Introduction to Sociology

Poverty and Unemployment in the United States

LEARNING OUTCOMES

• 
  Describe the relationship between poverty, work, and unemployment
  

Poverty in the United States

When people lose their jobs during a recession or in a changing job market, it takes longer to find a new one, if they can find one at all. Also, according to (Hicks 2013), those with higher human capital, or years of education, have a much more difficult time finding work. When people do find a job, it is often at a much lower wage or not full time. This can force people into poverty. In the United States, we tend to have what is called relative poverty, defined as being unable to live the lifestyle of the average person in your country. This must be contrasted with the absolute poverty that is frequently found in underdeveloped countries and defined as the inability, or near-inability, to afford basic necessities such as food (Byrns 2011). (You can review more about poverty and differences in terminology in the module on inequality.) ^[1]

TRY IT

19. 
    Compared to absolute poverty, a household living in ________ poverty might be able to afford food and clothing, but have trouble accessing other necessities, like adequate childcare for working mothers.
    
    1. 
       Working
       
    2. 
       Light
       
    3. 
       Underemployed
       
    4. 
       Relative
       

Check the answers at the end of this document

The Historical U.S. Unemployment Rate

Examining unemployment can help us better understand poverty in the United States. Let’s look at what the unemployment rate is really telling us. The unemployment rate is not the percentage of the total adult population without jobs, but rather the percentage of adults who are in the labor force but who do not have jobs. Even with the “out of the labor force” category, there are still some people that are mislabeled in the categorization of employed, unemployed, or out of the labor force. There are some people who have only part time or temporary jobs and who are looking for full time and permanent employment that are counted as employed, though they are not employed in the way they would like or need to be. Additionally, there are individuals who are underemployed. This includes those that are trained or skilled for one type or level of work who are working in a lower paying job or one that does not utilize their skills. For example, an individual with a college degree in finance who is working as a sales clerk would be considered underemployed. They are, however, also counted in the employed group. All of these individuals fall under the umbrella of the term “hidden unemployment.” Discouraged workers, those who have stopped looking for employment and, hence, are no longer counted in the unemployed also fall into this group.

Let’s look at how unemployment rates have changed over time and how various groups of people are affected by unemployment differently. Figure 1 shows the historical pattern of U.S. unemployment since 1948. While it clearly fluctuates over time, the unemployment rate seems to return to a range of 4% to 6%. There does not seem to be a long-term trend toward the rate moving generally higher or generally lower.