Introduction In the Wall Street Journal dated September 6th 2013, an article titled, ‘Unemployment Drops for the Wrong Reasons’ describes how unemployment has dropped in the United States based on the latest Bureau of Labor Statistics population survey. According to Izzo (2013), there was a drop in unemployment rate to 7.3% by 0.1% in August 2013. This was coupled with a drop of broader measure of unemployment by 0.3% to 13.7%. On closer scrutiny, the drop in unemployment came from wrong reasons (Izzo, 2013). The arguments in the article are that the decline in the rate of unemployment is purely due adverse factors in the US economy. The 0.1% was approximately equal to 115,000 people. The key reason that there was a drop in unemployment rate is that the labor force declined by 312,000. In macro economics, labor force is defined as the actual people who are available for work. This includes the employed and unemployed. Retrospectively, the drop in labor force indicates a drop in the summative value of unemployed and employed population. Izzo (2013) posits that the indication of the decline in unemployment was a long term discouragement and loss of hope of the labor force. Consequently, people are not willing to search for work at the prevailing rate and hence cannot be considered as unemployed. The article indicates that the labor force participation rate in the United States by August 2013 was at its lowest (63.2%) since 1978. This rate has been defined as the ratio of labor force and overall population size in a given demographic cohort (population at the same age bracket). Although it has been reported that the number of jobs in the US economy went up in August, there was a surprisingly significant drop in employed population.... ... middle of paper ... ...mendation, a mixed policy approach should be initiated. This comes from the fiscal and monetary policy perspectives. Therefore, expansionary policies should be able to enhance an increased aggregate demand which will offer adequate total revenue on the demand side of the economy. On the supply side, the target should be to initiate policies that stimulate production at low cost. One of the forces that have been identified in the Theory of Effective Demand pioneered by Michal Kalecki and championed by Keynes and his followers is technology. By agitating for better and innovative constructive technologies, the US can be able to remedy the Discouraged Worker Effect situation expressed in Izzo (2013). However, this is seemingly a long term strategy. Being a follower of Keynes, I believe Keynesian policies where the government is fully involved will remedy the situation.
A key to victory this November is the unemployment rate. According to a Bloomberg National Poll conducted in March 8-11, 42% of Americans consider unemployment and jobs as “the most important issue facing the country right now” (Priorities). Although there has been 24 consecutive months of private sector employment growth, the Federal Reserve suggests that the numbers could fade in the coming months. The importance of creating more jobs cannot be stressed enough. No President in the recent era has been reelected with the unemployment rate above 7.2% (Roth). To paint a picture, in late 1982, the unemployment rate topped 10.8 under Ronald Reagan. However, about 36 months later, the rate dropped to 7.2% percent. The drastic drop in the n...
The lack of employment at this time is due to the lack of money to invest and expand, and as a result output is greatly reduced. However, nowadays, unlike the past 20 years, credit is now available much more easily for companies through banks and building societies so not as many employees are affected by structural unemployment. Demand deficient unemployment is caused by a lack of demand. Keynes believed that unemployment had more to do with the goods market than the labour market.
The labor market entails the relations between the demand for labor, in one hand, and labor supply, on the other hand. Labor demand is defined by the amount of labor firms demand in order to produce certain amount of goods and services. Labor supply refers to the productive segment of the population that is determined by the size of the population. Within the labor market, workers can be classified as either economically active (the employed and the unemployed) or economically active. The employed encompasses people in paid employment or in self employment while the unemployed refers to people who are not working but have actively been looking for job and are willing to start work immediately. A person is classified as economically inactive if they are neither looking for work nor are they ready to start work. The labor force participation and the unemployment rate are major indicators of the health of an economy. This paper will compare the economies of the United Kingdom and Germany as well as their labor market (Shimer 2010).
During the Great Recession as well as the Great Depression, many individuals were left unemployed. Due to the Great Recession, employment had fallen “14.6 percent, from December 2007 to June 2009” (Goodman and Mance 4) in the manufacturing industry. During the Great Depression, unemployment rates reached a high of about 23 percent among Americans (Samuelson paragraph 7). Although the unemployment rate of the Great
Areas affected by unemployment have little hope of major improvement, and the longer that high levels of unemployment last the...
Neo-classical economics assumes that workers and employers are perfectly rational and that labor markets function efficient...
Stephen T. Evans (2015) wrote a scholarly article “An evaluation of the unemployment rates of the United States”, which he essentially criticized the government about the unemployment rates and their ignorance to the middle class. In Evans (2015) article, he began by stating the current unemployment rate which was 6.1% in 2014. Evans (2015) wrote, “This rate peaked at 10% in October 2010 and has steadily declined to 6.1% as disclosed on July 3, 2014”(p.157). Then he described how the unemployment rate doesn’t measure discouraged workers, marginally attached, and workers seeking part-time. Evans (2015) stated that 288,000 part-time jobs were added, one the other side 523,000 full-time jobs were lost. He also added a fact that 2.4 million Americans
Simply put unemployment is basically the act of not being employed. In the United States there are several different ways that one can label being unemployed based on the economy of our country at the time. Throughout history we have gone through many different depressions, recessions, and hard times all together. The first major hit this country took was when the stock markets crashed and sent the economy straight down into the sewers. It was called the Great Depression. Many people suffered and it caused suffering this country had never seen before, so many people fell to poverty level. This depression lasted from 1929 to 1941. Most recently America went through what is now called the Great Recession. This started in 2007 and ended June 2009. The general cause was due to the general decrease in the global markets around the world and was the greatest economic turnover since the Great Depression. This nineteen month long recession was what brought about the unemployment status that America is still adjusting too. The unemployment rate reached anywhere from 10 to 15% which is particularly high for our country to endure. By June 2010, the United States government decreased the unemployment rate down to 5%.
According to Livermore (2008), people who are actively looking for work but are not currently in a contractual arrangement are considered unemployed. Since the recession in 2007, unemployment has been an ongoing problem in America. Many companies were laying off thousands of employees because they could not pay them. As of September 2011, the South and the West has the highest concentration of unemployment. Nevada has the highest jobless rate, 13.4%, followed by California with 12.1% (Cooper, 2011). The collapse of the housing bubble left Nevada with high rates of unemployment. South Carolina’s unemployment rate is 11.1% and is the fourth highest in the nation (Cooper, 2011). Most people had a hard time finding work because they were not familiar with filling out applications online; especially if they had been working for 30 years at the same company (Alpert, 2011). The labor market is governed by the laws of supply and demand. There are policies that address labor supply and labor demand.
Technology unemployment is unemployment due to our discovery of means of economizing the use of labor outrunning the pace at which we can find new uses for labor. (Brynjolfsson & McAfee, 2011)
what is causing this decrease. In 2013, the amount of unionized workers fell to a 97year
The disparities between the two views of the economy lead to very different policies that have produced contradictory results. The Keynesian theory presents the rational of structuralism as the basis of economic decisions and provides support for government involvement to maintain high levels of employment. The argument runs that people make decisions based on their environments and when investment falls due to structural change, the economy suffers from a recession. The government must act against this movement and increase the level of employment by fiscal injections and training of the labour force. In fact, the government should itself increase hiring in crown corporations. In contrast the Neoliberal theory attributes the self-interest of individuals as the determinant of the level of employment.
All of these above show the influence of the unemployment. In spite of how many
That said, the advantages of technological change outweigh the associated training costs. Consequently, governments and economists support technological change despite the risks of structural unemployment. How does an economy recover from structural unemployment and what government actions can help facilitate this recovery? Despite the support of government and economists on technological change, the resulting structural unemployment can never be left un-checked. In fact, measures should be put in place to facilitate recovery of this type of unemployment.
In December 2007, the United States of America experienced a very scarce yet appealing setback. In fact, because of this specific dilemma between 200,000 and 500,000 were left unemployed and without a stable home. The national Bureau of the Economic research defined this nationwide downfall as “The great recession”. According to the U.S Bureau of labor statistics the unemployment rate has not made a drastic improvement since the start of the great recession. Unemployment has become that is still rising today with a slow rate of change. Unemployment is usually expressed as a number or as a percentage of a larger number. Although it has been ambiguous who has to be included in the percentage, there are members of society without a job, for whom it is certain that should not be added. Officially the unemployed are the people who are registered with the government as willing to work and able to work at a going wage rate but can’t find suitable employment despite an active search for work. In the article “why long-time employment can’t get back on track”, the author begins speaking on a ...