Congressional Budget Office: Unemployment Rate is 15%
Surely to spark great debate on the highly political event of counting unemployed workers the typically regarded unbiased Congressional Budget Office or CBO announced that unemployment is persistently high and that it was about 15% for January 2012.
The official unemployment rate excludes those
individuals who would like to work but have not searched
for a job in the past four weeks as well as those who are
working part-time but would prefer full-time work; if
those people were counted among the unemployed, the
unemployment rate in January 2012 would have been
about 15 percent.
Here are some highlights from the report:
- Weak demand for goods and services, as a result of the recession and its aftermath, which results in weak
demand for workers; - Mismatches between would-be employers’ needs and
the skills or location of the unemployed; - Incentives from extensions of unemployment insurance
for people to stay in the labor force and continue
searching for work; and - The erosion of unemployed workers’ skills and the
belief held by some employers that people who have
been unemployed for a long time would be lowquality
workers (a phenomenon sometimes called
stigma).
The report basically states that by extending unemployment insurance programs workers keep looking for work, causing them to be counted as unemployed. Stop paying people to look for work either they will find work, or will no longer fit the definition of a person seeking work, and therefor not count in unemployment numbers.
Be sure to read how the unemployment rate works.
Read the full CBO report below.