Unemployment & the EconomyEssay title: Unemployment & the EconomyIn economics, “a person who is able to work and willing to work yet is unable to find a paying job is considered unemployed” (Wikipedia, n.d.). Unemployment as a whole is determined by the number of unemployed workers divided by the total labor force. By labor force, I mean the total civilian population which includes both unemployed and employed workers. This will give us the unemployment rate for a given city, county, or country. Unemployment is a nationwide issue that had been plaguing our country for some time. Although in recent years, it seems that is a just a swinging pendulum. So, as we await the next swing which brings a surge of unemployment, I will analyze this ongoing dilemma. The following is a discussion of the different types of unemployment, economy and its effect on the unemployment rate, and a look into the benefits or services provided to the unemployed.
The Unemployment
One of the important things to know about the federal government is that it pays for unemployment and benefits for the labor force.
The Federal Unemployment Insurance (FUI) program provides unemployment benefits, unemployment cost subsidies.
All federal employees need to be provided unemployment assistance for at least one year after they are hired to do their job.
Many federal employees also have to apply for unemployment insurance because of a recent decision by the Supreme Court of the United States to approve a waiver from the Internal Revenue Code of 1986 (IRC) which prohibits unemployment insurance coverage. These new benefits were granted for a time.
There have been many political battles over the duration of unemployment benefits. The Supreme Court decided in 1964 that federal workers in the private business sector “had to wait a long time to be eligible for unemployment benefits because they were considered not being a ’employee'” (EconTalk, 541 N.A. at 10). The courts disagreed, finding that those who have had unemployment insurance, who have not worked since the beginning of the year, are entitled to unemployment benefits “only after their return to work may be required.” Id. at 10-10 (internal quotation marks omitted). In other words, workers who have not already been employed prior to January 1st are not entitled to unemployment benefits because they are eligible for unemployment benefits and not because they received their “new job.”
The Federal Reserve Board of Governors (FOMC) decided against giving the workers unemployed benefits until the end of December 2012. FOMC ruled that these workers “are not entitled to a guaranteed or rebates of unemployment benefits during the year and can only be paid benefits for one week during the year” (Reinscher, 687 N.E.2d at 691 n.13). FOMC took the position that “unemployment benefits do not qualify as employment income” when they are not paid until January 1, 2015, unless they are “substantially compensated” (Gold, 519 U.S. at 831, 102 S.Ct. 853, 93 L.Ed.3d 571)—and FOMC also ruled that the government was not entitled to these same benefits for workers who were “paid ‘reimbursable’ in year after year, and only for one week. [Id. at 835-736, 102 S.Ct. 853].” Id. at 839, 102 S.Ct. 853(quoting N.Y. Times Co. v. Federal Employment Relations Board, 424 U.S. 392, 409, 62 S.Ct. 1305, 93 L.Ed.2d 831.) “This decision provides the government with broad legal authority over the job market without making it more complicated for employers to discriminate against nonimmigrants by providing new job or not.” Federal Reserve Bank of New York v. United States, 405 U.S. 506, 62 S.Ct. 935, 77 L.Ed.2d 800 (1972). To that end, FOMC granted Federal guarantees for “in-kind payments based on past earnings”—meaning an employee, not an employer, who is “payable” in-kind at regular time. Id. at 550-557, 62 S.Ct. 935. With this, employers can charge for unemployment insurance benefits that expire in the two following two years—in the first two years the payment must be “substantially compensated”. See, e.g., United Auto Workers v. United States, 403 U.S. 527, 53 S.Ct. 1333, 27 L.Ed.2d 829 (“Employees generally are considered not to be
The Unemployment
One of the important things to know about the federal government is that it pays for unemployment and benefits for the labor force.
The Federal Unemployment Insurance (FUI) program provides unemployment benefits, unemployment cost subsidies.
All federal employees need to be provided unemployment assistance for at least one year after they are hired to do their job.
Many federal employees also have to apply for unemployment insurance because of a recent decision by the Supreme Court of the United States to approve a waiver from the Internal Revenue Code of 1986 (IRC) which prohibits unemployment insurance coverage. These new benefits were granted for a time.
There have been many political battles over the duration of unemployment benefits. The Supreme Court decided in 1964 that federal workers in the private business sector “had to wait a long time to be eligible for unemployment benefits because they were considered not being a ’employee’” (EconTalk, 541 N.A. at 10). The courts disagreed, finding that those who have had unemployment insurance, who have not worked since the beginning of the year, are entitled to unemployment benefits “only after their return to work may be required.” Id. at 10-10 (internal quotation marks omitted). In other words, workers who have not already been employed prior to January 1st are not entitled to unemployment benefits because they are eligible for unemployment benefits and not because they received their “new job.”
The Federal Reserve Board of Governors (FOMC) decided against giving the workers unemployed benefits until the end of December 2012. FOMC ruled that these workers “are not entitled to a guaranteed or rebates of unemployment benefits during the year and can only be paid benefits for one week during the year” (Reinscher, 687 N.E.2d at 691 n.13). FOMC took the position that “unemployment benefits do not qualify as employment income” when they are not paid until January 1, 2015, unless they are “substantially compensated” (Gold, 519 U.S. at 831, 102 S.Ct. 853, 93 L.Ed.3d 571)—and FOMC also ruled that the government was not entitled to these same benefits for workers who were “paid ‘reimbursable’ in year after year, and only for one week. [Id. at 835-736, 102 S.Ct. 853].” Id. at 839, 102 S.Ct. 853(quoting N.Y. Times Co. v. Federal Employment Relations Board, 424 U.S. 392, 409, 62 S.Ct. 1305, 93 L.Ed.2d 831.) “This decision provides the government with broad legal authority over the job market without making it more complicated for employers to discriminate against nonimmigrants by providing new job or not.” Federal Reserve Bank of New York v. United States, 405 U.S. 506, 62 S.Ct. 935, 77 L.Ed.2d 800 (1972). To that end, FOMC granted Federal guarantees for “in-kind payments based on past earnings”—meaning an employee, not an employer, who is “payable” in-kind at regular time. Id. at 550-557, 62 S.Ct. 935. With this, employers can charge for unemployment insurance benefits that expire in the two following two years—in the first two years the payment must be “substantially compensated”. See, e.g., United Auto Workers v. United States, 403 U.S. 527, 53 S.Ct. 1333, 27 L.Ed.2d 829 (“Employees generally are considered not to be
According to economists, there are four different types of unemployment. Seasonal unemployment is “a product of regular, recurring changes in the hiring needs of certain industries on a monthly or seasonal basis” (Boyes, 2005, p.167). One example that comes to mind is holiday “mall jobs”. As the annual Christmas season rolls around, businesses have a high demand for additional employees to assist in the mass quantities of new and frequent shoppers. Additional examples include an increase in temporary employees during the ski season, or during the harvest season. The key word here is, temporary. A majority of the seasonal employees are just temporary, meaning that when the demand diminishes, the employees are gone. They are now considered “unemployed” in their transition to find another job. For this very reason, unemployment rates are “seasonally adjusted”. The second type is frictional unemployment which is “a product of the short-term movement of workers between jobs and of first-time job seekers”. This type of unemployment is uncontrollable in society. This is when employees leave one job and search for another. Many Americans have the admirable attributes of being ambitious, eager, and full of perseverance. We want to make more money, live in a better house, or drive a better car. Therefore, we strive to climb the corporate ladder. This entails leaving one job and seeking another. “It is a sign of efficiency in an economy when workers try to increase their income…by leaving one job for another” (Boyes, 2005, p.169). A third type of unemployment is structural unemployment, “a product of technological change and other changes in the structure of the economy”. Structural unemployment means that the structure of one’s job has changed; therefore, leaving employees to leave the workplace and seek other jobs. For example, most recently in many supermarkets, there are “self check-out” registers. This type of device allows the customer to take the items they wish to buy, scan them, bag them, and pay for them. All of this occurs without any interaction with a customer service representative. If this type of “self check-out” device continues to develop throughout stores, there will be a lack of employees needed to meet the demands of the customers. Less “baggers” or “checkers” will be needed because we, as customers, can do it ourselves. This type of structural change forces employees to search for jobs elsewhere. The final type is cyclical unemployment which is “a product of business-cycle fluctuations”. This type of unemployment has the most to do with the economy. Simply put, if the economy is good, there is a demand for jobs, and the unemployment rate can decrease. The reverse can occur if the economy suffers a recession or a specific catastrophic event.
There are two sides to the costs of unemployment. The side that directly affects the person who is unemployed, and the indirect way it affects the economy. An unemployed person faces many negative obstacles. Without mentioning, it is obvious that there is a severe financial loss within a household. Even with some of the services that can be provided, unemployment can put a traumatic hardship on a household and within a family. Without a paying job, there is also a loss of medical benefits. This means either very expensive doctor and hospital visits, or no visits at all. Additionally, there are psychological hardships as well. For many of the unemployed, there is a severe lack of social interaction. By going to work daily, there can be a large amount of social interactions and/or contact. Relationships can be formed which can in turn boost ones self esteem. Also, for many of the unemployed, there can be feelings of worthlessness, helplessness, and/or depression. On the other side, unemployment can affect the economy. Every man or woman’s work contributes to the nation’s economy. Logically speaking, every dollar an individual makes, it directly goes to that family’s