Wednesday, December 28, 2011

Education and unemployment

The Montana Legislative Branch posted a chart today showing the relationship between education and unemployment. Here it is:

Move your mouse over here!

No surprises here, really. At any time, a worker's risk of being unemployed is always higher, the lower his or her educational attainment. And less educated workers have seen a much bigger run-up in unemployment during the Great Recession. That goes part of the way in explaining the recent growth of poverty and inequality: less educated workers earn less when they do get jobs, and of course even less still when they can't find work.

The situation may be a little worse than it looks. Part of the reason that unemployment rates have  fallen in the past two years is that workers, when they can't find jobs, get discouraged and stop looking for work. At that point, in the official statistics, they are no longer included in the labor force or counted as unemployed, although they should be, and the official unemployment figure understates the true rate. In the past couple of years, labor force participation has declined at every educational level, but more so among less educated workers. So for those workers, there's somewhat more understatement of the true unemployment rate than there is for highly educated folks.

The bottom line for me in all this is that one of the ways we can get Montanans working again is to provide them with the skills and education they need to survive and maybe even get ahead in a bad labor market. Need I say that to do that we have to bite the bullet and fund education adequately at every level?

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