The national unemployment rate fell to 4.4 percent in October the lowest level of unemployment since May 2001. This is a sign of unexpected strength in the job market. [The unemployment rate is based on a survey of households, rather than the survey of employers used to calculate the payroll number. Unemployment does not include full-time students, the retired, children, or those not actively looking for a paying job.] The unemployment level is defined as the labor force minus the number of people currently employed. The unemployment rate is defined as the level of unemployment divided by the labor force. The employment rate is defined as the number of people currently employed divided by the adult population (or by the population of working age). The main causes for unemployment are capitalism, government and debate on unemployment. There are seven types of unemployment: Cyclical (Demand deficient unemployment) unemployment, when there is not enough aggregate demand for the labor. Frictional, when moving from one job to another, the unemployment temporarily experienced when looking for a new job. Structural, experienced when the structure of an industry or skill demands changes. Technological, caused by the replacement of workers by machines or other advanced technology. Classical (real-wage), when real wage for a job are set above the market-clearing level. Marxian, when unemployment is needed to motivate workers to work hard and to keep wages down, to preserve profitability. Seasonal, when an industry only is in demand certain times. The article I am reporting on is “Jobless Rate Hits 5-Year Low” (New York Times). This article raises the point that the labor market for America is continuing to improve with job growth advancing in recent months and the unemployment rate falling last month to the lowest level in years (The unemployment figures indicate how many are not working for pay but seeking employment for pay. It is only indirectly connected with the number of people who are actually not working at all or working without pay.) This has a lot to do with the increase in jobs last month. Employers added over 90,000 jobs last month. The article states that along with employers added more people to their payrolls, paychecks are starting to improve as well. This comes just four days before the midterm elections. This article states that these new numbers will add fuel to the political debate between the democrats and the republicans. The republicans quickly take credit for the dropping of the unemployment rate claiming that the low unemployment rate is evidence of the tax cuts and that the tax cuts have stimulated growth. They also said that if the Democrats takeover it would hurt the economy and undo all that they have done. The Democrats thinks that last months numbers have nothing to do with the tax cut. My thought on the slowly decreasing rate of unemployment is that hopeful America can keep it up, if we don’t it could cost us. Some of the likely costs of unemployment for society include increased poverty, crime, political instability, mental health problems, and diminished issue in economics. A low rate of unemployment usually helps prevent mass poverty and violence.
Jobless Rate Hits 5-Year Low. 4 Nov. 2006. New York Times. 4 Nov. 2006 <http://www.nytimes.com/2006/11/04/business/04job.html?pagewanted=1&n=Top%2fReference%2fTimes%20Topics%2fSubjects%2fU%2fUnemployment&_r=1>.