Question

why is unemployment problematic as a measure of economic health

Answer 1

Solution:

In the past times unemployment rate was regarded as a good measure of the health of the economy. But over the past decade, the increasing growth of part-time employment indicates that the gauging of economy’s health requires much more than just taking the unemployment pulse rate.

The best measure of employment health is hours worked. Part-time employment means working for one hour a week to 34 hours, and full-time employment includes working for 35 hours and above. The number of hours worked not only shows the shift from full-time to part-time but also detect changes within each category.

There is also a strong connection between employment growth and the growth in hours worked.

The growth of hours worked at the moment is sinking below that of employment. This isn’t too bad if that means employers are either just for the time being reducing hours, or still hiring workers, but just for part-time until things become better. The fret is that the slowing hours worked growth is predicting future slowing employment growth.

The employment at the present is about part-time employment growth and its’s not only about that versus full-time work; it is about that it involves gender and age.

Women are more likely to be part-time workers (there are presently 2.6m women working part-time and only 1.2m men). The big development in the part-time employment in the past few years has been for men.

Now for a quarter of a century men shifting towards part-time work is the thing which has been happening.

80% of men in the prime working age in range of 25 to 64 years were working full-time in the year 1990. Just 3.8% of prime aged men were part-time workers.

Nowadays only fewer men in their prime working age are working full-time. Contrarily, there are now more prime-aged women working full-time and the peak has been stable now for nearly years.

The GFC of male full-time employment is shrinking, while part-time work has grown. But for the women, part-time work has grown while full-time employment has remained stable.

Men working full-time still command the labor market but the rise and fall in part-time employment is also about age.

Over the past years, the main growth in employment numbers is full-time employment of prime aged workers – given they are the largest section of the population. But while full-time work has disappeared for the youth, older workers have been staying in the workforce in much larger numbers – both in full-time and very much so in part-time.

Now part-time work often gets a bad blow, when in reality it is not usually bad – it can be a first beginning for many workers and can be necessary when raising a child. For those over the age of 65, the purpose for work are less obvious – either out of need, or because better health allows more people to stay working.

Since 2004 there has been a constant increase in the numbers of older workers.

But with the increase in part-time employment, an increase in underemployment has also followed.