According to the Bureau of Labor Statistics, the total payroll employment increased by 223,000 in the month of June, causing a decline of 5.3 percent in unemployment rate in the United States (Bureau of Labor Statistics, 2015). More people were employed in various industries including healthcare, business services, retail trade, transportation and warehousing, and in financial activities. Even though the rate of unemployment in the United States has dropped significantly in the recent past, the number of qualified workers who are unable to find full-time job still remains high (Bureau of Labor Statistics, 2015). This paper analyzes the major causes of unemployment in the United States. It also reviews how unemployment is distributed across groups, industries, and occupations within the United States. Additionally, this paper identifies the consequences of unemployment in the United States as well as what the government should do to address the problem of unemployment.
Many economists are in doubt about whether the problem of unemployment in the United States will ever be solved. These people base their argument on the fact that the main causes of unemployment in the United States continue to persist and they are not likely to end any soon. The long-term unemployment in the United States occurs as a result of five reasons. First, there are too few job openings in the United States to match the number of skilled workers. The number of job openings in the United States began to decline after the national financial crisis of 2008. Following the crisis, the number of new job openings in the United States dropped to less than 3 million. This represented a 1.5 million decrease from the 4.5 million openings that used to exist before the crisis (Jacob, 2011).
It is anticipated that the long-term unemployment in the United States will continue to persist due to lack of real growth in industries. According to the United States Congress (2013), even though the Bureau of Labor Statistics continues to report a decline in unemployment rate in the United States, no new types of jobs have been created in the country, yet new graduates with completely new skills enter the job market almost every day. This means that the number of unemployed people in the United States will remain high until when new types of jobs will be created to keep up with the rising population. Additionally, many people in the United States have succeeded to get employment, but they lose their jobs due to high rates of government sector layoffs. Several companies owned by the United States government consider job layoffs as the best method of minimizing operation costs during hard times. Unfortunately, they tend to ignore the fact that they are contributing to the rise of the unemployed people in the country (Jacob, 2011).
The United State faces stiff competition from other developed and developing countries as far as job creation is concerned. For instance, China is creating more job opportunities than the United States, which makes qualified workers to leave the country for China. These workers are attracted to China due to the low labor costs in the country. Eventually, majority of workers who remain in the United States are unable to meet the job requirements and they are therefore left without employment. Rapid job growth in other countries is slowly eating the United States economy millions of dollars which are directed to the rest of the world (Jacob, 2011).
Another reason for the high unemployment rate in the United States is the high taxes charged by the federal government on businesses. According to ( ), the United States charged very high taxes on businesses, which literally pushes companies out of the country. As these companies leave the country, job opportunities are also reduced and the number of unemployed persons increases. These causes of long-term unemployment in the United States are observed across different demographic groups, industries, and occupations (Jacob, 2011).
However, the problem of unemployment is experienced differently across various demographic groups, occupations, and industries. For instance, less educated persons and those from minority groups experiences higher incidences and longer unemployment durations. As the United States Congress (2013), points out, the rate of unemployment among young people is always higher than that of adults. For example, the rate of unemployment among people aged between 16 and 24 years rose to 19.6 percent in 2010 while that of adults aged 35 years stood at 11.7 percent. Conversely, the rate of unemployment among older adults was at 6 percent. Additionally, the rate of unemployment in the United States differs across racial groups, with higher rates being experienced by blacks than whites.
Although long-term unemployment has been observed among workers across all levels of education, the rate of unemployment is higher among workers with high school qualifications than among people with diploma, undergraduate, and Masters Qualifications. Workers with post graduate degrees experience low rates of unemployment in the United States. Unemployment rate in the United States also differs among male and female workers. The unemployment rate among male workers is roughly 50 percent while that of female workers is approximately 25 percent. This is a clear indication that the rate of unemployment is higher among males than among females.
The rate of unemployment varies across industries and occupations just in the same way as it is across demographic groups. According to the United States Congress (2013), the construction industry experienced the largest increase in unemployment following the financial crisis of 2008. Other sectors which experience high employment rates include mining, business services, information, health care, and manufacturing sectors. Some of the occupational categories which have suffered long-term unemployment rates over the recent past include construction, transportation, and natural resources. The fact that unemployment problem is experienced across demographic groups, occupations, and industries, it can be concluded that unemployment brings about negative impacts on the United States economy.
Unemployed persons have a big problem accessing basic needs such as water, food, shelter, and housing. They cannot purchase items like their employed counterparts. Additionally, unemployed people cannot pay taxes like the employed persons do, and this poses a big challenge to monetary and fiscal policy makers. The huge number of unemployed people in the United States negatively impacts growth and development. There is therefore great need for the government to take steps towards reducing and completely eliminating the problem of unemployment in the country.
The United State government can address the problem of unemployment in a number of ways including improvement of economy, providing support to workforce training, improvement of technical and community college, and through enhancement of job search. The best way through which the United States government can improve the economy is by enacting policies which will foster job creation. If additional jobs are created, the economy will be strengthened and the overall demand for workers will increase. New employers will hire more workers and the problem of long-term unemployment will no longer exist. These policies will also encourage infrastructure investment which will contribute to rapid growth and productivity.
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