors that affect the work. The Bureau of Labor Statistics provides a "chart" showing the major variables related to jobs in the economy. Federal Reserve members also gave Congressional speeches and testimony explaining their views on the economy, including the labor market.
The US Federal Reserve tracks various labor market metrics, which affect how to set monetary policy. One "dashboard" includes nine steps, only three of which have returned to pre-crisis levels (2007) as of June 2014. The Fed also publishes a "Labor market condition index" that includes scores based on 19 other employment statistics.
Recovery speed
Research shows the recovery from the financial crisis can drag on relative to the general recession, with long periods of high unemployment and below-standard economic growth. Compared to the financial crisis and the combined recession in other countries, the recovery of US jobs after the 2007-2009 recession is relatively fast.
Demographics and job trends
BLS statistics show workers born overseas have filled jobs that are not proportional to their share in the population.
- From 2000 to 2015: 1) Overseas represent 33% of the increasing age population 16, but represent 53% of the increase in labor force and 59% of employment increase; 2) The number of native-born workers increased by 5.6 million (5%) while the number of workers born abroad increased by 8.0 million (47%); and 3) Labor force participation declined more for native birth (5 percentage points) than foreign births (2 percentage points).
- Comparing December 2007 (before crisis) to June 2016, the number of overseas workers employed rose 13.3%, while the number of native-born workers rose 2.1%.
Incarceration
- The average annual workweek for former offenders is reduced to 5 weeks relative to the 42-week base, resulting in a 12% drop in jobs.
- The decline in employment for those who spend time in prison or jail is 9.7% for young white men, 15.1% for young black men, and 13.7% for young Hispanic men.
Unemployment causes
There are various domestic, foreign, market and government factors that affect unemployment in the United States. It can be characterized as a cycle (related to business cycle) or structural (related to underlying economic characteristics) and includes, among other things:
- Economic conditions: The US faces a subprime mortgage crisis and resulted in a 2007-2009 recession, which significantly increased the unemployment rate to a peak of 10% in October 2009. The unemployment rate fell steadily afterwards, returning to 5% by December 2015 due to conditions the economy is improving.
- Demographic trends: U.S. has an aging population, which drives more people out of the labor force relative to the civilian population. This has resulted in a long-term downturn in the labor force participation rate beginning around 2000, when Baby Boomer generations began to retire.
- Level of education: Historically, as education levels increased, the unemployment rate decreased. For example, the unemployment rate for college graduates was 2.4% in May 2016, versus 7.1% for those without a high school diploma.
- Technology trends, with automation replacing workers in many industries while creating jobs in others.
- Globalization and source trends, with employers creating jobs in overseas markets to reduce labor costs or avoid regulations.
- International trade policy, which has resulted in a considerable trade deficit (greater imports from exports) since the early 2000s, which reduces GDP and jobs relative to trade surpluses.
- The immigration policy, which affects the nature and number of workers entering the country.
- Monetary policy: The Federal Reserve conducts monetary policy, adjusts interest rates to drive the economy towards full employment targets around 5% unemployment rate and 2% inflation rate. The Federal Reserve has kept interest rates near zero since the 2007-2009 recession, in an effort to boost employment. It also injects large sums of money into the economy through quantitative easing to boost the economy. In December 2015, he raised interest rates for the first time in moderation, with guidelines intended to continue if economic conditions were favorable.
- Fiscal policy: The Federal Government has significantly reduced its budget deficit since the 2007-2009 recession, resulting from a combination of improved economic conditions and recent measures to reduce spending and raise taxes on higher income taxpayers. Reducing budget deficits means governments are doing less to support jobs, other things are the same.
- Unity: The ratio of people represented by unions has dropped consistently since the 1960s, weakening the power of labor (workers) relative to capital (owners). This is because of a combination of economic trends and policy choices.
- The trend towards more workers in "show" or access economies, in alternative work arrangements (part-time or contract) rather than full-time; the percentage of workers in the arrangement rose from 10.1% in 2005 to 15.8% by the end of 2015. This implies that all net employment growth in the US economy (around 9 million jobs between 2005 and 2015) occurs in alternative work settings, in traditional occupations slightly decreased.
Fiscal and monetary policies
Employment is the cause and response to the rate of economic growth, which can be affected by government fiscal policy (expenditure and tax decisions) and monetary policy (Federal Reserve action.)
Fiscal Policy
The US has historically experienced a large annual debt increase from 2008 to 2013, adding more than $ 1 trillion of national debt annually from fiscal year 2008 to 2012. The deficit is growing mainly due to the severe financial crisis and recession. With US GDP of around $ 17 trillion, the expenditure shown by this deficit consists of a large number of GDP. The Keynesian economy argues that when economic growth is slow, larger budget deficits are stimulative to the economy. This is one of the reasons why a significant deficit reduction represented by fiscal cliffs is expected to lead to a recession.
However, the deficit from 2014 to 2016 is in line with historical averages, which means it is less stimulative. For example, the CBO reported in October 2014: "The federal government has a budget deficit of $ 486 billion in fiscal 2014... $ 195 billion less than the shortfall recorded in fiscal year 2013, and the smallest deficit recorded since 2008. Relative to size economy, the deficit - an estimated 2.8 percent of gross domestic product (GDP) - is slightly below the average experienced over the last 40 years, and 2014 is the fifth year in a row where deficits decline as a percentage of GDP since peak 9 , 8 percent in 2009. With CBO forecasts, revenues are about 9 percent higher and spending is about 1 percent higher by 2014 compared to the previous fiscal year. "
As part of Barack Obama's economic policy, the United States Congress is funding about $ 800 billion in spending and tax cuts through the 2009 American Recovery and Reinvestment Act to stimulate the economy. Loss of monthly jobs began to slow down shortly afterwards. In March 2010, work began to increase. From March 2010 to September 2012, more than 4.3 million jobs were added, with consecutive monthly increases from October 2010 to December 2015. In December 2015, employment of 143.2 million was 4.9 million above pre-peak -crisis in January 2008 amounted to 138.3 million.
Monetary policy
The US Federal Reserve (The Fed) has a dual mandate to achieve full employment while maintaining low inflation. US Federal Reserve interest rate adjustment (monetary policy) is an important tool for managing the unemployment rate. There may be an economic trade-off between unemployment and inflation, because policies designed to reduce unemployment can create inflationary pressure, and vice versa. The debate over monetary policy during 2014-2015 centered on the timing and rate of interest rate hikes, as zero-interest rate targets remained in place since the 2007-2009 recession. In the end, the Fed decided to raise interest rates marginally in December 2015. The Fed explains the type of labor market analysis it does in making interest rate decisions in minutes from the Federal Open Market Committee (FOMC), the governing body of its policy, among channels - other channels.
The US Federal Reserve has taken significant action to stimulate the economy after the 2007-2009 recession. The Fed expanded its financial balance significantly from 2008 to 2014, which means basically "print money" to buy large amounts of mortgage backed securities and US government bonds. This raises the price of bonds, helps keep interest rates low, encourages companies to borrow and invest and people to buy homes. The plan to end quantitative easing in October 2014 but has not decided when to raise interest rates from record lows. The Fed also tied its actions to the outlook for unemployment and inflation for the first time in December 2012.
Political debates
liberal position
The liberals usually argue for government action or partnerships with the private sector to promote job creation. The general proposal involves spending on stimulus for infrastructure development, clean energy investment, unemployment compensation, education loan assistance, and retraining programs. The Liberals have historically supported trade unions and protectionist trade policies. Liberals tend to be less concerned with budget deficits and debt and have a higher tolerance for inflation or currency devaluation to improve trade competitiveness, as weaker currencies make exports relatively cheaper. During the recession, liberals generally advocate solutions based on Keynesian economics, which argue for additional government spending when the private sector is unable or unwilling to support sufficient levels of economic growth.
Conservative position
Conservatives usually argue for free-market solutions, with fewer government restrictions from the private sector. Conservatives tend to oppose stimulus or bailout spending, leaving the free market to determine success and failure. General proposals involve deregulation and reduction of income tax. Conservatives have historically opposed trade unions and fostered free trade agreements. The fiscal conservatives expressed concern that higher budget deficits and the belief in debt damage, reducing investment and spending. Conservatives argue for policies that reduce or decrease inflation. Conservatives generally support the supply-side economy.
Poll data
The rich are much less inclined than other American groups to support the government's active role in tackling high unemployment. Only 19% of rich people say that Washington should ensure that everyone who wants to work can find a job, but 68% of the general community support is a proposition. Similarly, only 8% of rich people say that the federal government should provide jobs for all able and willing people who can not find employment in private employment, but 53% of the general public thinks it should be. A September 2012 survey by The Economist found those who earn more than $ 100,000 per year are twice as likely to mention the budget deficit as the most important issue in deciding how they will choose than middle or low-income respondents. Among the general public, about 40% say unemployment is the most important issue, while 25% say that the budget deficit is.
A March 2011 poll of Gallup reported: "One in four Americans say the best way to create more jobs in the US is to maintain manufacturing in the country and stop sending jobs overseas, and that America also suggests job creation by increasing infrastructure work, lowering taxes, helping small businesses, and reducing government regulations. "Furthermore, Gallup reports that:" Americans consistently say that jobs and the economy are the most important issues facing this country , with 26% mentioning special jobs as the nation's most important issue in March. " Republicans and Democrats agree that bringing home jobs is the number one solution approach, but different to other poll questions. Republican items with the next highest ranking lowered taxes and reduced regulation, while Democrats preferred infrastructure stimulus and more aid to small businesses.
Furthermore, US sentiment about free trade has changed more negatively. The October 2010 Wall Street Journal/NBC News poll reported that: "[M] more than half of those surveyed, 53%, said free trade agreements have hurt the US, up from 46% three years ago and 32% in 1999. "Among those earning $ 75,000 or more, 50% now say the free trade pact has cost the US, up from 24% saying the same thing in 1999. Across the party line, income, and job type, 76-95% Americans surveyed agreed that "outsourcing production and manufacturing work abroad is the reason the US economy is struggling and more people are not employed".
The Pew Center reports on poll results in August 2012: "Fully 85% of self-described middle-class adults say it's more difficult now than a decade ago for middle-class people to maintain their standard of living. 62% said about the big companies, 44% of the Bush administration, 39% of foreign competition and 34% of the Obama administration. "
debate 2008-2009
The debate surrounding the American Recovery and Reinvestment Act of 2009 (ARRA), an estimated $ 800 billion of stimulus bill passed due to the subprime mortgage crisis, highlights these views. Democrats generally advocate liberal positions and Republicans advocate conservative positions. Republican pressure reduces the overall size of the stimulus while increasing the ratio of tax cuts in legislation.
This historical position was also expressed during the debate surrounding the 2008 Emergency Economic Stabilization Act, which authorized the Troubled Asset Relief Program (TARP), a $ 700 billion (then reduced to $ 430 billion) bailout package for the banking industry. The initial attempt to pass the bill failed in the House primarily because of Republican opposition. After a significant decline in the stock market and pressure from various sources, the second vote passed the bill in the House.
2010-present debate
Creating an American Job and Ending Offshoring Act
Senator Dick Durbin proposed a bill in 2010 called "Creating Jobs of America and Ending the Offshoring Act" which would reduce tax profits from relocating US factories abroad and limiting the ability to delay gains overseas. However, the bill stalled in the Senate mainly because of Republican opposition. This is supported by AFL-CIO but is opposed by the US Chamber of Commerce.
The Congressional Research Service summarizes the bill as follows: "Creating American Jobs and Ending the Offshoring Act - Changing the Internal Revenue Code into: (1) exempt from employment tax for a 24-month period employing an employee who substitutes other non- or permanent resident of the United States and who performs similar duties abroad, (2) deny tax deductions, reduction of losses, or tax credits for offshoring US employment transaction costs (defined as any transactions in which the taxpayer reduces or eliminates trade or business operations with respect to the beginning or extension of such trade or business outside the United States); and (3) eliminating any tax levy on income from a controlled foreign enterprise caused by property imported into the United States by that enterprise or its associated persons, except for property exported before being used substantially in the United States and for non-growing agricultural commodities of the United States of America in commercial quantities. "
American Employment Act
President Barack Obama proposed the American Jobs Act in September 2011, which includes various tax cuts and spending programs to stimulate job creation. The White House provides a fact sheet that summarizes the key provisions of the $ 447 billion bill. However, both the House and the Senate have passed legislation as of December 2012. President Obama declared in October 2011: "In the next few days, members of Congress must take a stand whether they believe we should put teachers, construction workers, police officers and firefighters fires back at work... They'll get a vote on whether they believe we should protect tax breaks for small business owners and middle-class Americans, or whether we should protect tax breaks for millionaires and billionaires. "
Fiscal cliff
During 2012, there was a significant debate about about $ 560 billion in tax increases and spending cuts scheduled for 2013, which will reduce the 2013 budget deficit roughly half. Critics argue that with a job crisis, such fiscal austerity is premature and misdirected. The Congressional Budget Office projects that such a sharp deficit reduction is likely to cause the US to enter recession in 2013, with the unemployment rate rising to 9% compared to about 8% in 2012, costing more than 1 million jobs. The fiscal cliff is partly addressed by the American Taxpayer Relief Act of 2012.
Tax policy
Individual income tax
It is unclear whether lowering the marginal income tax rate increases job growth, or whether a tax rate increase slows the creation of jobs. This is caused by many other variables that affect job creation. Economic theory suggests that (other things the same) tax cuts are a form of stimulus (they increase the budget deficit) and therefore create jobs, such as shopping. However, tax cuts as a rule have a smaller impact per additional dollar deficit than expenses, since some tax deductions can be saved rather than spent. Because income taxes are mainly paid by high-income taxpayers (the top 1% salary is roughly half of them) and these taxpayers tend to keep a higher portion of every additional dollar returned to them through tax cuts than lower income taxpayers , income tax deductions are less effective forms of stimulus rather than payroll tax deductions, infrastructure investments, and unemployment compensation.
One study shows that tax cuts do create job growth, especially tax cuts for low-income people. However, historical records show that changes in marginal income tax rates have little impact on job creation, economic growth or employment.
- During the 1970s, the marginal income tax rate was much higher than the subsequent period and the US created 19.6 million net new jobs.
- During the 1980s, marginal income tax rates were lowered and the US created 18.3 million net new jobs.
- During the 1990s, marginal income tax rates increased and the United States created 21.6 million net new jobs.
- From 2000 to 2010, the marginal income tax rate was lowered because Bush and US tax cuts did not create new clean jobs. The 7.5 million created 2000-2007 is a slow growth job with historical standards.
- President Obama raised the income tax rate above 1% through the end of part of the Bush tax cut in January 2013. He also raised the payroll tax above 5% as part of the Affordable Care Act at the time. Despite this increase in taxes, the average monthly job creation increased from 179,000 in 2012 to 192,000 in 2013 and 250,000 by 2014.
The Center on Budget and Policy Priorities (CBPP) wrote in March 2009: "Small business employment rose by an average of 2.3 per cent (756,000 jobs) per year during the Clinton years, when tax rates for high-income reporters were set very similar for people to be recovered under President Obama's budget.But during the Bush years, when rates were lower, employment rose by only 1.0 percent (367,000 jobs). "CBPP reported in September 2011 that jobs and GDP grew faster in the seven-year period after President Clinton's income tax rate increased in 1993, than the same period after the 2001 Bush tax cuts.
Corporate income tax
Conservatives usually argue to lower US tax rates, arguing that it will encourage companies to hire more workers. The liberals have proposed legislation to impose taxes on the companies abroad and to limit corporate taxes.
US corporate tax returns are at record levels during 2012 while corporate tax revenues are well below their historical average of GDP. For example, US corporate earnings after taxes are at record levels during the third quarter of 2012, at an annual rate of $ 1.75 trillion. US companies pay about 1.2% of GDP in taxes during 2011. This is below the 2.7% GDP rate in 2007 before the crisis and below the 1.8% historical average for the period 1990-2011. In comparing corporate taxes, the Congressional Budget Office found in 2005 that the highest tax rates were the third highest among OECD countries behind Japan and Germany. However, the US ranks 27th lowest of 30 OECD countries in corporate tax collection relative to GDP, at 1.8% vs. 2.5% on average. Solution
to create more jobs in the U.S.
Various options for creating employment exist, but these are highly debated and often have sacrifices in terms of additional government debt, adverse environmental impacts, and an impact on corporate profitability. Examples include infrastructure investment, tax reform, reduced health care costs, energy policy and carbon price certainty, reduced costs for hiring employees, education and training, deregulation, and trade policy. Author Bittle & amp; The Johnson of Public Agenda explains the pros and cons of 14 work creation arguments that are often discussed, some of which are summarized below by topic. This is hotly debated by experts from across the political spectrum.
Infrastructure investment
Many experts are advocating infrastructure investments, such as building roads and bridges and improving power grids. Such investments have historically created or maintained millions of jobs, offsetting the country's deficit and the higher federal budget. After the 2008-2009 recession, there are more than 2 million residential construction workers working. The American Society of Civil Engineers rated the US infrastructure "D" on their scorecard for 2013, identifying about $ 3.6 trillion in investment ideas by 2020.
The CBO estimates in November 2011 that increased investment in infrastructure will create between 1 and 6 jobs per $ 1 million invested; in other words, a $ 100 billion investment will generate between 100,000 and 600,000 additional jobs. President Obama proposed the US Employment Act in 2011, which included infrastructure investment and tax reductions offset by higher taxes on high-income. However, it did not receive enough support in the Senate to receive votes on the floor. During late 2015, the House and Senate, in rare bipartisan form, passed the largest infrastructure package in a decade, costing $ 305 billion over five years, less than $ 478 billion in Obama's initial request. He signed the US Surface Transport Act which amends to become law by December 2015.
Tax policy
Lowering labor costs also encourages employers to hire more. This can be done through reducing existing Social Security or Medicare payment taxes or with special tax incentives to hire additional workers. CBO estimates in 2011 that reducing employer salary taxes (especially if limited to companies that increase their salaries), increasing aid to the unemployed, and providing a refundable additional tax credit to low-income households, will result in more jobs per dollar investment rather than infrastructure.
President Obama reduced the Social Security salary tax on workers during the 2011-2012 period, which added about $ 100 billion to the deficit while leaving this fund with consumers to spend. U.S. corporate tax rate is one of the highest in the world, although US companies pay among the lowest amount relative to GDP due to loopholes. Reducing tariffs and eliminating loopholes can make US businesses more competitive, but can also add deficits. The Center for Tax Policy estimates for 2012 that reducing corporate tax rates from 35% to 20% will add $ 1 trillion to debt over a decade, for example.
Lower health care costs
Businesses are faced with paying significant and increased health care costs from their employees. Many other countries do not burden businesses, but tax workers pay the government for their health care. This significantly reduces the cost of hiring and retaining labor.
Energy policy and carbon price certainty
Studies put environmental regulation costs in the thousands of dollars per employee. America is divided on whether protecting the environment or economic growth is a higher priority. Rules that will add to oil and coal costs may slow the economy, although they will provide incentives for clean energy investments by addressing regulatory uncertainties about carbon prices.
President Obama advocated a series of clean energy policies during June 2013. These include: Reducing carbon pollution from power generation; Continue to expand the use of clean energy; raising fuel economy standards; and energy conservation through homes and businesses that are more energy efficient.
Work policy and minimum wage
Increasing the minimum wage will give households more money to spend, in an era with a record of corporate profits and the reluctance of companies to invest. Critics argue that raising labor costs hinders recruitment. During 2009, the minimum wage is $ 7.25 per hour, or $ 15,000 per year, below the poverty level for some families. The editorial board of the New York Times wrote in August 2013: "As measured by the federal minimum wage, currently $ 7.25 per hour, lower wage jobs in America are lower paid today than at any time in modern memory. If the minimum wage keeps pace with inflation or average wage over the last nearly 50 years, it will be about $ 10 per hour; if it keeps pace with the average growth in labor productivity, it will be around $ 17 per hour. "
President Obama advocated raising the minimum wage during February 2013: "The president called on Congress to raise the minimum wage from $ 7.25 to $ 9 gradually by the end of 2015 and index it into inflation thereafter, which would directly increase wages for 15 million workers and reduce poverty and inequality... Various economic studies show that raising the minimum wage moderately increases income and reduces poverty without compromising employment, in fact, prominent economists such as Lawrence Katz, Richard Freeman, and Laura Tyson and businesses like Costco, Wal-Mart and Stride Rite has supported the past increase to the minimum wage, in part because improving worker productivity and purchasing power for consumers will also help the economy as a whole. "
The Economist wrote in December 2013: "The minimum wage, provided it is not set too high, can increase the payment without adverse effects on the job... US federal minimum wage, 38% of the median income, is one of the richest in the world.Some studies do not find the danger to work from federal or state minimum wage, others see little, but no one finds any serious damage. "
The latest US minimum wage was raised to $ 7.25 per hour in July 2009. In December 2013, there were 21 states with minimum wages above the Federal minimum, with Washington State being the highest at $ 9.32. Ten countries index their minimum wage against inflation.
The CBO reported in February 2014 that raising the minimum wage to $ 10.10 per hour between 2014 and 2016 would reduce employment by some 500,000 jobs, while about 16.5 million workers would earn higher wages. A smaller increase to $ 9.00 per hour will reduce employment by 100,000, while about 7.6 million workers will have higher salaries.
Regulatory reform
Regulatory costs for starting a business and maintaining concerns are significant. Requiring laws to have sunset conditions (end dates) will help ensure only the updated useful rules. New business account for about one fifth of new jobs added. However, the number of new businesses starting every year dropped 17% after the recession. Magazine Inc. published 16 ideas to encourage new startups, including cutting bureaucracy, approving micro-loans, allowing more immigration, and addressing tax uncertainty.
Education policy
Reform of educational policy can make higher education more affordable and more aligned with work needs. Unemployment is much lower for those with college education. However, college is getting out of reach. Giving loans depends on a degree that is focused on a field with a workforce shortage such as healthcare and accounting will address structural labor imbalances (ie, skill incompatibility). Federal Reserve Chairman Janet Yellen said in 2014: "Public education funds are another way that can help governments offset the benefits that some households have in the resources available to children.One of the most important examples is early childhood education. Studies show that under-qualified pre-school children are more likely to graduate from high school and attend college and have jobs and have higher incomes, and they tend not to go to jail or receive public assistance. "
Income inequality
The income inequality, expressed by the stagnation of wages for middle- and low-income families coupled with a shift in income growth to the top, can have a negative impact on economic growth, as rich families tend to save more. Quality or job payments are important, not just creating more jobs. The movement of trade unions has declined significantly, one of the factors contributing to greater income inequality and off-shoring. Reinvigorating the workers' movement can help create higher paying jobs, shifting some of the economic pies back to workers from owners. However, by raising labor costs, employers may choose to hire fewer workers.
Trade policy
Creating a balanced playing field with trading partners can help create more jobs in US Wages and differences in living standards and currency manipulation can make "free trade" something other than "fair trade." Requiring countries to allow their currency to float freely in the international market will reduce a significant trade deficit, adding jobs in developed countries like the US and Western Europe.
Long-term unemployment
CBO reports several options to address long-term unemployment during February 2012. Two short-term options include policies to: 1) Reduce marginal costs for added employee business; and 2) Targeted tax policy for those most likely to spend additional income, especially those with low incomes. Over the long term, structural reforms such as programs to facilitate workers retraining or educational assistance will be helpful.
The Presidential Council on Employment and Competitiveness
President Obama established the Presidential Council on Employment and Competitiveness in 2009. The Board released a provisional report with a series of recommendations in October 2011. The report includes five key initiatives to improve employment while improving competitiveness:
- Measures to speed up investment into rich projects in infrastructure and energy development;
- Comprehensive drive to ignite entrepreneurship and accelerate the number and scale of young, small, and high-growth businesses that generate a huge new job division in America;
- A national investment initiative to increase employment creation investment in the United States, from global companies headquartered elsewhere and from multinational corporations based here;
- Ideas to simplify regulatory reviews and streamline project approval to speed jobs and growth; and,
- Steps to ensure that America has a talent in place to fill existing vacancies as well as to enhance job creation in the future.
Analytical perspective
Analyzing the real conditions of the US labor market is very complicated and a challenge for leading economists, who may come to different conclusions. For example, the main gauge, the unemployment rate, may fall (positive sign) while the labor force participation rate also decreases (negative sign). Furthermore, the reason people who leave the workforce may be unclear, like aging (more people are retiring) or because they are desperate and stop looking for work. The extent to which people do not fully utilize their skills is also difficult to determine when measuring the level of underemployment.
A rough comparison September 2014 (when the unemployment rate was 5.9%) compared to October 2009 (when the unemployment rate peaked at 10.0%) helped illustrate the analytical challenge. The civilian population increased by about 10 million during that time, with an employment rise of about 2 million and those not in the labor force increasing by about 8 million. However, the 2 million increase in the labor force represents the net of 8 million increase in those employed, partially offset by a 6 million drop in those unemployed. So is the main cause of the increase in unemployment rates due to: a) an increase in employment of 8 million; or b) an increase of those not in the labor force, also 8 million? Do 6 million fewer unemployed get jobs or leave the world of work?
Recovery of the labor market after the 2007-2009 recession
CBO issued a report in February 2014 analyzing the causes of a slow job market recovery after the 2007-2009 recession. CBO lists several major causes:
- "To a large extent, the slow pace of the labor market recovery reflects slow growth in demand for goods and services, and hence gross domestic product (GDP).The CBO estimates that GDP is 7 ½½ percent less than the potential (maximum sustainable) GDP at the end of the recession, by the end of 2013, less than half of that gap has been closed.As output grows very slowly, payrolls also increase slowly - and sluggishness in market jobs can be seen in high unemployment rates and of reductions in labor force participation rates reflect the gap between actual and potential GDP. "
- "Of the approximately 2 percentage point net increase in the unemployment rate between late 2007 and the end of 2013, about 1 percent is the result of a weakening cycle in demand for goods and services, and about 1 percentage point arises from structural factors, are especially faced by stigmatized workers and skill erosion that can come from long-term unemployment (together worth about half of the percentage point increase in unemployment rate) and a decrease in efficiency in which employers fill the void (perhaps at least in part due to incompatibility in skills and location , and also worth about half the percentage point increase in the unemployment rate). "
- "Of the approximately 3 percentage points net decrease in labor force participation rates between late 2007 and late 2013, about 1½ percentage points are the result of long-term trends (especially aging population), about 1 percentage point is the result of temporary weakness in prospects employment and wages, and about half of the percentage points due to unusual aspects of a slow recovery that causes workers to be discouraged and permanently cut off from the labor force. "
- "Employment at the end of 2013 is about 6 million jobs that are less than if the unemployment rate returns to pre-service level and if the level of participation increases to the level to be achieved without the current cycle weakness, these factors are roughly the same for deficiency. "
Comparison of job recovery throughout the recession and financial crisis
One method of analyzing the impact of a recession on employment is to measure the time period needed to return to the top of a job before a recession. With this measure, the 2008-2009 recession is much worse than the five other US recessions from 1970 to the present. By May 2013, employment in the US has reached 98% of the pre-recession peak after about 60 months. Recovery work after a combined recession and financial crisis tends to last longer than a typical recession. For example, Norway took 8.5 years to return to pre-recession peak work after the financial crisis of 1987 and take Sweden 17.8 years after the 1991 financial crisis. The US recovered much faster than either of these countries.
The ratio of full-time workers was 86.5% in January 1968 and reached a historical low of 79.9% in January 2010. There is a long-term trend of a gradual decline in the share of full-time workers since 1970, with a recession resulting in a decrease in the share of full-time labor is faster than the overall trend, with partial reversals during the recovery period. For example, as a result of the 2007-2009 recession, the ratio of full-time workers to total employment fell from 83.1% in December 2007 to a 79.9% trough in January 2010, before continuing to increase to 81.6% in April 2016. in other words, the share of part time spent on total employment increased from 16.9% in December 2007 to a peak of 20.1% in January 2010, before continuing to fall to 18.4% in April 2016.
There is a tendency for more workers in alternative work arrangements (part time or contract) than full time; the percentage of workers in the arrangement increased from 10.1% in 2005 to 15.8% by the end of 2015. This implies that all net employment growth in the US economy (9.1 million jobs between 2005 and 2015) occurred in alternative work arrangements, the number in traditional jobs declined slightly.
What is the level of job creation needed to lower the unemployment rate?
Estimates
Estimates vary for the amount of work that must be created to absorb the inflow of people into the workforce, to keep the unemployment rate afforded. This figure is strongly influenced by demographics and population growth. For example, economist Laura D'Andrea Tyson estimates this figure at 125,000 jobs per month during 2011.
Economist Paul Krugman estimates about 90,000 during 2012, also mention higher first. One method of calculating this figure follows, using data as of September 2012: US population 314,484,000 x 0.90% annual population growth x 63% population is working age x 63% labor force participation rate/12 months per year = 93,614 jobs/month. This is close to Krugman.
Economist Wells Fargo estimates the figure of about 150,000 in January 2013: "Over the past three months, labor force participation averaged 63.7 percent, equal to the average for 2012. If the level of participation remains stable, how much new work is needed to decrease Unemployment Rate The steady increase in employment in recent months shows a rough answer.The unemployment rate is 7.9 percent, 7.8 percent and 7.8 percent over the last three months, while labor participation
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