Unemployment in the US

Unemployment is becoming a public debated issue in America due to its effects on economic growth. Increased unemployment has raised concerns among the public policy makers, economists and political analysts as it is becoming an impediment to economic growth. Unemployment described as a state where individuals qualified for various jobs and willing to work, are actively seeking for employment opportunities that are not available. Many of the social problems, for instance crime, have been associated with the increased rates of unemployment. The federal government is working closely with the various state governments and other private sector stakeholders to find a permanent solution to unemployment. A solution to unemployment is likely to present a solution t a series of social and economic problems (Yellen, 2014).

The Obama administration came to power with the promise of creating more job opportunities, especially for the youth. Current statistics depict a significant reduction in the unemployment rates. Data from the Bureau of labour indicates that 248,000 jobs created in the recent years have improved the unemployment situation in America (Bureau of Labor Statistics , 2015). The increasing population and better public education have been major contributors to the ever increasing unemployment rates. Data shows that close to 9.8 million American citizens are unemployed. This number is likely to reduce if the current policies are successfully implemented. The Bureau of Labour Statistics approximates that more than1.2 million jobs will be created in the current fiscal year (Bureau of Labor Statistics , 2015).

The labour participation rate, that is, the number of individuals actively involved in employment, was documented as 62.7% in 2014 (Yellen, 2014). This is the lowest value ever recorded in the US history since 1978. Janet Yellen, the Federal Reserve chair, is concerned that the current job numbers are not demonstrative of the national crisis (Yellen, 2014). She argued earlier that those behind the statistics were striving to better their lives. Despite her sentiments about the number of job opportunities created which were higher than what economist expected, economic analysts still recommend a certain degree of cautiousness. They also asserts that, if there is a further reduction in the rate of unemployment, a faster economic growth rate is likely to be achieved. Unemployment is one of the macroeconomic variables that need to be regulated so as to attain economic growth (Yellen, 2014).

To change the current situation, the government can engage in demand expansion policies. This will include the use of fiscal policies geared towards increasing aggregate demand in the economy. The first fiscal policy is a reduction in the taxation rates. Reduced tax rates increase people’s disposable income. This will increase the aggregate demand for goods and services. The real GDP will rise as firms will be producing more products and services to counter the growing demand. Increased production will consequently require more manpower, meaning that firms will have to hire more workers in their bid to increase production. The government can also increase its public expenditure. This pumps more money into circulation and thus increasing aggregate demand. This strategy will have a similar effect as a reduction in the taxation rates.

Monetary policies can also be used to induce employment in the economy. The government, through the Federal Reserve, can reduce the interest rates in the economy. This reduces the cost of borrowing. This makes funds cheap and readily available to the public. People will have more money to spend on goods and services. In turn, it increases the aggregate demand in the economy (Yellen, 2014). As stated above, there will be increased production and eventually increased demand for labour by firms.

References

Bureau of Labor Statistics . (2015). The Employment Situation. Washington, D.C: U.S Bureau of Labor Statistics .

Yellen, J. L. (2014, August 22). Labor Market Dynamics and Monetary Policy. Retrieved from Federal Reserve Bank: http://www.federalreserve.gov/newsevents/speech/yellen20140822a.htm

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Unemployment in the US

Introduction

Unemployment is a chief social problem that has affected many countries with America being no exemption. Joblessness or unemployment happens when people have no work and are actively seeking for work. The rate of unemployment is an assessment of the unemployment prevalence and is calculated like a percentage after dividing the current individual workforce and the unemployed people. When recession occurs, the economy faces a moderately high rate of unemployment (Haugen, David, 34). A report by international labor organization, about 197 million people or about 6 % of the workforce of the world were unemployed in 2012. Despite the fact that America is among the most urbanized nations, it has a considerable unemployment rate among its population. The essay will focus on the causes and measures of the unemployment rate in America and ways to reduce this rate.

Unemployment and job creation are barred by factors like global competition, economic conditions, automation, education, and demographics. These aspects may affect the employment duration, number of employees and the wage levels. The rate of employment grew consistently in the 1990’s, but due to the recessions faced in 2001 and 2008-2009, it has been unpredictable (Kennedy, Neale, 76). The people employed regained its peak from the 2007 recession in 2014. The job growth rate in the US has dwindled a bit in July, making the rate of unemployment rise unexpectedly, indicating a slack in the work market, which would prompt the Federal Reserve to lower the interest rates for sometimes. Despite the low growth rate of jobs in July, employment expanded a bit.

The rate of unemployment normally goes down during the times of economic prosperity and goes up during downturn, generating essential demands to the public funds as tax revenues falls and the cost of social security net rises (Haugen, David, 95). Polls point out that Americans consider job creation as the main concern of the regime, with their key resolution as not allocating jobs overseas. Unemployment is measured in various ways. An individual is unemployed when they are jobless and searching for a job, and vacant work. The rate of unemployment in the US in June 2014 was 6.1 %.

In conclusion, it is clear that unemployment in the United States is a chief social problem. As such, better policies and stringent measures needs to be placed by the government to help decrease the unemployment rate done by stabilizing the economy, reduction of taxes on businesses, and creation of a favorable environment, which promotes business in the nation. Jobless people in the country will engage in illegal acts like crime, which will only exacerbate the economy status of the country.

Work Cited

Haugen, David M, and Susan Musser. Unemployment. Detroit: Greenhaven Press, 2011. Print.

Kennedy, Neale. European Unemployment: Macroeconomic Aspects : Unemployment in the Eu and the Us : a Macroeconomic Perspective. San Domenico, Italy: European University Institute, 1997. Print.