Question by Mark: Unemployment Numbers Question?
Was in class the other day and there was one of those “whose fault is is for the unemployment percentage in the US now? Dems, repubs, or business”…yeah “groundbreaking” discussion… anyway most people in the class who identified the problems of unemployment mainly on the business owners for outsourcing jobs
Now naturally i thought thats pretty far fetched cause if that was the case then why i dont hear about it ALLLL the time, i meant i have heard this idea but not as the MAIN reason or even a pretty strong reason to explain unemployment.. soo i did light research for about 10 mins (lol) and i found this article: http://www.economicpopulist.org/content/unemployment-96-september-2010
it basically explain into detail about the unemployment numbers released today, basically towards the end of it, it shows the job sectors and the percentage each one attributes to the 9.6% unemployment heres the list:
* Financial: 6.3%
* Information: 10.8%
* Construction: 17.2%
* Manufacturing: 9.6%
* Mining & Gas, Oil: 8.2%
* Health and Education: 6.3%
* Leisure and Hospitality: 11.4%
* Professional & Business Services: 9.9%
* Retail, Wholesale Trade: 9.6%
* Government: 5.0%
* Agricultural: 11.1%
* Self-employed, unpaid family: 5.6%
Of that list i see 3 job sectors that could have a strong case made for outsourcing the cause of the unemployment being the information, manufacturing, and Professional & Business Services.
if i do the numbers and use conventional wisdom, it points to say that 80.7% of the 9.6% unemployment rate is not due to outsourcing and that the outsourcing claim for unemployment is a bit overstated.
Basically my question after this long passage is am I wrong for thinking that outsourcing claim is not a big cause at all to this incredibly high unemployment rate? And if i am wrong for thinking outsourcing is a big cause for the unemployment can you explain to me why it is. because i cant find anything online to answer this
Thank you very much =)
Best answer:
Answer by JoiseyGurl
Idk.
Know better? Leave your own answer in the comments!
A factor that you may not be considering is the residual effect of losing those jobs overseas. For example, if you live in a town where there is a large manufacturing plant and no other major businesses, then if it closes shop to ship it overseas all the support functions in the town also go out of business. I am not sure to the effect this would have on your numbers but it is something to consider.
Outsourcing does not cause the majority of unemployment.
Private hiring is up while the public sector laid off tens of thousands in September.
That means President Obama shrank government last month. Will republicans give him his due, or will they claim credit for strangling state and county governments?
Are you better served by fewer people in your local governments, city, county and state? Do the businesses in your community outsource their labor, or do they hire locally?
People haven’t stopped procreating, so if government shrinks as population grows, what do you think will happen?
the current unemployment is mainly due to the recession and the housing bubble created by the mortgage crisis…
these sectors like construction and financial should recover as the storm from the bubble subsides and the markets correct themselves… may take another 2 years…
much of the rest of the list has also been impacted by this though, as if 17 percent of construction people are unemployed, that means they aren’t buying things… so less things need to be made and sold… thus less people are needed to make them, thus people are fired… and that shakes out through the whole economy…
in the end though, I suspect we’ll return to fairly low unemployment overall, as the construction and real estate markets stabilize and the spending returns…
but to the outsourcing… that’s often much more of a local issue… Detroit for example… it’s probably 50 percent of the unemployment issue there… that’s big… and that’s still up to 20 percent of the problem… and that’s a problem that’s PROBABLY NOT GOING AWAY… unlike the recession…
fuzzy math is conventional wisdom??
Interesting
You might want to add Mining, gas and oil and agriculture to your list and the consider a couple of other factors that you seem to have missed. The jobs in manufacturing are typically much higher paying than jobs in the service industry, so losing a manufacturing job is much more impactful than losing a service job. You are also ignoring the multiplier effect. Lose a manufacturing job you also lose jobs in many other fields as an employ loses his ability to purchase, so I would say, yes you are wrong in thinking outsourcing claim is not a big cause at all to this “incredibly high” unemployment rate.