The rise in unemployment in U.S
Unemployment refers to a situation where people willing and able to work cannot find jobs (except for the old, children of school age). This is brought about by various factors which includes;
Unemployment and Underemployment, this is attributed to various market imperfections interfering with the factor prices hence preventing full employment of resources. For example trade unions and other government interventions interfere with the labor market pushing up wages above their natural rates. This makes labor expensive thus reducing its demand. In the case of capital, the government gives subsidies on investment designed to increase rate of investment in an economy. Such subsidies make capital cheap compared to labor.
Unemployment is also caused by technology; a technology used in America is so advanced that when one is not well versed with the current technology it will render him/her unemployed.
Population Growth Rates has also led to the issue of unemployment in US where the rates are very high annually.
Economic growth is another factor in that when economic growth does not keep pace with growth in the labor force, there is large-scale underutilization of labor because its demand is less than the supply. Efficient use of available resources has significant effect on econ growth of a country.( bad investments and mismanagement.)
America currently is facing a problem of Job Selectivity whereby majority of the population are choosy on what job to involve in. This has created a paradox where on one hand the country is acutely short of unskilled labor in say agriculture while on the other hand thousands of unskilled labour is in urban areas seeking white color jobs. While unemployment is quite acute it is aggravated by negative attitude towards manual labor.
Seasonality of Jobs; In agricultural sector and construction industries employment is available during certain periods of the year e.g. planting, harvesting, construction so that those who are engaged become unemployed the rest of the year.
Skills imbalance or lack of it; Lack of skills for the available jobs cause unemployment. Many jobs in America is al about the skills in training that a particular person has that will determine whether they will get the job or not. In most cases due to technology advancement majority are not skilled enough to handle most of the jobs in the market hence rendering them jobless.
Natural Calamities; in the agricultural sector, natural calamities like drought and floods, cause unemployment
There are various types of unemployment which includes;
- Open Unemployment; This is a situation where there are no jobs for those who desire to work. People can be seen queuing to get casual jobs in factories.
- Under Employment; This is where due to scarcity of jobs people are forced to work for fewer hours than they would want.
Disguised Unemployment; This is a type of employment where the same output could be obtained by engaging fewer people. For example a whole family tills the same piece of land to obtain an output, which half the family could still obtain. Or employees employed full time in government offices could still render same services halftime. Income is not calculated so not taxed.
Seasonal or cyclic employment; People or labour is engaged during peak seasons like harvest time after which they become unemployed.
Casual employment; Hired labourers are engaged on temporary basis as and when needed.
Inferior Occupations; Lack of jobs force highly qualified people to accept odd jobs. University graduates accept clerical work for lack of jobs.
Hidden Unemployment; This is when labour is engaged in alternative activities for lack of employment. For example pursuing further studies due to lack of job at the level of education attained women in household chores and child rearing.
Retrenchment/Early Retirement ; Retirement age is falling and leaves energetic people jobless. Reforms in the civil service call for right sizing in bloated parastatals and ministries and large members of people are being retired early leaving them unemployed.
The impaired; Unemployment may be caused by impairment through malnutrition, disability or HIV/AIDS. Those who may work full time but are impaired through malnutrition.
Technological; The extensive use of machinery in place of human labour e.g. computers.
The higher the population and technological advancement in thee economy of America the higher the rate of unemployment in America.
Comprehensive employment strategy in this case will include;
Creating more appropriate labour intensive technologies of production; Reduce dependence on imported labour saving machinery and equipment from developed countries. Develop indigenous technological research and adaptation capacities in the developing countries themselves. Such may first be linked to the development of small-scale labour intensive rural urban enterprises. Focus on the development of low cost labour, labour intensive methods of providing rural infrastructure needs, including roads, irrigation and drainage systems, essential health and educational services.
Modifying the direct linkage between education and employment; The emergence of the phenomenon of the educated unemployed in America is calling into question the appropriateness of massive quantitative expansion of educational systems especially at the higher levels. Formal education has become the rationing tunnel through which all prospective jobholders must pass. As modern sector jobs multiply slowly than the numbers leaving school, it is becoming necessary to extend the length of the tunnel and narrow its exit.
Governments who are the largest employers could create economic opportunities in rural areas and it will become easier to redirect educational systems towards the needs of rural developments.
Creating an appropriate rural urban economical balance; A more appropriate balance between rural and urban economic opportunities appears to be indispensable to ameliorating urban unemployment problems. The main thrust in this activity should be in the integrated development of the rural sector. This is through spread of throughout the countryside and the reorientation of economic activity and social investments towards raising incomes in the rural areas.
Expansion of small-scale labour intensive industries; The composition or ‘product movement’ of output has obvious effects on the magnitude of employment. Since some products (after consumer goods) require more labor per unit of output and per unit of capital than others.
Efforts to expand these mostly small-scale labour intensive industries can be accomplished in two ways;
- i. Through government investment and incentives.
- ii. Through income redistribution either directly or from future growth to the poor whose structure of consumer demand is both less import intensive and more labour intensive than the rich.
Elimination of factor price distortions; there is evidence that collecting factor price distortion primarily through the elimination of various capital subsidies and curtailing the growth of urban wages would increase employment opportunities.
Reducing population growth rates. This is a principal means of ameliorating the employment problem in the long run for the simple reason that it will reduce the future number for job seekers. This strategy is indirectly achieved by the above (5) strategies since improving living standards for the very poor lowers the fertility rates.
Works cited
Employment in America; Edgar O. Edwards, Report on a Ford Foundation Study, Colombia University Press, 1974 – p10
Unemployment article by associated press http://www.nytimes.com/2010/02/05/business/economy/05econ.html