Unemployment Hurts Everyone

Posted by in Career Advice •


Being out of work, especially for an extended period of time, is extremely painful—not to mention financially disastrous. However, unemployment hurts more than just the person who is out of work. In fact, when lots of people are without work, it has a huge negative impact on everyone.

When people mention the current unemployment rate, which is 7.8%, it's easy to assume that the rate means that the remaining 92.2% of the population is working. Of course, the official unemployment rate is a number that is typically lower than the actual number of people who want jobs but don't have them. According to the BLS, "Persons are classified as unemployed if they do not have a job, have actively looked for work in the prior 4 weeks, and are currently available for work." This means that people who are out of work but haven't actually applied for a job in the past 4 weeks aren't counted. This includes people who are in job training programs or who have become discouraged about finding a job.

It's easy to see that the number of people who are out of work is going to be significantly higher than the official unemployment rate. Even if it wasn't, having a high number of unemployed people is bad for the overall economy and especially bad for people who are currently in the workforce. A recent article at Salon really brought the matter home for me and made me think about how the labor market is affected when so many people aren't working.

When there is a large pool of available workers, employers aren't under as much pressure to treat their current employees well. In fact, simply knowing that their employees would have a difficult time finding other work means that they can lower salaries across the board and demand a higher degree of productivity.

Already, we can see this happening in offices across the country. Employees are being required to work longer and harder without being given raises and bonuses. As employers strive to cut expenses, their current staff resigns itself to do whatever is required to hang on to their jobs.

As the unemployment rate goes down, employers will have to make some drastic changes to keep the workers they have and recruit new ones. As it is, many people accept jobs that don't pay as well as their previous positions, because something is better than nothing.

Have you seen this happening? Do you think that employers are taking advantage of their employees because they know that they can? Please share your thoughts in the comments.

Photo Credit: MorgueFile
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  • Melissa Kennedy
    Melissa Kennedy •
    @Glenn - I couldn't agree more. It's sad when the richest family in America (which is also the largest employer) runs a company where most of the employees are on public assistance.
  • Glenn M
    Glenn M •
    @Mellisa, The solution is that profits should not be the utmost priority. Having a business where everyone is managing their lives and is able to survive without government help is the priority. My last three jobs were contract and its not often that I get hired direct anymore.  Pleasing stockholders is not the only purpose of having a company.  Socialism aside, we need to be more about cooperation and staying afloat as tribes, communities, clans, regions, and not as how rich can the CEO and his group become.  I took my 401K out of the mutual fund market and into a blank money market. I don't believe the stock market anymore and definitely am not willing to get robbed again. And yes, I too am in between jobs now and find the employers seem to want high skilled guys that can "do it all".  There is scarce mentoring going on and knowledge being passed on to the new workers on the job. The pressure and weight in my last jobs were driving all the workers to rants and complaints.  Another common mistake is a company accepting more contracts than they can complete with their presently small workforce. Quality goes down when you accept more than you can handle and no-one is happy.  So there is my point that a company's sole purpose should not be to make profits, but to get by even or just a little above that.
  • Melissa Kennedy
    Melissa Kennedy •
    Thanks for the great comments. @Samuel, I'm sorry that you're going through this. It really sucks and I know, because I've been there. Don't be ashamed of getting food stamps. It helps feed your family and you've paid taxes all of your life. That's what the program was created for, to help people through a tough time. Trust me that you aren't alone. So many people are finding that all of their hard work has been for nothing. Don't let shame and depression work it's way in. Even if you can't find a job, find a way to help others who are in your same situation. Use your excellent people skills and salesmanship to volunteer, even if you're just helping people proofread their resume. It will make you feel better, give you a purpose and you'll get to meet people who could give you ideas, inspiration and job leads. The world needs more people who understand that the poor, (both the working and the unemployed poor) aren't losers who think that they are entitled to things, but are real, hard working people who had a string of bad luck, made a couple bad decisions or got laid off. People like you can help others without robbing them of their dignity.@Suzan, you're right, the system is rigged and independent contractors are often used by companies to avoid having to take care of employees. Without unions or other workplace advocates, they can get away with it.@Rita, income inequality is growing and it's a major issue right now. Change is coming, just look at the Occupy protests of last year. We need more people who see that it's not right to rob people of their ability to earn a living just so that some rich guy's stock will go up a point or two.@Robin, it is shameful when a company takes advantage of its employees. With large corporations, the people who make the decisions don't even know the employees. It lessens their guilt and makes it seem like a painless process.
  • Samuel M
    Samuel M •
    Of course companies are taking advantage of their employees.  I am a Sales Manager that has been out of work for several months now.  The part that amazes me is that a I have a documented track record for success.  I spent my life fighting to be the best in my industry.  But in my area, companies are hiring for commission only positions now.  They know in this economy they can get away with it.  I recently sold a small company due to the loss of accounts (economy).  We are actually selling everything that took us years to obtain, just to remain afloat.  We used to be middle class and are now in the process of losing everything we own.  Our business, home, cars,  possessions, savings, everything.  To make matters worse, we have 5 children that depend on us.  And I pay child support for an 18 year old still.  I am back owed on that by 3 months and have a court date coming up.  So, I'll probably go to jail for not having the money, leaving all of my other kids to fend for themselves.  I do not qualify for Unemployment because I owned my own company, which I no longer have.  So, there is no money coming in at all.  I don't even have enough gas money to get to my next interview.  Oh, did I mention that my mother recently died and I haven't had the time to deal with that.  People have always said how hard I have worked my entire life to get ahead.  That is the promise we're told.  The American Dream.  And for working twice as hard as anyone else...  Where has it gotten me?  Exactly where I am today.  I was a poor kid that grew up in a trailer and worked hard my entire life.  Always doing the right thing, working against the odds.  Then, it is all stripped from you.  We do get food stamps...  But trust me when I say that I don't even want them.  I feel ashamed every time we use them.  I am broke, depressed, ashamed, worried, humiliated, angry and trying to grieve at the same time.We have a serious problem in this country that needs to be addressed.
  • Suzan F
    Suzan F •
    AMEN!!!!!!   I can also give you some other examples of how the books are cooked on unemployment.  Those who are self employed, such as independent contractors and consultants, do not usually have an employer sponsor paying into the unemployment insurance pool on their behalf, so when their work dries up, not only are they not eligible for unemployment benefits, but they do not show up in unemployment figures.  Those whose benefit eligibility has expired are dropped from the records as they are no longer bound to report their job search activity-relating to your point directly about those who haven't actively sought work for a period of 4 weeks.....these folks may be actively searching, but those efforts are not recorded, and hence the person is not counted in unemployment.  And the most insidious is the corporate takeover.   If company A buys company B, and then hires all the workers under company A's logo, company A gets credit for creating X number of new jobs, despite the fact that these are the same x number of people in the same cubicles, doing the same work, for the same pay as they were doing the day before....nothing has been lost, but nothing has really been created either in terms of putting more people to work, but yet statistically, it appears that there have been new jobs created which is subtracted from the shortfall of available jobs.  
  • wilbert thomas
    wilbert thomas •
    Please help me find a job
  • wilbert thomas
    wilbert thomas •
    I've been seeking employment for the last six months, without any success,to the  point of taking any type of employment to offset my desperation to earn a living
  • Rita B
    Rita B •
    Simply put unemployment hurts everyone. Whatever the reason for someone being unemployed,it affects everyone. And  YES, it is unfair for those who remain employed.  This is a form of slavery. It is not fair to disrespect those who are employed. And as the cliche goes the rich gets richer and the poor gets poorer.The question is how can this unfairness, and madness be put to a stop? It will take a desire for justice, fairness and caring for mankind that will end this cycle of civil destruction.
  • Robin M
    Robin M •
    Unemployment throws your whole life off. Shame on any employer who takes advantage of his leftover loyal staff.they made it through the cuts and are probably his best employees.i have seen this happen to my peers. No sense of fairness there.

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