The Damaging Cycle of Depressed Wages
Everyone seems to focus on unemployment, but there is more to consider than just whether one has a job or doesn't. There is another concern: what happens when the unemployed, particularly those who have been without work for some time, do get jobs?
Regaining employment is a good thing, of course, but one factor that seems to evade attention is the hit to earnings that these workers face, not just now, but well into the future. That can affect the economic growth potential of the country as a whole. The Dallas Fed noted that the long-term unemployed take an immediate hit, on average, of 30% to 40% of their previous earnings when they do take another job, and six years later, their earnings are reduced, on average, by 10% to 15%. Similarly, recent college graduates, should they not find a job right away, may find themselves earning 2.5% less than they otherwise would 15 years later....675 more words left in this article. To read them, just click below and try Real Money FREE for 14 days.
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