During recessions, unemployment goes up because more people lose their jobs, even though more unemployed workers are finding new jobs. This happens because too many new hires are competing for the same jobs, making it harder for the unemployed to find work. This congestion effect explains about 30-40% of the ups and downs in U.S. unemployment rates. It also helps explain why people earn less after losing a job during a recession, why it's tough to find work after graduating in a downturn, and why unemployment doesn't always improve with policies like unemployment insurance.