Unemployment in the United States

United States was majorly affected by the global recession that occurred more than half a decade ago. In fact, the aftershocks of the economic crisis led to higher levels of unemployment, which the country is yet to fully recover. However, it is a major policy of the Obama administration to ensure that the unemployment trend is significantly reversed through the current job creation program. Unemployment rates of a particular country provide crucial information that can comfortably be used to measure the health status of the economy at any given time. Generally, to be unemployed refers to when an adult skilled in a particular specialized area of a profession is unable to find a job despite a constant and active search for the same. To measure the unemployment rate, there is a division of the number of people without jobs by the total number of those individuals that are currently employed at any given region (Janoski et. al, 42).

Factors Affecting the Employment Rates in the United States

There are several factors that have led to the high levels of unemployment in the United States. These factors are discussed below:

Economic Conditions

The real annual Gross Domestic Product signifies strong, weak or stagnant economic conditions of a given country. For instance, recent data for the US economy suggests that there is a slow recovery in the economy growth pace, which relates to the gradual but steady increase in the jobs created. In essence, a booming economy attracts investors who will invest on various job creating activities hence reducing unemployment levels. Additionally, favorable conditions lead to higher tax revenue in taxes collected by the government, which is then utilized in further job-creating business activities. In contrast, unfavorable economic conditions encourage business closures by scaring away investors, hence higher unemployment rates.

Global Competition

The dawn of the 21^st century ushered in a new era of global competition in technology, military and also business activities. Consequently, emerging economies such as China, India and Russia have enacted policies that encourage ease of doing business in their countries. Therefore, most investors are relocating to these recently industrialized countries in search for a wider market and cheaper labor, leading to rising unemployment levels in the United States.

Education

The skills imparted on the workforce should be able to meet the ever changing job market requirements. Unfortunately, in the United States, a strong growth in the magnitude of the skill gap is observed, which brings about the alarming unemployment rates. To combat this, the relevant authorities should constantly redesign the education system to meet the evolving market requirement, hence reversing the unemployment trend.

Job Automation

Technology Advancements have led to a development of sophisticated robots that are quickly replacing humans, especially those who hold technical and manual jobs. Given that the maintenance cost of these machines is relatively low; top level managers are considering the machines to reduce the operational cost. Therefore, the replaced workforce is retrenched, hence rise in unemployment levels.

Wage levels

The economic hardships in the United States have subsequently led to the rise in the cost of living. With constant wage levels, the employees are no longer able to fully meet their financial needs without lowering their standards of living. Consequently, out of desperation, most of the workforce quit their jobs to search for greener pastures that an enable them maintain their living standards. In fact, most consider self-employment or other jobs overseas. This trend in the recent past has been one of the leading factors that encourage a rise in unemployment level.

Measurement of Employment and Unemployment Rates in the United States

            Since 1940s the United States government has been gathering data on a monthly basis to be used subsequently in the analysis of the employment status of the citizens that have attained the employment age. This data has proved to be useful in that the policymakers refers to it whenever they are enacting measures that are utilized in curbing the ever increasing economic challenges. Additionally, the quantitative data gathered is used to shed light to ways in which the unemployed population can be assisted to sustain their families. One of the simple concepts of classifying people is by use of here terms; employed unemployed and the labor force. The employed population includes people with jobs, which contrast the unemployed persons. However, the labor force comprises both the employed and the unemployed.

            Usually, the data gathered includes seeks to answer questions regarding the workforce such as their gender, their age, and also their education levels. Also, data regarding their employment status and the mostly concentrated region for the unemployed is collected. The information is further computerized for easier analysis using specialized computer software. Ultimately, the data analysts are able to find out if there is rise or decline in the numbers of the unemployed population.

Unemployment Rate

In the United States, the unemployment rate is measured as a percentage of the overall workforce population which currently stands unemployed, but was readily available for a job opportunity in the past four weeks, an equivalent of a month. In fact, it is the ratio of those unemployed to the sum of both the employed and the unemployed, or the current workforce. The employed persons must be sixteen years and above.

Unemployment Rate =Unemployed/ (Employed + Unemployed)

 National Unemployment Rates (Percentage), 2008 - 2015

	Jan.	Feb.	Mar.	April	May	June	July	Aug.	Sept.	Oct.	Nov.	Dec.
2015	5.7	5.5	5.5
2014	6.6	6.7	6.7	6.3	6.3	6.1	6.2	6.1	5.9	5.8	5.8	5.6
2013	7.9	7.7	7.5	7.5	7.5	7.5	7.3	7.2	7.2	7.2	7.0	6.7
2012	8.3	8.3	8.2	8.1	8.2	8.2	8.2	8.1	7.8	7.9	7.8	7.8
2011	9.0	8.9	8.8	9.0	9.1	9.2	9.1	9.1	9.1	9.0	8.6	8.5
2010	9.7	9.7	9.7	9.9	9.7	9.5	9.5	9.6	9.6	9.6	9.8	9.4
2009	7.6	8.1	8.5	8.9	9.4	9.5	9.4	9.7	9.8	10.2	10.0	10.0
2008	4.9	4.8	5.1	5.0	5.5	5.6	5.8	6.2	6.2	6.6	6.8	7.2

 Source: Bureau of Labor Statistics

Table 1

The table above represents the unemployment rates for the United States as recorded since the year 2008. The data is gathered on a monthly basis by the bureau of labor statistics whereby a random sample of a targeted workforce is administered with questionnaires that they fill with the necessary information. The annually averaged rates can, therefore, be used to plot a graph as shown below. For additional data on the seasonal adjustments and the particular data regarding sex, ethnicity and age of the workforce, see the attached appendix.

Graph 1

In graph one above, the national annual average unemployment rate picked at approximately 10% in the year 2009-10. This was clearly as a result of the global economic crisis which rendered a significant number of U.S citizens jobless. Of keen to note is that the stimulus packages and other policies introduced by the government have helped set a path towards a recovery from the crisis, hence the observed gradual decline in the unemployment rates. However, in this consideration, the unemployment rate as at March 2015 is just over 5%. This signals that there is still a significant unemployed workforce.  In this regard, the federal government should quickly fine-tune the existing policies to aid the workforce.

The policies used to Minimize Unemployment Rates

Since the year 2008, various policies have been applied by the Obama Administration to curb the rising unemployment rates that threatened the economy. Mainly, the government employed two-sided policy strategy, which included the demand policy strategies and the supply-driven policies. First, the policies focused on the demand highly assisted in minimizing the impact of the unemployment caused by the recession. On the other hand, the enacted and implemented policies that are sided towards the supply assisted to remarkably eliminate the structural unemployment, widely argued as a natural form of unemployment.

Demand Driven policies.

There are major demand side policies to control the rising unemployment rates include the fiscal policy and the monetary policy. Both of these policies have been applied in the United States since the global recession.

Fiscal policy

Fiscal policy involves the enactment of laws that will encourage the overall government spending at the same time ensuring that the taxes on the corporations are cut dramatically. By so doing, the economic growth and the aggregate will be boosted hence decreasing unemployment. Research that has been conducted has led to a conclusion that lowered taxes raises the levels of disposable income, hence spurring the average consumption rates. Further, this will raise the aggregate demand levels, thus the real GDP. This will signify that the bankruptcy levels by the firms as a result of the economic turmoil will be averted and the job losses as well (Strawser et al., 8)

Monetary Policy

Monetary policy involves passing laws that involve cutting the rates of interest, hence reducing the borrowing cost. Therefore, investors will be encouraged to invest on the employment generating activities. Additionally, people will be encouraged to spend, hence economic growth stimulation. In case this policy becomes fails to stimulate growth, quantitative easing will be applied. This tends to increase the money supply, thus accelerating the demand. (UBEO, 160)

Supply Driven Policies to Curb Unemployment Rates

Education Policies

This is an area where the U.S. government has not fully succeeded. It involves laying out the structure in place that will encourage school enrollment and imparting of necessary skills and knowledge that meets the market requirements. This includes subsidizing the cost of education or funding it entirely up to tertiary level and regular review of the education systems by the concerned authorities. However, this policy is usually effective in the long run. Currently, the cost of quality university education is relatively higher, making it hardly affordable to the low-income families. Unfortunately, the workforce in these families remains unemployed, given their lack of necessary skills required for one to have a better pay job.

Offering Subsidies to the Employing Firms

Enacting laws that will see the firms that are employing a large workforce get tax breaks and government help will encourage other firms to do the same so as to benefit from such tax cuts. In the long run, employment rates will significantly rise.

Regulation of the Trade Union Powers

Real wage unemployment levels usually arise if the currently employed workforce is earning wages which are actually over the recommended levels of market clearing. This is usually caused by the trade unions which overstep their mandate especially when left unchecked. As a result, they are able to successfully bargain for a higher employee wages. Therefore, the limit of the operational cost by a firm will discourage it from hiring other employees. To curb this, the government should pass laws that will limit the power and influence of the trade unions.

The flexibility of Labor-Market Improvement

 Labor markets that are restrictive in nature alarmingly raise the levels of structural unemployment. For instance, most organizations in the United States have maximum working weeks per a given employee. This significantly reduces the chances of another employee being hired. Therefore, if the government finds a way of abolishing this without disrupting the optimal performance levels of the firms, more job opportunities will be created.

Geographical Mobility Policies

As it is noted from the data gathered by the Bureau of Labor Statistics, most of the unemployed workforce is concentrated in one geographical area. For instance, the geographical locations that are highly inhabited by the black population in the United States records a higher unemployment levels as compared to those areas resided by the whites. In this regard, the government should ensure set up of industries in these areas by offering subsidies to the investors willing to relocate or open branches in these areas. Alternatively, the government can aid in the mobilization of the unemployed workforce in the concerned regions to greener pastures elsewhere in the country.

Conclusion

In conclusion, United States remarkably suffered the effects of the global recession that took place more than half a decade ago. This led to various economic challenges which include the soar in the unemployment rates. Therefore, the U.S government has embarked on a strategic plan that will ensure the full recovery of the economy to its prior status. Subsequently, these policies comprise means and measures to diminish the alarming unemployment levels observed in the country. Despite the numerous measures set up, there is more that the government can do to ensure that a permanent solution to the economic problems can be formulated. One of the initial steps towards this goal is the reaffirming of the policies to meet the ever-changing market needs.

Works Cited page

Janoski, Thomas, David Luke, and Christopher Oliver. The Causes of Structural Unemployment: Four Factors That Keep People from the Jobs They Deserve. , 2014. Print:1-46

Strawser, Cornelia J, and Mary M. Ryan. Business Statistics of the United States, 2012: Patterns of Economic Change. Lanham, Md: Bernan Press, 2012. Print.:1-67

The U.s. Budget and Economic Outlook(UBEO), 2006-2015. New York: Cosimo-on-Demand, 2005. Print:1-250