She seems happy, but the stress of dad's unemployment could be hiding behind that smile. (Photo Credit: CC BY/Vicci/Moon Stars and Paper)

According to a new interdisciplinary academic study by the National Bureau of Economic Research, the stress of unemployment hits children hard. The study, entitled “Children Left Behind: The Effect of Statewide Job Loss On Student Achievement,” finds a correlation between community job loss and decreased performance on math and reading scores, reports the Huffington Post. This applies to the children of both the unemployed and the employed.

Significant effects on academic performance

In analyzing the math and reading test scores taken from fourth- and eighth-grade sample groups compiled by the National Center for Education Statistics, the study found that the stress of unemployment had significant effects. Specifically, for every 1 percent of a state’s working age population that is unemployed, the average math test score declined by 3 percent.

Study co-author Dr. Elizabeth Ananat of Duke University’s Public Policy and Economics department sees how uncertainty can create anxiety.

“Research has found that the stress and anxiety of losing your job is actually not so much greater than the stress of worrying about losing your job,” she said. “When there is a lot of job loss going on, the community gets depressed, and anxious. … That makes it harder for kids to learn.”

Growth recession indicates no real improvement

The current state of the U.S. labor market does not indicate to economic experts that a turnaround is in store, and thus the study authors expect the negative student achievement trend to continue. As many as 13.9 million Americans are officially unemployed, and another 8.5 million pursuing full-time work have had to settle for part-time jobs. Millions more face a kind of unemployment coma that keeps them from looking because of discouragement.

“When kids are at vulnerable times in their development, the impact of events like this can have long-lasting consequences,” Ananat said.

Low test scores in particular can remain on a child’s record for years, as numerous NBER studies have shown before.

‘The tip of the iceberg’

Study co-author Dr. Anna Gassman-Pines of Duke University said actions such as lowering class size can help counteract the negative effect of unemployment somewhat. However, many schools don’t have the economic means to make such changes.

Co-author Dr. Christina Gibson-Davis suggested that while the NBER’s test-score findings imply a problem, the implications likely run deeper.

“These are just test scores — not the greatest measure of the kids’ behavior,” Gibson Davis said. “This is probably the tip of the iceberg.”

Such scenarios as parents working multiple part-time jobs and multiple families living in the same household are no doubt issues that also contribute to the general sense of stress, experts believe.

Unemployment is a family affair

Sources

Huffington Post

National Bureau of Economic Research

The latest jobs report shows a continued high U.S. unemployment rate stuck in limbo between job gains and job losses. Nick Hewett/Flickr photo.

The latest jobs report detailing the U.S. unemployment rate for July reflects the ongoing battle between the bad news and the good news. The unemployment rate held steady at 9.5 percent. But the U.S. economy had more job loss than economists expected. The U.S. economy added 71,000 jobs in July, but lost 131,000. Manufacturing added 36,000 jobs, but those gains are the lowest of the year as orders and production decline. Average hourly earnings increased, average hours worked rose and productivity increased. But increasing productivity is another factor holding back hiring.

U.S. unemployment rate stuck in limbo

Companies in the U.S. added workers in July for a seventh straight month. However, The Wall Street Journal reports that taking into account revisions to prior months this year, the U.S. economy added an average of less than 100,000 jobs a month in the first seven months, a level that’s not strong enough to offset the job loss that would bring unemployment down. Jobs report data for June was also revised downward. Jobs fell 221,000 that month, more than the 125,000 job loss previously reported. Only 31,000 jobs were added to the private sector in June. The 131,000 job loss in July far exceeded the 60,000 economists polled by Dow Jones Newswires were expecting.

U.S. economy: work is  good if you got it

July’s jobs report did contain a few bright spots. Daily Finance reports that the average workweek increased by 0.1 hour to 34.2 hours. Average hourly earnings increased 4 cents to $22.59 per hour. U.S. productivity continues to increase at a robust rate — 3 percent in the last 12 months and 4 percent in the first quarter of 2010. Higher U.S. productivity is boosting corporate earnings. Companies are sitting on huge piles of cash. High productivity and more efficient business models are good for stock prices, but that means many companies don’t feel they have to hire more workers.

Fed ponders what to do about unemployment

The jobs report could determine what the Federal Reserve does next to influence the unemployment rate. Bloomberg reports that options outlined by Fed chairman Ben Bernanke last month include further reducing the 0.25 percent rate the Fed pays on banks’ reserve deposits.  Expanding the amount of assets on the Fed’s near-record $2.3 trillion balance sheet — a broad gauge of Fed lending to the financial system to hold down borrowing costs, is also an option.

Americans at odds with themselves about unemployment

Meanwhile, much like the good news/bad news in the jobs report, the conflicting opinions of the public cancel each other out. More than seven in 10 Americans say the U.S. economy is still mired in recession, according to a Bloomberg National Poll. Seven of 10 Americans also said reducing unemployment is the government’s top priority. But more than half are skeptical of the stimulus program and wary of more spending.

The remaining manufacturing projects involve more of a reliance on computers and sophisticated machinery, rather than manpower.

More and more Americans mistakenly believe that nothing is officially “Made in the USA” anymore. Though they are right that a lot of things did move to offshore manufacturing, there are still some items the U.S. is keeping for itself. The recession was hard on the manufacturing industry, and about 2 million workers lost their jobs. That alone created a huge portion of the unemployed public that had to struggle to get by. Part of the problem with manufacturing jobs is that most likely many of those positions will never return, and that leaves an entire group of workers who may never find equitable work to financially sustain themselves. It may take a considerable amount of effort and searching for them to regroup and reenter the market with a completely different set of skills.

Are things made in the U.S.?

The answer to whether things are still made in the United States is yes. Although toys, clothes and many electronic items are brought in from overseas due to the lower costs, there are still things that start and end in this country. American factories are making things—Ford trucks, airplanes, appliances, computer chip components and fertilizers are all examples of things U.S. companies are creating. Experts note that there has been a notable decline in manufacturing jobs, but not a decline in manufacturing. In fact, many companies are churning out just as much in product as they did pre-recession, but in different ways.

Some of the manufacturing projects that have remained in the system involve more of a reliance on computers and sophisticated machinery, rather than manpower. Many low-cost items like toothpaste and cleansers are manufactured with intricate machinery systems and require only a few humans to monitor consistent flow. Despite the huge loss of jobs in 2008 and 2009, overall the manufacturing sector’s output rose from 1987 to 2007, as reported by the Bureau of Economic Analysis.

How things are changing in the job force

With the decline in manufacturing jobs, the market is making a shift. The service sector is the fastest growing market in the U.S. Jobs like financial planners, pay day lenders, real estate agents, lawyers and health care providers are all booming. The job markets for these positions are stable and in demand. That demand is projected to continue to rise in coming years. With baby boomers aging, they are going to need service-oriented workers to help them with decisions, care, and planning.

Where does manufacturing fit in now?

Though service jobs are on the rise and taking over in terms of immediate openings, it doesn’t mean that manufacturing jobs are out of the picture. The market is merely shifting. Manufacturing is still a huge part of the US economy. It is the best industries for people without a college degree to enter. Not only are wages good, but benefits can serve a breadwinner well. In addition, jobs in the manufacturing sector cater to people who like the old school method of working their way up in a company. No one is going to start as a nurse and work their way up to Chief of Staff. However, a worker on an assembly line can aspire realistically to work their way up to manager.

Where manufacturing is going in the future

Manufacturing is not dead in the U.S. Experts are cautioning that the country may be too reliant on overseas industrialization when it comes to high-end products. The repercussion is that the U.S. may be forgoing its research and development by outsourcing technical manufacturing to other countries. In particular with the world “going green,” the U.S. has to remain competitive and on its feet when it comes to bringing new advancements into the market. Time will tell what happens with the manufacturing world, but it is far from gone. The US will shift and change but most likely will start to bring high-end companies into the mix. That’s great news for the millions of workers who lost their jobs during the recession.