Economic Find: The Downs of Unemployment
Lately, we all have been too painfully aware of the importance of jobs to a healthy economy. As the chart below illustrates, historically, the unemployment rate is pretty volatile. Between 1950 and 1974, which was a period of steady economic growth, unemployment remained under 6%. In the 1970s and ’80s, it moved upward to almost 10%. In 2010, it was back up to 9.6%—around 14 million people.
And that doesn’t tell the whole story. The official unemployment rate is a disappointing measure. It doesn’t include people who are underemployed (working part-time but want to work more) and folks who have given up the job search altogether. Thus, the underemployment rate is an alternative measure that includes these folks. The underemployment rate for 2010? 16.7%. Yikes. (The average underemployment rate from 1980 to 2009 was 10.8%.)
Of course, jobs are the key to stimulating a sluggish economy and, given the dismal unemployment and underemployment rates we are seeing, are already becoming the central issue of the next Presidential election.
Based on the 2006 Field Guide to the US Economy. “The Downs of Unemployment.” 2.12: 32.
Updated and Revised by Member Economists Zhongjin Li and Sue Holmberg
Bureau of Labor Statistics. Series ID: LNS14000000.