Introduction to Sociology

Thinking about Unemployment

We cannot rely on unemployment statistics to provide a clear picture of total unemployment in the United States. First, unemployment statistics do not take into account underemployment, a state in which a person accepts a lower paying, lower status job than their education and experience qualifies them to perform. Second, unemployment statistics only count those:

1. 
   who are actively looking for work
   
2. 
   who have not earned income from a job in the past four weeks
   
3. 
   who are ready, willing, and able to work
   

The unemployment statistics provided by the U.S. government are rarely accurate, because many of the unemployed become discouraged and stop looking for work. Not only that, but these statistics undercount the youngest and oldest workers, the chronically unemployed (e.g., homeless), and seasonal and migrant workers.

A certain amount of unemployment is a direct result of the relative inflexibility of the labor market, considered structural unemployment, which describes when there is a societal level of disjuncture between people seeking jobs and the available jobs. This mismatch can be geographic (they are hiring in California, but most unemployed live in Alabama), technological (skilled workers are replaced by machines, as in the auto industry), or can result from any sudden change in the types of jobs people are seeking versus the types of companies that are hiring.

Because of the high standard of living in the United States, many people are working at full-time jobs but are still poor by the standards of relative poverty. They are the working poor. The United States has a higher percentage of working poor than many other developed countries (Brady, Fullerton and Cross 2010). In terms of employment, the Bureau of Labor Statistics defines the working poor as those who have spent at least 27 weeks working or looking for work, and yet remain below the poverty line. Many of the facts about the working poor are as expected: Those who work only part time are more likely to be classified as working poor than those with full-time employment; higher levels of education lead to less likelihood of being among the working poor; gender and race impact ones odds of being in this group and those with children under 18 are four times more likely than those without children to fall into this category. In 2016, the working poor rate, which is the ratio of the working poor to all individuals in the labor force for at least 27 weeks or more, was 4.9 percent, or 7.6 million Americans, down from 2015. In that same year women were more likely than men to be among the working poor. The rate for blacks and Hispanics were 8.7 percent and 8.5 percent, respectively, compared with 4.3 percent for whites and 3.5 percent for Asians (U.S. Bureau of Labor Statistics 2016).

Figure 4. Women are disproportionately represented in the working-poor, especially black and Hispanic women.

Age also plays a factor in being classified as the working poor. The working-poor rate of employed youths 20 to 24 years old was 8.7 percent in 2016, considerably higher than the rates for workers ages 35 to 44 (5.6 percent) and 55 to 64 (2.8 percent). Workers age 65 and older had a working-poor rate of 1.5 percent. (Chart 1) ^[2]

Figure 5. While poverty rates among the elderly have fallen, a larger number of children and working-age adults are living in poverty. (Graph courtesy of the U.S. Census Bureau/Carmen DeNavas-Walt and Bernadette D. Proctor, Income and Poverty in the United States 2010)