AP: Unemployment hits unskilled labor the hardest.
The unemployment rate hit a near-record high of 10.2% in October. Unfortunately, no sector of the economy has been untouched by the loss of jobs over the past year. This severe unemployment is reaching all industries, age groups, and education levels. But while all types of workers have been hurt by the recession, some groups are hurt more than others.
As with most periods of unemployment, the least educated workers lose their jobs at a higher rate than better educated workers. The Labor Deparment's most recent report shows that the unemployment among high school dropouts rose to 15.5% in October, up from 9.3% in October 2008. The unemployment rate among college graduates actually declined last month. The unemployment rate among the well-educated was only 4.7% last month, which was an increase from 3.0% in October 2008.
Even small increases in education can help a worker in the labor force. A high school diploma greatly benefits a worker. Unemployment among high school graduates is only 11.2 %, a vast improvement over the 15.5 % for the high school dropouts. See the table below for the unemployment rates for workers wtih other levels of education.
The reasons for the different unemployment rates, economically speaking, are found within the dynamics of supply and demand in the labor market. College graduates are relatively scarce compared to workers of lesser education levels. A low supply of college graduates means that companies tend to lay them off a a slower rate. Their skills are generally harder to find in the labor market, making them harder to replace once the economy turns around.
The demand side of the labor market also works in favor of college graduates. Many jobs require a college degree or higher, such as jobs in accounting, finance, health care, and education. A registered nurses's position or a teacher's position, for example, cannot be filled with a high school drop out. Healthcare and education are two industries that are actually growing, not decreasing, during this recession. Demand remains relatively high for skilled workers in these industires. A high demand, coupled with a low supply, leads to not only higher salaries, but also higher levels of employment as well.
So one of the best things you can do to weather this economic downturn is to focus on what you have to offer an employer. Increasing the breadth of your skills, either through education or training, will help not only in this recession, but also once we recover from it.
|Education Level||Rate in Oct 2008||Rate in Oct 2009|
|Less than High School||9.3 %||15.5 %|
|H.S. Diploma||5.9 %||11.2 %|
|Some College||5.0 %||9.0%|
|College Degree or Higher||3.0 %||4.7 %|
Source: Bureau of Labor Statistics, November, 2009
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