Unemployment Research Paper
Unemployment
Research Paper
Article summary
The article deals with the current unemployment situation in the USA. The rate of unemployed in the USA reached 4,5 percent in April, as fewer jobs were made by the employers in the recent months. The Labor Department admits that payrolls increase very slowly, along with the wages. In comparison with 4,4% rate in March, the rise in recent unemployment rate is not significant, and there is still no crisis in the labor market. 4,5% indicates quite a strong national economy.
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The article also deals with the economists’ concern in the unemployment rate, and makes people think over its possible consequences. The article also provides certain piece of information on the causes of unemployment in different countries, compared with the USA.
Peter Sperling, professor of finance and economics at Touro College, told:The Federal Reserve is not going to stop worrying about inflation pressures with a four-and-a-half percent unemployment rate (CBS News, 2007).
It means that though the rate of unemployed is relatively low and doesn’t grow fast, there is still a threat of economical recession.
According to this article recent number of unemployed is not what economists predicted. Many of them claim that they expected greater growth of job vacancies. But even in these circumstances, the number of jobless people in the USA is relatively low by historical standards. Nearly 90,000 of new positions were added in February, while in April there were 113,000 of new jobs. The salary increases very slowly. According to statistics, 3,7% appeared to be the slowest growth in a year. Although the wages increase is important for people’s well-being, its rapid growth will threaten national economy with inflation. What other consequences may unemployment bring?
They include poverty, higher rate of crimes, political instability, health problems and many others. The main aim of economics in such circumstances is to understand the reasons for unemployment and try to decrease negative impacts on social and economic spheres. Peter Sperling admitted that “Four-and-a-half percent means that there’s no need to stimulate the economy, so they’re certainly not going to cut interest rates, so interest rates are likely to stay where they are for some time”.
Finally the author of the article says that joblessness affected such spheres as construction and manufacturing along with different kinds of services. New positions were added mainly into the health care, leisure and education, government and different professional and business services. It is mentioned that workers spend more time for job hunting in comparison with previous months, as seeking jobs becomes more and more difficult. Economists expect that unemployment rate is likely to reach 5% by the end of the year.
Relevance to Chapter (Unemployment)
The article is undoubtedly relevant to the topic we’ve discussed in the classes. That’s why; I’d like to consider opinions of different economists on the problem of unemployment and whether it can be somehow beneficial. Investigating macroeconomics and labor, the attention should be paid not only to those, who have stable and permanent job, but also to those, who are deprived of it. Only the minority of population related to the paid labor force. Youth, elderly people, the major part of women and all the unemployed relate to minority. It should be mention that most of these people work not less than those with permanent jobs. When a person is eager to work, but doesn’t have a job, he has no opportunity to lead a normal life, which creates material and psychological difficulties.
In the past US economists considered that unemployment was the result of low purchase ability of the population. According to this opinion, government can influence the demand for goods, which is supposed to encourage the appearance of new jobs. Complete employment became an important purpose of the state politics in the USA. When it is successful, the economic growth is more or less stable.
In the USA unemployment is higher among ethnic minorities and teenagers. From social point of view, an experience of being unemployed can be especially traumatic for those, who used to have a good and reliable working place, but lost it for some reasons. The most visible consequence of it would be the loss of income. Economists consider that the USA has more economic difficulties than other countries, because it provides temporary privileges for jobless people, unlike Britain, for example.
The unemployment rate differs according to the economic influence on population. In the United States people who work at least an hour a week for wages is considered to be employed, even though such people are eager to have a better job.
According to economic statistics, the majority of unemployed in the USA are:
adult men – 4,9%
adult women – 4,7%
whites – 4,6%
Asians – 4,1%
Hispanics – 6,6%
blacks – 10,8%
teenagers – 17,6%
It is a rough rank of unemployed people, which may be different in the course of time, depending on economic and social conditions in the country.
Article Critique & Additional Insight
Analyzing this article I must admit that it is a brief overview of the recent situation with unemployment in the USA. From the historic point of view, certain groups of people have always been in the condition of forced unemployment. Modern economic situation shows that growth of enterprises and production, specialization of labor and other factors formed a new system of economic relationships in the society with potentially vulnerable groups of people. Accordingly, in case of financial crisis, the survival depends on money paid by employers. During the economic crisis, the unemployment rate may reach 15%.
In macroeconomics people who have desire to work and are capable to do it, but can’t find the working place, are considered to be unemployed. The rate of unemployment indicates the number of jobless people divided by the labor force on the whole. Analyzing the article, I should say that unemployment affects the process of job-hunting as well. Lack of jobs means lack of chances to find a vacant place in a short period of time. The author admits that the length of job-seeking grew in comparison with previous years. Unemployment disables people to pay bills and purchase what they need. It becomes hard to pay debts and afford medical treatment, especially in the USA. Some investigators claim that growing rate of jobless people increases the rate of crimes, suicides and causes poor health state among population.
Despite the fact that the article provides valuable information about the unemployment in the USA, it doesn’t analyze the consequences of the growing rate of jobless people. I think that it would be important to consider the consequences in order to create a complete picture of economic situation. However, the unemployment is hard to define. People, who are registered as unemployed, can be engaged in some other kinds of labor. Many of them have temporary or part-time job. Besides, it should be taken into account that many people would like to have a well-paid job, but they fail to find it.
Making a deeper insight into the problem of unemployment, I’d like to consider lack of insurance for jobless people. Unemployment often makes people accept jobs which don’t fit their talents and abilities. It makes people feel insecure about their jobs, fearing to be replaced. This anxiety to loose a job, however, may bring better productivity and efficiency. Keeping inflation at a low rate is also highly beneficial for the national economy.
Finally I’d like to touch the question “why does the unemployment rate grow even in such highly developed countries as the USA?” An important factor is the sharp international competition between different branches of industry, which have always been the source of prosperity. Another reason is the crisis of world economy, along with introduction of microelectronic devices in industry, which eliminated the necessity in labor force. The number of women, willing to work also rises, which leads to higher competition among employees. It’s hard to say whether today’s high rate of unemployment will rise in the nearest future. The level of unemployment in the USA was decreased more successfully, than in Britain and major European countries. It is probably caused by the general economic power of the country which gives it more privileges.
The article “Fewest New Jobs in More Than Two Years” helps to understand modern labor conditions in the USA. Analysis of this article will give a better picture of unemployment as an aspect of US economy, its drawbacks and benefits.
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