Unemployment Issues in America - Case Study Example

Unemployment Issues in America School Unemployment Issues in America Unemployment defined Unemployment means the of a person in search of a paying job but not finding one. Unemployment factor does not include a retired person, children, full-time students, or one who is not actively in search of a paying job. (Malik Mumtaz, 2012, p. 269) Before stating the different kinds of unemployment, one must be sure to understand precisely what does the definition of unemployment in view of the Bureau of Labor Statistics include and how it measures the unemployment statistics. An individual must possess three qualities to be counted in the class of unemployed people: 1. They are currently available to work. 2. They are not working, even temporary or part-time. 3. They have searched actively for work four weeks in the past. Here the last mentioned point is often controversial but important too. If a person has stopped searching for work, the Bureau no longer entertains them as a part of labor force, or in the list of unemployed people. The BLS, however, does report such people separately in a specific category known as "marginally attached to the labor force,” Thinking of the types, unemployment is deemed to have three main types: frictional, structural and cyclical. The first two are the causes of natural unemployment rate, while the third crops up when the demand for labor force falls, in times of recession usually. Some economists are of the view as employment has two more five types such as classical and seasonal. (Kimberly Amadeo, 2013) Intuitively most of the people understand that unemployment means not having any job. But understanding more precisely how is unemployment measured for to properly interpretation and making sense of the numbers and figure appearing on television and in the newspaper is very important. A person is, officially, unemployed if he or she does not have a job despite being in the labor force. Therefore we need an understanding as how to measure labor force in order to correctly calculate unemployment. The issues and problems related to unemployment are generally given extensive coverage through the discussions of theory, measurement and policy backed up along the empirical evidence drawn out from postwar experiences in the United Kingdom and the United States. In an economy, the labor force comprises of those people only who are willing to work. However, the labor force is never equal to the population as there are always some people in a society who are either unable to work or unwilling to work. Examples of such people would include full-time students, the disabled and stay-at-home parents. For some specific statistical reasons, individuals aging 16 and older only are considered for counting in the potential labor force, and are counted in labor force only if they have searched for work for the past four weeks or are working actively. In the United States, The Bureau of Labor Statistics officially collects the statistics of unemployment. Obviously, it is unreasonable asking every person present in the country if he or she is employed or searching for job each month, so the Bureau has to rely on a representative sample having 60,000 households selected from the Current Population Survey. (Jodi Beggs, 2014) Based on such surveys, included below are the details of the employment ratio ups and downs in America during the past three decades. These statistics are interpreted and analyzed with the help of the table below followed by its graphical view: Year Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec 1983 57.2 57.1 57.1 57.3 57.3 57.8 58.1 58.2 58.4 58.4 58.7 58.8 1984 58.8 59.1 59.1 59.3 59.7 59.9 59.8 59.6 59.7 59.7 59.8 59.9 1985 59.9 60.0 60.2 60.1 60.1 59.8 59.9 60.0 60.3 60.3 60.4 60.4 1986 60.6 60.3 60.5 60.5 60.5 60.7 60.8 60.8 60.8 60.9 60.9 61.0 1987 61.0 61.1 61.2 61.3 61.6 61.4 61.6 61.8 61.6 61.8 61.9 62.0 1988 62.0 62.1 61.9 62.2 62.0 62.3 62.3 62.4 62.4 62.5 62.7 62.6 1989 62.9 62.9 62.9 62.9 62.9 63.0 63.0 63.1 62.8 62.9 63.0 63.0 1990 63.2 63.2 63.2 63.0 63.1 62.9 62.8 62.7 62.5 62.5 62.3 62.2 1991 62.0 61.9 61.8 62.0 61.6 61.7 61.6 61.5 61.6 61.5 61.4 61.2 1992 61.5 61.3 61.5 61.6 61.5 61.5 61.6 61.6 61.4 61.3 61.4 61.4 1993 61.4 61.4 61.5 61.5 61.7 61.8 61.8 62.0 61.7 61.8 61.9 62.0 1994 62.2 62.3 62.1 62.3 62.5 62.3 62.3 62.6 62.7 62.9 63.0 63.1 1995 63.0 63.1 63.1 63.1 62.7 62.7 62.8 62.8 62.9 62.9 62.8 62.7 1996 62.7 62.9 63.0 63.0 63.0 63.2 63.3 63.3 63.4 63.5 63.4 63.4 1997 63.4 63.4 63.6 63.7 63.8 63.7 63.9 63.9 63.9 63.9 64.1 64.0 1998 64.0 64.0 64.0 64.1 64.1 64.0 64.0 63.9 64.2 64.1 64.2 64.3 1999 64.4 64.2 64.2 64.2 64.3 64.2 64.2 64.2 64.2 64.3 64.4 64.4 2000 64.6 64.6 64.6 64.7 64.4 64.5 64.2 64.2 64.2 64.2 64.3 64.4 2001 64.4 64.3 64.3 64.0 63.8 63.7 63.7 63.2 63.5 63.2 63.0 62.9 2002 62.7 63.0 62.8 62.7 62.9 62.7 62.7 62.7 63.0 62.7 62.5 62.4 2003 62.5 62.5 62.4 62.4 62.3 62.3 62.1 62.1 62.0 62.1 62.3 62.2 2004 62.3 62.3 62.2 62.3 62.3 62.4 62.5 62.4 62.3 62.3 62.5 62.4 2005 62.4 62.4 62.4 62.7 62.8 62.7 62.8 62.9 62.8 62.8 62.7 62.8 2006 62.9 63.0 63.1 63.0 63.1 63.1 63.0 63.1 63.1 63.3 63.3 63.4 2007 63.3 63.3 63.3 63.0 63.0 63.0 62.9 62.7 62.9 62.7 62.9 62.7 2008 62.9 62.8 62.7 62.7 62.5 62.4 62.2 62.0 61.9 61.7 61.4 61.0 2009 60.6 60.3 59.9 59.8 59.6 59.4 59.3 59.1 58.7 58.5 58.6 58.3 2010 58.5 58.5 58.5 58.7 58.6 58.5 58.5 58.6 58.5 58.3 58.2 58.3 2011 58.4 58.4 58.4 58.4 58.4 58.2 58.2 58.3 58.4 58.4 58.5 58.5 2012 58.5 58.5 58.6 58.5 58.6 58.6 58.5 58.4 58.6 58.8 58.7 58.6 2013 58.6 58.6 58.5 58.6 58.7 58.7 58.7 58.6 58.6 58.2 58.6 58.6 2014 58.8 58.8 58.9 - - - - - - - - - (Bureau of Labor Statistics, 2014) (Bureau of Labor Statistics, 2014) The data in the above shown table and its graph shows the employment-population ratios and is arrived at after excluding individuals less than 16 years of age. Interpretation Looking at the table and graph above, we can surely conclude that Economy of the United States has faced severe ups and downs in the last three decades. The data extracted relates to the years 1983 to current year 2014. Having a glance from the year 1983, we see there is a sharp increase in the employment rate up to the mid of 1990. The employment rate during this period increases from 57.2 to 63.1. But from this point, it is evident from the graph that it faces a severe and sharp decrease as the rate goes down from 63.1 to 61.9 in a short period of only two years. After facing such decrease the rate again starts improving and reaches the top most rating attained in these three decades with a slight fall for 10 months in the year 1994. In April 2000, it attained the top rating of 64.7 and then started to decline. This decline caused the employment rate to reach 62.4 in 2004 which remained almost stable up till 2007. After the mid of 2007, the conditions got worse and the employment rate got so damage that it could not recover up till current year 2014. It decline very sharply from 62 to 58 and is still in the 58s. However, the Great Recession phase having ended, people are now able to get jobs easily. Analysis Increase and decrease in the employment rate has numerous causes which include high rate of literacy but no sufficiently good industry structure, low demand for labor and many more. Economy of the United States has also faced many problems since 1970s. United States has sustained some merchandise trade deficits with some other nations since 1976 and some current accounts deficits since 1982. These factors affected the employment rates as the economies sector got worse for such reasons. Still the United States managed to have fair enough employment rates before 2007. The severe crisis and recession phase of the economy started in the 2007 and hindered a lot the employment rates. Involvement in wars in many countries has significantly affected the United States’ economy since 2001. Sharp crises, the Great Recession in the United States, of the mid 2007 made the conditions worse but the economy is now recovering and showing many positive results in many sectors. From 2009 to the 2013, after having followed the Great Recession phase, the jobless recoveries problem emerged and in record levels in long-term unemployment was the result. As of January, 2010, there remained more than 6 million labor forces searching for work for longer than 6 months. This largely affected the older workers. Soon as, in the United States, the recession ended in June 2009, the immigrants have found 656,000 jobs, while the U.S.-born workers, on the other hand, lost more than a million jobs. The official unemployment rate, in April 2010, was 9.9%, but the broader U-6 unemployment rate provided by the government was 17.1%.From the period February 2008 to February 2010, the total number of workers who are working part-time for economic reasons has jumped from 4 million-8.8 million, showing an increase of 83% in part-time workers during the mentioned period of two-years only. By 2013, although the rate of unemployment fell down below 8%, the continued declining income of household, the record long term unemployed proportion and new federal budget cuts remained to be indicative of jobless recovery. The unemployment rate in U.S., after remaining high in the postwar period, got down below the unemployment rate of the rising eurozone in the mid of 1980s and has still remained significantly lower. By 1980, over between 25% and 30% of Americans were employed in industry, 65% in services, and below 5% in agriculture. Female unemployment was fairly low compared to Male unemployment (7.5% vs. 9.8% in 2009). The unemployment among African-American remains to be much higher than Caucasians unemployment (at 15.8% vs. 8.5% in 2009). In July 2009, the rate of youth unemployment was 18.5%, which, since 1948, is the highest July rate. The rate of young African Americans unemployment remained to be 28.2% in May 2013. Detroit’s unemployment rate, officially, is 27%. However, the Detroit News suggests nearly half of the working-age population in this city may be unemployed. References Amadeo, K., (2013) Types of Unemployment, Retrieved from: About .com U.S Economy Beggs, J., 2014, Labor Force Statistics from the Current Population Survey Bureau of Labor Statistics, (2014) Hughes, J.J. & Perlman, R. (1984), The Economics of Unemployment: A Comparative Analysis of Britain and the United States, Cambridge University Press Mumtaz, M. (2010). Introduction to Economics and Finance (2nd edn.) Read More