The final results are in, and 2009 will go down in history for an unfortunate reason. From the midst of the Great Recession, unemployment climbed to almost historic levels before falling toward year end.
In January, the unemployment rate was 7.6% and climbed to 10% by December. The January to December average was an astounding 9.26%.
While this rate is extremely high, it is only the third highest annualized unemployment rate since the Bureau of Labor Statistics started tracking these statistics in 1948.
1982 still holds the record for the highest national average unemployment rate, at 9.71% over the calendar year. The following year was a close second, with the national unemployment rate averaging 9.6%.
Last month's 9.7% unemployment rate is the lowest it has been since August of 2009, but still significantly higher than the 7.6% rate that was posted in January of 2009. Despite the recent Bureau of Labor Statistics (BLS) report showing unemployment has declined somewhat, there is still concern that 2010 could replace 1982 at the top of the unemployment list. The Congressional Budget Office recently estimated that the average unemployment rate in 2010 will be 10.1%, followed by 9.5% in 2011.
A deeper look into the BLS report shows that:
The U-6 unemployment rate, which is a broader measure of labor underutilization in the United States, fell to 16.5% in January, down from 17.3% in December.
While the overall unemployment rate declined, the tight job market is still dramatically affecting younger, less-experienced workers. According to Reuters, low-income and minority youths are hardest hit by the current recession. These young people need part-time jobs to survive and to gain necessary experience at the onset of their career path.
Reuters reports that:
These jobless rates do not count teenagers who have simply stopped looking for jobs.
Overall, there are two primary reasons teenagers are having a harder time finding work. First, they are less experienced and less well-educated. With more people overall looking for jobs, many people are willing to work for less money and they are taking the jobs that teenagers would otherwise hold. Second, business owners are more likely to hire someone with more experience, more maturity and more time available to work.
The effects of joblessness go beyond not having any money. Young people are not gaining experience working and developing interpersonal skills, skills that can help them throughout their life times. It has also been proven that not having prior work experience during a person's teenage years can reduce their future wages significantly. A 2001 Employment Policies Institute study found that "a six-month unemployment spell can reduce future wages by 2.3 percent."
This discouraging reality is in spite of the federal stimulus package was enacted one year ago this month.
*NOTE: The Department of Labor has not released its local unemployment figures as of February 24, 2010. As soon as the data is available it will be posted on this website.