Unemployment in the US discussion

The rate of unemployment in the United States has been a subject of debate among economists for several years. The US. Unemployment rates have not been stable since the great depression in the early 1930s.  During the great depression, the US experienced the worst economic crisis, with unemployment rates reaching 23.6 percent (Sherk, 2010). Since the post-war period, the US economy has not been stable. Most recently, the unemployment rates have fluctuated, but many are yet to see the benefits of this fluctuation. Although the US has created millions of jobs, poor economic performance has contributed significantly to the high rates of unemployment in the US.

Poor economic performance has been a challenge in the US for a long time. The financial crisis in the US is the worst industrial disaster the country experienced since the great depression. The 2008 economic crisis affected all parts of the economy. The economic crisis led to the stock market crash, spiked inflation causing high unemployment rates.  A series of bank failures caused a severe financial crisis (Kalleberg and Von Wachter, 2017). The stock market declined to $ 8 trillion between 2007 to 2008 as unemployment rates reaching its peak at 10 percent by 2009 (Kalleberg and Von Wachter, 2017).  With the US economy shrinking to 2.3%, more than $ 9.8 trillion of wealth as home values plunged.  The country also lost trillions in its global economic growth, dropping to 4 percent (Kalleberg and Von Wachter, 2017). Even though the US economy has since recovered, however, most of its citizens cannot access well paying they had before the recession. Today, many workers are still struggling to get jobs due to the effects of the financial crisis.

The unbalanced economic conditions have been linked to high rates of unemployment in the US. Wages and incomes have stagnated for a long time as low-income earners struggle to maintain their living standards. A large portion of American workers earns low wages as compared to workers in high-income nations (Kriner and Shen, 2010). The wage gap has widened with time.  Those earning low income have remained behind as compared to wealthy individuals. Wealthy households earn a larger share of the overall revenue. According to the unemployment report by the department of labor in 2010, only one percent of the low-income households earned about one-sixth of the American income (Kriner and Shen, 2010).  It is the wealthy individuals who enjoy half of the overall revenue. This implies that rising economic growth does not apply to everyone equally.

The middle and low-income workers in the United States have not benefited from the economic recovery. Data reveals that wealthy households and large companies have made significant gains since the end of the recession.  Thus, the long trends of inequalities that have been impervious to the economic growth.  Today, low-income earners cannot meet their basic needs, such as access to adequate health care and affordable quality education. The growing income inequality reduces the ability of low-income workers to purchase goods and access services, which in term affected middle-level jobs (McEachern, 2016).  Economists and financial analysts believe that income inequality continues to change the economic growth destabilizing the economy.

Unemployment rates in America remain unchanged due to the lack of sustainable solutions employed by the government.  Both the central and local governments prefer laying off workers to survive hard economic times. The government has failed to seek other alternatives to improve the economy.  Employment within the public sector has decreased, states and local governments are forced to face difficult choices caused by falling tax revenues and increased demand for public services (Sherk, 2010).  The government has resorted to laying off people from all sectors, including police officers, teachers, and other workers.  This has mostly contributed to unemployment in the US. Additionally, this has discouraged many people from seeking jobs as people have developed a notion that there are no jobs.

The most exciting aspect of the unemployment in the US is the high number of people who have been unemployed for a long time.  The US continues to experience severe frictional unemployment due to several reasons. Research studies reveal that the number of people unemployed for six months and longer has risen to 89,000 within the last two years (Sherk, 2010).  The average duration of unemployment rates keeps on increasing due to several factors such as competition. Many graduates hope to get well-paid jobs after graduation while those in employment seek for better working environments. Longer working hours and fixed work schedules have been the primary cause of people asking for better employment terms. Many Americans avoid jobs with long working hours (Worstall, 2013). Unemployment has been further accelerated by the fact that those previously laid off are likely not to be rehired since their skills have detororiated.  Those who are  unattractive to employers are quickly excluded from employment.  Even though employers complain of a shortage of skilled labor, many long terms unemployed individuals cannot be rehired due to the effects caused by frictional unemployment.

Cyclical unemployment plays a significant role in the unemployment rates in the US, which is the primary cause of high unemployment in America. Employment is usually tied to the business cycle; when the economy expands, most companies rehire employees, this means many people are likely to get jobs during the economic boom (Kalleberg and Von Wachter, 2017). Cyclical unemployment happens in the farming, construction, and tourism sectors.  During peak seasons, job seekers can access several job opportunities. Still, after the season, there is a low demand for services and products, leading to retrenchment (Kalleberg and Von Wachter, 2017). Most sectors in the US depend on seasonal employment. When consumption decline, business revenues also decline, forcing employers to lay off workers to have a favourable profit.

Cyclical unemployment in the construction industry has been a common occurrence in the US. When the housing crisis unfolded in 2008, the home builder was affected and stopped operations of building new homes. More than 2 million construction workers were laid off (Worstall, 2013).  During recessions, companies seek for better ways of improving productivity; thus, prefer using machines because few workers are needed. However, when there is a boom, the laid-off workers cannot be rehired since their skills no longer match the need of the company (Worstall, 2013). This explains why cyclical unemployment causes unemployment in the US since cyclical unemployment results in a significant decline in employment demand.

The poor performance of the economy is also caused by involuntary unemployment. Unlike other developed nations, in the US, many people look for jobs and are willing to work but cannot get these jobs.   The increased population caused by immigration and the American dream have resulted in high job competition.  With the federal government not being able to create new job opportunities to cater for its increasing population, many job seekers cannot access employment (Kalleberg and Von Wachter, 2017).  Increased competition among job seekers has created a higher demand for better education. Those without good knowledge find it hard to work in various sectors that require skilled human resources. Thus, many people remain unemployed.

Involuntary unemployment is the cause of high unemployment rates in the United States due to a lack of aggregate demand for employment. A larger population in the US is involuntarily unemployed for various reasons.  Competition and technology exclude many job seekers making job opportunities scarce. In any market, when the aggregate demand falls, involuntary unemployment will occur because employers are likely to reduce wages (McEachern, 2016). Reduction in wages during hard economic times does not necessarily lead to demand for labor. Instead, employees seek or ways of holding on to the few existing opportunities, including accepting low wages. This has been a common problem causing unemployment problems in the US labor market. Many people are willing to work, but there are limited employment opportunities.

The US economy has not been stable as the unemployment rates keep on fluctuating due to several reasons.  The government initiatives of creating more jobs have not yielded positive outcomes as the economy continues to decline over the years. The economic crisis in the US caused by unbalanced economic conditions, lack of sustainable solutions by the government to manage unemployment are some of the critical factors that have contributed significantly to the fluctuating rates of unemployment in the country.





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