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Personal Finance Round-Up: Facing Unemployment

By Money Crashers

unemployedIt’s a statistic you can’t avoid: The American economy’s streak of months with a jobless rate hovering near 8%. The Republicans are using it as campaign fodder against President Obama’s reelection bid, while the Democrats are trying to suggest it’s not their policies, but rather the system that’s to blame.

There may be some basis to that claim, according to some economists. In an August 2, 2012 piece on CNBC, Jean Chua examines the “new normal” when it comes to our nation’s unemployment rate:

“We should have realized that the unemployment rate is simply not going to go back where it was and we should start realizing that there is a new normal and the real unemployment rate in the United States will be 6% to 7%, where the recovery is in full steam, rather than 4%.” -Michael Yoshikami, Founder and CEO of Destination Wealth Management

In the past, America’s so-called “structural” unemployment rate – the inherent “baseline” for unemployment in our economic system, caused by a mismatch between the jobs available and the skills of the workforce – had hovered around 4% to 5%, making the projected climb to 6% to 7% significant. What’s to blame for this increase?

According to Peter Morici’s column on The Street, it’s this:

“Gains in manufacturing production have not instigated stronger improvements in employment, largely because much of the growth is focused in high-value activity.”

What does this mean for all of us? A higher jobless rate may be here to stay, until the labor force realigns its skills to meet the demands of a more service-based economy.

The idea of high unemployment is the focus of Mish’s recent post, Who Is Not in the Labor Force? Who Is Counted as Unemployed? over at Mish’s Global Economic Trend Analysis. Mish tackles a question from one of his readers who wants answers to these questions. It’s easy to understand the confusion – even though we often hear statistics that report the unemployment rate, it isn’t always clear what this figure includes.

Here are some other posts about finding work – or finding your way out of work – that caught my eye:

Living on One Income: What to Do If Your Spouse Loses Their Job [Three Thrifty Guys]
“It can be pretty tough when you’re used to a set amount of income – and then it’s gone,” writes Aaron of his wife’s recent job loss. His advice of what to do next after experiencing job loss includes not only common sense ideas, but also some uplifting thoughts that can help you gain the inspiration needed to get through it.

Steps to Living on One Income (Steps 7-9) [The Centsible Life]
In part three of her series on how to transition from a multi-income to a single-income household, Kelly focuses not only on the short-term obstacles you must face after leaving your job, but on the long-term ones as well.

Still Not Working [48 Days]
What forces so many qualified job seekers out of the labor pool? Dan at 48 Days thinks he knows: “After searching the paper or the Internet and responding to 80 to 100 job postings, they become convinced no one is hiring anyway. They then move into the rationalization phase where they justify not looking because they are very busy just taking care of life issues.”

How Much Should You Have in Your Emergency Fund? [Faith and Finance]
If you’ve ever been out of work, you’ve probably had to draw on your emergency fund. But just how much do you really need? Kevin looks at different emergency fund scenarios, including various contingency plans and why your emergency fund should never be a static account.

Who’s Getting Hired in 2012? [Mango Grove]
I don’t know about you, but I love infographics, and the folks at Mango Grove have an excellent one. It looks at which states, cities, and specific industries have the best – and worst – job outlooks for the rest of the year.

Top 10 Risky But High-Paying Jobs in America [One Cent at a Time]
Shows like “Deadliest Catch” have glamorized crab fishing in Alaska, but did you know it’s one of the most dangerous jobs in America? With a fatality rate 80% higher than the average American worker, it’s hardly a dream job. Which other fields made SB’s list?

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  • 48DaysDan

    Great piece. There is definitely a “new normal” that we need to recognize. That’s not bad – just different. The work models are changing and providing opportunities that look different than in the past.

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