How low can US jobless rate really fall?

[OhioChick]

9 Apr, 2012, 06.51PM IST, Reuters

NEW YORK/WASHINGTON: Gary Feeman has been searching for a job for 16 months. He's not ready to give up just yet, but the 60-year-old worries he is running out of options.

Feeman is among the more than 5 million Americans who have been out of work for more than six months and who represent the heart of the crisis in the labor market.

Their plight also poses a warning that U.S. unemployment may not drop back to its pre-recession levels and could be stuck higher than many policymakers expect.

Feeman, from Lancaster County, Pennsylvania, has sent out as many as 100 resumes. But the former maintenance director at a small amusement park in the area, has had only one interview in person. That was in January. "I have tried everything under the sun," he said. "The frustrating thing to me is that when you apply for a job, employers do not respond either way."

More: http://economictimes.indiatimes.com/news/international-business/how-low-can-us-jobless-rate-really-fall/articleshow/12597587.cms

[mactime]

1. I believe it all goes in cycles

I don't think 5% unemployment will be reached for a while but I see the situation slowly improving. I remember in 2006/7 how employers were complaining how many perks they had to provide to keep their employees. Hopefully we will get to that point again soon

[lastlib]

2. I hope it goes one person lower real soon! I need a job!

[AdHocSolver]

3. Employment will improve only when the manufacture of everyday goods is returned to the U.S.

So long as corporations are allowed to make extreme profits and avoid taxes by outsourcing jobs, especially manufacturing jobs, to low-wage countries such as China, employment opportunities in the U.S. will be marginal and improvement only temporary.

Importing just about everything we buy on credit is an absurd economic practice. At some point the world's economies have to collapse. Current trade practices are causing the unemployment problems and are contributing to the trade and government deficits.

The U.S. is also experiencing an accelerating inflation that is hidden by keeping interest rates artificially low to subsidize an increasing trade deficit.

The coming depression and its deflationary effects are going to wipe out middle class equity in people's homes and the stock market.

The one percent that controls the corporations that are "too big to fail" will be in good shape since they control trade and banking. The middle class will largely disappear.

With science, engineering, and manufacturing relocated to China and other low-wage countries, the one percent will be in good shape.

A growing middle class in China and elsewhere will supply the demand to keep the corporations operating and making profits. The U.S. middle class will no longer be needed. In fact, the middle class will become useless to the one percent.

The middle class could have saved the situation by refusing to buy imported merchandise from low-wage countries, and demanded that retailers provide American-made products for sale. Because cheap prices were the main criteria that most Americans used for deciding what to buy, and Americans willingly paid high prices for "designer labels" made cheaply in low-wage countries, the middle class is heavily responsible for the outsourcing of manufacturing jobs.

In order to solve a problem, one has to understand what is the problem. So far, only a very few people understand the economics of the situation. The situation is not really improving because just about everyone subscribes to the "bean counter" mentality. The "bean counter" mentality is precisely what brought us to this sorry state.