CHAPTER 23 Unemployment
Unemployment can happen to anyone.
Mary left a lucrative job at Google to work as a product manager at a tech start-up. But her new company has not been as successful as expected, and she—along with half the staff—just got laid off. Two weeks into unemployment, she runs into a former colleague who is gushing about a new promotion. Mary would rather avoid telling her that things at the start-up did not go well, but she summons her courage and admits that she’s been laid off because she knows that any conversation can be a job lead.
Mary is a diligent job-seeker. She works hard each day to find and follow up on leads. After two months, she lands a position at a technology company where a friend works. She’s thrilled to have a paycheck, but she also knows that she’ll have to pinch pennies for a while: She went a few months without her usual salary and had to dip into savings to cover expenses. She wants to build her savings back up quickly, as she now knows just how important it is to have savings when facing unemployment.
Searching for a job is time-consuming and hard, both financially and emotionally. Yet jobs end as businesses fail, work becomes automated or outsourced, and factories close. And people leave jobs to pursue other opportunities, to meet personal obligations, and sometimes to take a break from a job they hate. Most people transition jobs at least ten times before they turn 50. Some job transitions may involve a period of unemployment—a time when you’re ready to work, but don’t have a job. No matter what the reason, when you’re unemployed, you’ll spend your days looking for work instead of doing work.
Some unemployment is inevitable, but that doesn’t make it any less miserable when it happens. Thankfully, unemployment doesn’t always last long, and understanding it will help you better manage those transitions for yourself. In this chapter, we’ll learn more about unemployment and its causes. First, we’ll delve into the different ways unemployment is measured to get a better understanding of the labor market. Then, we’ll investigate the causes of unemployment. Finally, we’ll examine the costs of unemployment, which go far beyond lost wages. The job market is a critical institution for millions of Americans, and it will be for you too when you graduate. So let’s get started.