The Unemployment Debacle, Term Paper Example

Introduction

This paper posits to explore a diversity of issues related to unemployment. One of the greatest problems that confront most nations is the rate of unemployment. All activities in life depend on the economic potentials of the society. The general wellbeing and the health of the nation is a factor of its production capability.  If the rates of unemployment for a particular nation are very high, then poverty is a common characteristic of the citizens of that nation (Jacobs & Helms, 1996).

Unemployment situation in southeastern Wisconsin

Considering the current nationally unemployment situation in southeastern Wisconsin indicates a situation of recession which is considered to be the worst in the generation. The graph below is a reflection of the existing scenario.

The increase in the rates of unemployment is rooted to the great depression which resulted to an economic depression on a global perspective after the Second World War. Its timing was variable in different nations and it is attributed to the sudden collapse of the stock market prices in the United States (Rifkin, 1995).

The precise definition of unemployment according to the Labor Statistics Bureau is unavailability of jobs for people who arte actively seeking for employment opportunities. It also implies to the people recently laid off (Rifkin, 1995). A more detailed definition of unemployment is economic scenario characterized by individuals looking for job vacancies.  The unemployment level is a factor of economic conditions plus other circumstances.

Calculation of the rates of unemployment is based on the total availability of the workforce and it is based on population survey. The rate of unemployment is always articulated as percentage as follows:

(Chiu, 1998).

Different categories and definitions of unemployment also exist. One category is the structural unemployment which implies the nature of unemployment arising out of the lack of demand of the available workers. Another category is the frictional unemployment that involves the movement of people between the existing jobs, locations of jobs as well as careers. The third common category is the cyclical unemployment that takes place in the situation of the movement of the rate of unemployment in the opposite direction to the growth rate of the GDP. A negative GDP in this case results to a high rate of unemployment (Chiu, 1998).

The global economy has a significant impact on the extent of job security considering the interlink that exists in the global economy. Fortunes among families, individuals and countries have drastically been altered with many people loosing places of work while in other countries, regulations have been altered. The loss of job is traumatizing, humiliating as well as distressful to the victim. This can only be cushioned through many baskets at the time of economic downturns.

The structurally unemployed person encounters some important challenges and when the situation at Wisconsin, with consideration of the issue of morbidity, an important effect of offsetting exists. With the occurrence of a long term unemployment which is commonly allied to some structural adjustments, the economy suffers some negative consequences in the long run (Chiu, 1998).

The people in this class may permanently quit the labor market and especially for the ones nearing their retirement. The skills and experiences that they posses are thus wasted as they age without meaningful occupation. The mitigation to this could be possibly a creation of jobs (Western & Beckett, 1999).

Innovation in technology has some consequences on the trend in the rate of unemployment. The advancement in technology facilitates higher production out of available resources. The available output may be produced at less cost and therefore the new products are substantially improved. This is a benefit to the community but on the other hand, it may adversely affect the demand of labor. Machines may be used to replace the human power that was initially in demand. However, in other instances, the demand for skilled labor to man the machines may be on an upward trend (Jacobs & Helms, 1996).

International trade and NAFTA play an important role in increasing or decreasing the rates of unemployment. According to the recent polling that were conducted, public attitudes on NAFTA whether good or bad were lacking. Majority of the people were dissatisfied with NAFTA (Western & Beckett, 1999).  The reason behind this was attributed to the perceived benefits to the business community at the time that the jobs plus the wages of the workers were exposed to some negative impacts. The Americans are for the idea that NAFTA posed more negative impacts as opposed to what was supported by the government officials in as far as the trade pacts were concerned (Jacobs & Helms, 1996).

The rates of unemployment are usually at varied degrees with diverse sections in the society. Men have always experienced higher rates of unemployment relative to women. This type of sex differential is attributed to hours differences coupled with sex segregation.

Individuals and society are exposed to some negative impact as a result of being unemployed. The entire society lacks the power of spending because the working class has exposure to little money to spend (Hirst & Thompson, 1999). On a national scale, high rates of unemployment may result to recession as well as depression in the economy. At this level, social effects are evident which may be characterized by high rates of crime due to the failure of meeting the basic needs. Financial problems in homes escalate which leads to the increase in the rates of divorce. Homeliness may also be on the increase (Jacobs & Helms, 1996).

In a practical sense, the likelihood of a full employment cannot be practical. While we appreciate the undesirability full unemployment, it is not practical and also desirable to encounter a situation zero rate of unemployment or full employment. The implications of the economists to full employment fail to account for the frictional employment and structural employment to a lesser degree. According to the economists, it is undesirable and impractical to achieve a scenario of 100 percent rate of employment in any economy (Ford, 2009).

The government, the Federal, State as well as local authorities should play a pivotal role in the fight against unemployment. The task of the government is to implement sound fiscal policy that is aimed at eradicating unemployment. A good example of the policy may involve the improvement of skills of the citizens coupled with the reduction of occupation immobility. The government policies should be tailored in a manner as to supply vital skills to the unemployed which in turn facilitate for their re-employment as well as increasing their incentives as they search for employment. The occupational immobility of the workers brings about a situation f structural immobility which can be cushioned through improving the training as well as education and thus raising the human capital (Hirst & Thompson, 1999).

The Federal Reserve and interest rates should also play a positive role towards the reduction of the rates of unemployment. This is based on the fact of the existence of a correlation of economic growth to unemployment rates and thus a link between inflation and growth and consequently employment (Jacobs & Helms, 1996).

The level of education in the society is an important factor in reducing the levels of unemployment. Education is associated with q very important benefit risks of unemployment are reduced in cases of higher levels of education. The cost of searching for the job for the first time as compared to searching for a new job while already working are lower for the case of people who are highly educated (Ford, 2009). Educated workers perform with efficiency relative to the uneducated ones and therefore, employs are only willing to hire the educated people.

Conclusion

A number of factors govern the trends of unemployment in any nation. The government plays a fundamental role in shaping the extent of unemployment for its citizens. Although the rate of employment cannot be maintained at 100 percent, it is the duty of the government to initiate and implement policies that will favor a great majority of the citizens are employed. Most of these policies should have a special focus on training and development of the existing workforce. The achievement of training and development increases the talent potential and the nation consequently becomes self reliant on the existing manpower for its economy.

References

Ford, M. R., (2009). The Lights in Tunnel: Automation, Accelerating Technology & the Economy of the Future.  Acculant Publishing.

Rifkin, J., (1995). The End of the Work: The Decline of Global Labor Force & the Dawn of Post-Market Era. N Y: Tarcher–G.P. Putnam’s Sons.

Hirst P. & Thompson G. (1999). Globalization in question. Polity Press.

Western, B., & Beckett, K., (1999). “How Unregulated Is the U.S. Labor Market?” American  Journal of Sociology 104, no. 4 1030–1060.

Jacobs, D. & Helms, R., (1996). “Towards a Political Model of Incarceration” American Journal of Sociology 102, no. 2 323–357.

Chiu, W. H., (1998). `Endogenous Adverse Selection and Unemployment Insurance’, Journal of Political Economy, vol. 106, 806-827.