One of the most watched economic figures is the unemployment rate. Depending on whether it is going up or down and what party they belong to at the time, politicians love to use it in their speeches or hate the mention of it. They and their media counterparts (on both sides of the political spectrum) are very adept at using odious comparisons to manipulate public opinion.
Yet, the unemployment figure is only part of the picture. Even in an economy meltdown like the Great Depression, the unemployment was “only” 29%. Under normal conditions, the unemployment rate is below 7%. This seems to indicate that the vast majority of the population is employed. Also if the unemployment rate is low, most people should be happy, right? Well…
For a person who is evaluating the economy from a personal perspective, here is what they see:
- How much has my wages and salaries increased in the last year?
- How are my investments doing?
- How good is the job market in my industry? How is the industry doing in general?
- How happy am I at my current job? Does the economy allow me to easily move to another job?
- How do I see outsourcing (foreign and local) affecting my industry?
- Is my job secure?
Sometimes, even though the employment figures are good, many industries may be in a plateau where there is no growth and hence wages see little upward movement. For people working in those industries, they see little improvement in their personal finances and hence they may not agree with the perception that the economy is doing well.
Also even if an industry is increasing, sometimes it may only be the managers and upper-level workers who benefit, because the industry may be reducing human resources by outsourcing or investing in capital infrastructure. This keeps the workers on edge. In many cases, workers may not have the requisite training to easily switch to other jobs.
Finally, there are regional disparities. Some areas, especially in regions which concentrated in a particular industry, may have a higher level of unemployment. People those who are employed may have relatives or friends who are unemployed. The former set may not have good feelings about the economy even though they are themselves employed because of this connection.