How many unemployed workers are there today? The unemployment rate in the US is roughly 6% as of February 2021. However, I'm hard pressed to find anywhere close to 6% of the people I know who are unemployed. If you listen to the media, you'd think the world was coming to an end again. But, if you look around, traffic is back and businesses are bustling again.
Off the top of my head, there are two acquaintances I know who aren't working. One guy is well-off and voluntarily quit his job last year to relocate back to his home country. The other guy got let go two years ago after a hedge fund he was working at blew up. He can find work if he wants, but he decided to travel the world for a couple years instead. Are they considered unemployed? Hard to say.
How many unemployed friends do you have right now? With 6% unemployment, there should logically be about 18 people I know out of 300 who are unemployed. If you believe the media's “underemployment” figure of ~10%, then roughly 30 people of the 300 should be underemployed or jobless.
I looked on Facebook and LinkedIn to dig a little deeper, and I found only three more people who are currently in transition. If you count the 2 above, which I don't because they can find work if they want to, the unemployment rate in my network is 1.7% (5 out of ~300). Is unemployment really that high? Maybe people who have internet connections are a protected group…
Unemployment Rate Disconnect
I want to try and understand this disconnect in the unemployment figures. Perhaps the disconnect has something to do with living in San Francisco and knowing many people with Masters and Doctorate degrees.
But, as I look once again at my online connections, many are from around the country and the world. In addition, many work in various fields, and just have their undergraduate degrees. Perhaps we tend to hang out with other people who are more similar to ourselves? In other words, if you are employed, you tend to just hang out with other employed people.
Whereas if you are unemployed, you can't hang out with the employed during the day because they are working. Thus, you may tend to stick with other unemployed folks who have more freedom to do what they want.
Maybe there are people online that I know who are unemployed. But, perhaps they just don't change their LinkedIn profile to save face. It's just so hard to tell.
Every time I take a mini-staycation and go wander around San Francisco in the middle of the day, everywhere I go is absolutely packed. From the french bakery around the corner, to the major shopping districts, people are everywhere. It's the same thing when I go to San Diego, New York City, Honolulu, or Los Angeles. Something is going on here and I can't place my finger on it.
Or perhaps there is actually no disconnect at all, because there's no point in working at the local KFC when you can collect unemployment benefits. Why try and earn an extra $400 bucks a month slaving away when you can spend your time searching for a better job and make almost the same through unemployment? I'm almost tempted to buy a shirt that says, “Why Work?”
The Answer Lies In The Comments
Thanks to the comments so far, I think we can come up with an answer to the massive disconnect. Did you know that about 50% of Americans have some sort of college education, but only 30% of Americans have college degrees?
I have to admit that I thought the number was closer to 50-60% for those who have degrees. When employers and the media increasingly start comparing undergraduate degrees to just high school diplomas, it becomes increasingly clear that education is one of the keys to employment.
If you own a company, it is your duty to shareholders that you maximize profits and do some good in the process. Part of becoming the best company is to hire the best people.
You're likely going to hire a skilled and educated worker with a college degree or higher than someone who didn't make it through college, for whatever reason. Sure, there will be exceptions, but when there are thousands of unemployed college educated workers as well, you might as well start from the top down.
I asked six other people I know to survey their own circle of friends and acquaintances. The sample set grew to over 1,200 and all of them said they only know 2-4 people each. They are all college educated people with 7-15 years of experience in law, high tech, banking, and internet. I think we're just hanging around with people who are roughly similar to ourselves in educational background.
Buckle Your Seatbelts!
At the present, it seems like the unemployment picture is much better than expected in the big cities. The bottom line is this: do whatever you can to get a college education.
Readers, please share with us how many unemployed people you know. What percentage is that of your total network? Please also tell us where you're located. Let's be completely objective here and avoid the biases to analyze the true level of unemployment.
Start your own business: If you feel you're not getting paid what you're worth, start your own business online on the side! It used to cost a fortune and a lot of employees to start your business. Now you can start it for next to nothing with a hosting company like Bluehost for under $4/month and they'll give you a free domain for a year to boot.
Brand yourself online, connect with like-minded people, find new consulting gigs, and potentially make a good amount of income online one day by selling your product or recommending other great products. Not a day goes by where I'm not thankful for starting Financial Samurai in 2009.