Unemployed / Underemployed

What is the unemployment rate? Most people would answer somewhere in the seven percent range. However, this number leaves out the discouraged worker, the underemployed (people who are working in a job less than their previous occupation) and the part-time work worker who did not choose to work part-time.

What if we add these categories in to the unemployment rate we get a vastly different number.

unemployed underemployed
From the St. Louis Federal Reserve

As you can see the number has remained stubbornly high above 13 percent and the twenty year average.

I believe this is why the Federal Reserve has brought up their dual mandate, inflation and full employment. However, one could argue that the unprecedented stimulus of the Central Bank has done little to move the needle in this metric. If cheap money and record low interest create jobs we would have been at full employment months ago.

In order for the unemployment number to go down we have to create an environment that rewards risk-takers versus punishing them. The current tax structure is inefficient and punishes success. It also creates a high barrier of entry for entrepreneurs. A strategic overhaul of the tax system that encourages savings and business formation would improve the unemployment numbers.

In addition, business owners frequently complain that they cannot find qualified workers. If this isn’t addressed from a societal basis we will end up with a segment of the population that is chronically unemployed. This leads to societal problems that we should fight at all cost.

The American people are hardworking and industrious. If we encourage these attributes at the Federal level our unemployment problem will be solved.



The opinions voiced in this material are for general information only and are not intended to provide specific advice or recommendations for any individual.  To determine which investment(s) may be appropriate for you, consult your financial advisor prior to investing.


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