Causes of Unemployment and Poverty

Poverty & Unemployment

Poverty and unemployment are unquestionably two of the primary scourges that afflict the United States as well as other countries around the world. There are strong ways in which they correlate but they do run the gamut from recessions, offshoring of jobs, industry and employment shifts in the country and so forth. This brief report will explore the links that exist, what is being done about them, what is working and what is not. Even though a sliver of the population will always be unemployed and/or impoverished, it is no less painful to notice and watch when it happens.

The first point to be made about both poverty and unemployment is that there is always going to be at least some of both in the United States. However, the hope is that it is always temporary rather than ongoing and perpetual. Even so, there is a reason that a national unemployment rate of about five percent is considered "full employment" (Investopedia, 2016). The idea behind that is that there will always be a portion of the population that is out of work due to layoffs, being fired, people quitting for new jobs and so forth. As such, there are always people that are going to be looking for work. In general, the usual remedy to assist in dealing with that is unemployment insurance as provided by all of the states in the United States. However, those benefits are based on lookback periods and other measurements of income and work history. As such, someone with a sporadic work history or low wages is not going to get a large amount of benefit from unemployment benefits, if any at all. There are indeed other benefits that can bridge the gaps such as welfare (CBS, 2013).

Even with the above, there are people that, for whatever reason, perpetually reside and remain in poverty. There is a litany of reasons (or combination of reasons) for this. This includes having a felony record, being perceived as a "job-hopper," not having the proper high school and/or college education and having a skill that is not in demand. For example, there was a time that manufacturing was an extremely huge work sector in the United States. However, that has been a major and pivotal shift over the last generation or two towards a knowledge/service sector economy whereby people with advanced or vocational skills like lawyers, doctors and so forth do quite well and the rest of the populace has to scrum for the service jobs that typically pay less, if not much less. Manufacturing is still a huge industry in the United States but it is not what it was and much of what remains in the United States requires college or similar education due to it being high-tech or otherwise not something that a person off the street can learn easily or quickly. The simpler manufacturing that was the backbone of the blue collar workers of yesteryear has largely gone either south of the Border to Mexico or overseas to countries like China, Indonesia and Bangladesh, among others (Roberts, 2016).

Another factor that was touched upon before are recessions. To be sure, all levels of employment are affected to some degree when it comes to the economy shedding jobs in a prolific fashion. However, the lower-level and low-skill jobs are often the first to go and the last to come back. Indeed, there have to be managers and executives no matter what even if the numbers vary a little. However, if there is too little work for the people on the payroll, then the usual response is to reassign or lay off the excess. The Great Recession is called what it is for a reason. While the Great Recession did not have the huge unemployment rate that the Great Depression did in the 1940's, it was still rather bad. Indeed, the unemployment rate was north of ten percent at one point and the under-employed rate, meaning those that want a full-time job but settle for part-time in the interim, soared even higher. While the economy has recovered a lot since then, it has taken quite a while and there are many that say that the proverbial wounds from that recession are far from healed and that it is the unskilled and impoverished that bear the brunt. To wit, there have been many protests and laws bandied about that involve paying $15 an hour to fast food workers and a general talk about paying a "living wage" even if the prevailing rates in a given market allow for less (Clemens & Wither, 2014).