Unemployment is a matter of regular economic concern in the United States. Since 2008, the global financial crisis has been treated as the main factor of the shrinking employment rates in the country. At present, the percentage of the unemployed population in the U.S. has slightly decreased. Nevertheless, economists express controversial opinions as to whether these changes can be regarded as the sign of improvement. Obviously, it is too early to say that the American labor market is recovering. Changes in unemployment rates are too insignificant to create a stable and promising trend. President Obama says that the government slows down the implementation of labor market reforms. The U.S. will hardly achieve any tangible improvements in its employment situation in the nearest time.
Unemployment remains one of the most popular topics in economic research. Its popularity is justified by the fact that unemployment has considerable impacts on the overall state of economy and the financial health and wellbeing of individuals and families. Some citizens want to know whether they will manage to keep their jobs tomorrow. Some others hope that tomorrow will finally give them a chance to find decent employment. Every society seeks to reduce the rates of unemployment by all possible means. Overall, U.S. government treats every person who is looking for a job but currently does not have one as unemployed (Krugman & Wells, 2012). The rate of unemployment is calculated as the percentage or number of unemployed people against the entire labor force (Krugman & Wells, 2012).
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At times, it seems that zero unemployment rates could create a perfect economic situation in the country. In reality, the best sign of stability and high levels of wellbeing in the economy is the so-called “full employment”, when everyone who wants to have a job has one (Krugman & Wells, 2012). Unemployment rates can never be zeroed. Instead, governments should focus on implementing strategies to help the society achieve and sustain full employment rates.
The rates of unemployment in the U.S. constantly change. According to Searcey and Weisman (2014), unemployment rates in the U.S. in September were 5.9 percent compared with 6.1 percent in August. The Bureau of Labor Statistics (2014) provides more recent data, suggesting that the rates of unemployment in October were lower than in September – 5.8 percent. The most significant were the changes in nonfarm payroll employment, where 214,000 new jobs were created (BLS, 2014). Meanwhile, the number of the unemployed in the U.S. remains particularly high – 9 million Americans are currently looking for a job (BLS, 2014). Moreover, racial, ethnic, and social disparities in the labor market continue to persist. BLS (2014) confirms that, while the unemployment rates for whites have substantially declined, the rates of unemployment in other population groups, including Blacks and Hispanics, have changed little. As of today, almost 11 percent of Black citizens do not have any job, and even the recent changes in the labor market do not promise any serious improvements for ethnic minorities in the U.S. (BLS, 2014)
One of the basis questions is what type of unemployment makes the situation in the U.S. labor market so complicated. Krugman and Wells (2012) make a distinction between frictional and structural unemployment. The former covers the number of workers, who spend their time looking for a job. Even the most perfect labor market has some level of frictional unemployment, and it is unavoidable. One reason why frictional unemployment is always here is because the processes of job creation and destruction are continuous (Krugman & Wells, 2012). Also, the national labor market is open to new workers, who constantly join the labor force (Krugman & Wells, 2012). Frictional unemployment is inevitable, but it does not cause any serious effects on the labor market and the economy, in general. By contrast, structural unemployment means that the number of job seekers exceeds the number of jobs available in the market (Krugman & Wells, 2012). It is structural unemployment that hinders economic growth in the United States. As of today, the number of those who want to work is much higher than the number of jobs they can take. The current government is either reluctant or incapable of changing the situation.
Media professionals express controversial opinions about the most recent changes in the unemployment situation. Searcey and Weisman (2014) cite President Obama, who blames Republicans for creating obstacles to reforms that could improve the lives of ordinary Americans. According to Schwartz (2014), the pace of job creation is slowing down. It raises discontent and disagreement in ordinary Americans, who doubt that the labor situation will improve any time soon. Efron (2014) goes even further and says that the real unemployment rate in the U.S. is 12.6 percent; it includes employees who work part-time for economic reasons and those, who are marginally attached to labor force. The latter want to work and are free to work but cannot find a job. Regardless of the actual unemployment rates, it is clear that the country’s movement to full employment will be long and thorny. New jobs alone will never improve the situation. The Economist (2014) is right: supply-side reforms are needed to speed up labor market recovery. Job restructuring, education and training would be particularly helpful. However, the government will also need to review its macroeconomic decisions and their effects on employment.
To conclude, government agencies report that the rates of unemployment have slightly decreased. New jobs are created to accommodate the needs of the labor force. Yet, the situation is not as bright as depicted by the government. Structural unemployment prevails. The number of those who want to work exceeds the number of available jobs in the labor market. Racial and ethnic disparities in the labor market continue to persist: Black and Hispanic workers have fewer chances to find decent employment compared with their white counterparts. Supply-side reforms are needed to speed up the macroeconomic recovery. However, the unemployed will hardly see any light at the end of the employment tunnel in the nearest future.
- Bureau of Labor Statistics. (2014). Employment situation summary. BLS. Retrieved from http://www.bls.gov/news.release/empsit.nr0.htm.
- Efron, L. (2014). Tackling the real unemployment rate: 12.6%. Forbes. Retrieved from http://www.forbes.com/sites/louisefron/2014/08/20/tackling-the-real-unemployment- rate-12-6/.
- Krugman, P. & Wells, R. (2012). Macroeconomics. Granite Hill Publishers.
- Schwartz, N.D. (2014, 5 September). Job growth is sluggish, raising fear of malaise. The New York Times. Retrieved from http://www.nytimes.com/2014/09/06/business/august- jobs-report-released-by-labor-department.html.
- Searcey, D. & Weisman, J. (2014, 3 October). Jobless rate in U.S. falls below 6% as hiring picks up. The New York Times. Retrieved from http://www.nytimes.com/
