Wednesday, September 18, 2013

THE POOR AND UNEMPLOYED Number not seen since the Great Depression

The gap in employment rates between America's highest- and lowest-income families has reached its widest level since officials began tracking the data a decade ago, according to an analysis of government data conducted for The Associated Press.Rates of unemployment for the lowest-income families - those earning less than $20,000 - have topped 21 percent, nearly matching the rate for all workers during the 1930s Great Depression. U.S. households with income of more than $150,000 a year have an unemployment rate of 3.2 percent, whhich is considered full employment. However, middle-income workers are increasingly pushed into low-wage jobs. Many of them in turn are displacing lower-skilled, low-income workers, who become unemployed or are forced to work fewer hours. Based on employment-to-population ratios, which are seen as a reliable gauge of the labor market, the employment disparity between rich and poor households remains at the highest levels in more than a decade, the period for which comparable data are available. Last year the average length of unemployment for U.S. workers reached 39.5 weeks, the highest level since World War II. The duration of unemployment has since edged lower to 36.5 weeks based on data from January to July, still relatively high historically. Economists call this a "crowding out" in the labor market, a domino effect that pushes out lower-income workers, pushes median income downward and contributes to income inequality. Because many mid-skill jobs are being lost to globalization and automation, recent U.S. growth in low-wage jobs has not come fast enough to absorb displaced workers at the bottom.

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