Ever wonder how a couple hundred thousand jobs can be added in a quarter and somehow the unemployment rate still goes up? Well, the reason behind this can be found in the statistic itself.
The national unemployment rate is based on the number of adults who want to work but can't find employment, they are therefore classified as "unemployed." The number of people who don't have jobs and are not looking for work are not counted in this figure.
So when the economy adds jobs and unemployment rises, it is because the people who are not looking for work notice that jobs are available and begin looking for work, thus adding themselves to the number of people in search of a job.
Think about it, that really means the unemployment rate is a lot higher.
Here are three current explanations as to why the United States is not generating enough jobs:
From Salon.com: "Businesses are reluctant to spend more and create more jobs because there aren’t enough consumers out there able and willing to buy what businesses have to sell."
From The New York Times: "Workers are getting more expensive while equipment is getting cheaper, and the combination is encouraging companies to spend on machines rather than people."
From The Atlantic: "Some economists chalk up the jobless recovery to a demand shortfall and end the discussion there. But there's something else happening. It's the new, relentless pursuit of efficiency."
There you have it, machines are cheap right now and humans are an expensive liability. So if you listen to an economist, you should invest in machines because they're efficient and don't come with all the baggage stupid humans do.
I guess I'm a people person. I'd rather surround myself with cognitive, passionate folks. I think it would do wonders for the economy...that is until machines learn how to repair themselves, then I'm selling out.
Paul Hill, Ph.D.
I design, plan, and evaluate economic development programs for Utah State University.
Search this site: