Last month Federal Reserve Chairman Ben Bernanke said U.S. unemployment could become entrenched and have a long-term impact on the economy. There’s certainly ample data to support that. In November, 41.9 percent of the unemployed had been out of work for 27 weeks or longer. Total unemployment for the month was 9.8 percent (15.1 million American workers), with unemployment significantly higher among certain groups and areas. This is in stark contrast to the days we now long for of “normal unemployment,” which meant 4.6 to 5 percent unemployed. When charting the last 40 years of new claims as a percent of continuing unemployment, the graph seems to indicate that, for most of that period, more and more time has been required to find employment. Looking at population growth versus employment, there’s a clear upward trend on population growth, a flatlining on workforce growth and a three-year decline in employment. Basically, jobs are not keeping pace with population growth. Here are the two charts from “Mish’s Global Economic Trend Analysis,” December 7, 2010, that illustrate the points in the above paragraph:
This data indicates two conflicting trends. One is the ongoing shedding of jobs due to offshoring to other countries. At the same time, due to mass unchecked illegal immigration and legal immigration, along with births to immigrants, we have a rapidly growing population. It was just reported that the U.S. continues to be the global destination for immigration. According to the report in the UK’s Guardian, we now have 43 million foreign nationals – more than any other country, with 1 million more arriving each year. The long-term and widening gap between the workforce and jobs means we can’t continue importing population if we hope to continue living in a stable society. The net effect of these two diverging trends is a larger and larger portion of the workforce that is unemployed or underemployed, placing ever increasing demands upon already shredded safety net programs. The government needs to take action to address and correct both of these trends if we don’t want to see the sort of social unrest that is happening in Europe take root here.