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Candidate’s session number: 001531-036

IB Economics HL Commentary #2
Section 2: Macroeconomics

Candidate’s Name: Nguyen Tra My


Candidate’s session number: 001531-036

Title of extract: “Teens and Blacks face highest unemployment”


Date of extract: January 7, 2011
Source of extract: CNN Money
Word Count of the commentary: 692 words
Total number of pages: 5 pages
Date of the commentary was written: January 11, 2011
Candidate’s session number: 001531-036

Teens and blacks face highest unemployment

NEW YORK (CNN Money) -- The employment situation has improved overall over the last year, but large swaths
of the U.S. population are lagging behind, including blacks, Hispanics and teenagers.

"Workers are on a jobs ladder. Where you are on that ladder depends on your education, your race, your gender,"
said William Rodgers, professor of public policy and chief economist at the Heldrich Center for Workforce
Development at Rutgers University.

The overall unemployment rate dipped to 9.4% in December 2010, compared to the year-ago rate of 9.9%, the U.S.
Department of Labor reported on Friday.
The employment situation for women improved only slightly over the last year, but their total unemployment rate
remains lower than men's. Men made a much more impressive recovery, closing some of the gap.

The unemployment rate for adult men dropped to 9.4% during 2010, down from 10.2% in December 2009. The
unemployment rate for adult women was nearly unchanged during the same period, showing only the slightest
improvement from 8.2% to 8.1%.

That's a consequence of what Rodgers termed a "mancession," with male-centric industries like construction and
manufacturing suffering the most during the recession. Women are heavily concentrated in industries like healthcare
and education, which grew.

Teenagers continue to suffer the highest unemployment rate, topping 25%. Younger workers are typically the least
equipped to compete in the job market, because they generally have the lowest skill and education levels.
Among adults, blacks face the highest levels of unemployment: 15.8% in December 2010, down only slightly from a
year ago. That compares to a 13% unemployment rate for Hispanics, 8.5% for whites and 7.2% for Asians.

Economists say much of the disparity can be traced to differing education levels.

"Asians are the most educated, so when you have the largest pool of workers, employers are going to pick the most
qualified," said Alicia Robb, research associate in economics at the University of California in Santa Cruz and a
senior research fellow at the Kauffman Foundation. "A lot of it is just coming down to the experience and education
of workers. Since blacks and Hispanics have lower levels of both, they're the last to be hired."

But that's not the whole story. Rodgers said that minorities tend not to live where job growth is occurring.

"Many minorities, particularly the less educated and less skilled, are concentrated in urban areas, yet much of the job
creation over the past decade has been in suburbs," he said.

The problem of racial disparity and unemployment tends to feed itself. Unemployed minorities face greater
challenges in developing work experience and networking with contacts, Rodgers said. This means they're often "the
first out and last in" during times of recession.

Also, blacks are still being held back by discrimination, economists say.

"Study after study shows that the white college graduate is more likely to get the job, even if they have exactly the
same resume as the black applicant," said Rob Fairlie, professor of economics at the University of California in
Santa Cruz and a research affiliate at the National Poverty Center. "The only difference is the race."

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Candidate’s session number: 001531-036

By Aaron Smith, staff writer January 7, 2011: 2:48 PM ET

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Candidate’s session number: 001531-036

COMMENTARY #2

The article discusses the problem of sharply increasing unemployment rate in


America, especially for teenagers and the blacks. According to the International Labor
Organization, unemployment is “people of working age who are without work,
available for work and actively seeking employment”. The unemployment rate is
defined as the percentage number of people who are unemployed considering the total
labor force.

The situation represented through the statistics and the article is the
improvement of the unemployment rate during the period December 2009 – December
2010. This is shown through the diagram below, where we can see that the
unemployment is reduced (blue) as the aggregate supply of labor force shifts inwards.

AS2 (2010) AS (2009)


Real
wage
Unemployment

Improved
Unemployment
(2010)

AD

0
Number of workers

The improvement of the employment situation in America was indicated by an


overall drop of unemployment rate from 9.9% in December 2009 down to 9.4% in
December 2010. There are number of factors that led to this dip. Firstly, gender
disparity should be considered as some industries where women hold the main labor
force have grown, like healthcare or education. The unemployment rate of women had
a very slight drop of 0.1% (8.2% - 8.1%). Meanwhile, there was a great recovery of
male workers, whose unemployment rate dipped for 0.8% (10.2% - 9.4%). Many
reasons stand behind this, such as differences in education, discrimination by
employers, attitudes for different types of work, and many other social factors.

The second but the main issue mentioned in the article was that the teenagers
and the blacks are suffering the highest unemployment rate, with teens reaching 25.4%
and the blacks 15.8%. This seems to be quite logical because the teenagers who are

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Candidate’s session number: 001531-036

seeking a job range from 16 to 19 years old, and most of them are not educated and
experienced enough to take over any profession in comparison to adults. On the other
hand, most of today’s teenagers are focusing on their studies at this stage and don’t
look for a job (they are considered out of the “pool” of unemployment). Blacks
(estimated to be all adults) are mainly unemployed because of discrimination reasons.
Today’s teenagers who no longer study mainly seek for jobs like office assistants,
restaurant waiters/waitresses, virtual designers, etc. But whatever job they choose, their
qualifications have rarely been trained and tested enough, so lack of skills and
experienced abilities makes the unemployment rate of teenagers the highest.

As to the most effective solutions for this, first of all, the educational system for
future job qualifications should be expanded and promoted to a greater number of
unemployed teenagers. Moreover, education system that trains people to be more
flexible in adapting rapid changes of economic conditions together with training
programmes which can provide unemployed people with necessary skills for available
jobs in a short time need to be more developed. Besides, as students are not listed as the
unemployed, the teenager’s unemployment rate can be reduced by encouraging
teenagers to go back into education. By this, they will be much more qualified for
future jobs.

According to Alicia Robb, "Asians are the most educated, so when you have the
largest pool of workers, employers are going to pick the most qualified". This can
explain why the unemployment rate of Asians is not only the lowest, but also has
dropped the most from December 2009 to December 2010 (from 8.4% to 7.2%).
Recently, many Asians, for instance: Vietnamese and Chinese, have emigrated to
America. It is believed that Asian labor force is cheaper than others. In addition, they
are often well-qualified or have a lot of experiences with a particular job. However,
relating to the past, due to the Vietnamese immigration into America, now there are a
lot of elder Vietnamese citizens in America who are normally employed thanks to their
hard-working characteristic and flexible adaptation. The later generation of these
Asians (20 – 30 years old) are thus already qualified enough due to the development in
America after 1980s and most of them are employed in good companies and are very
well paid now. The young generation of Asians, which are contributed to the teenagers
are now concentrating on education in America and most of them would go back to
their countries after graduating.