Unemployment in the United States
Introduction
Rates of unemployment are usually low during seasons of economic prosperity and rise during recession. Unemployment in the United States can be measured in many ways. In the US an individual is identified as unemployed if they are jobless but have looked for employment for the last four weeks and can be available for work in case a job opportunity is found. Unemployment comes with its own consequences. The unemployment report is written on a monthly basis by the US Bureau of Labor and Statistics. This report is one of the indicators of the financial position of the country. The rate of employment and unemployment gives a snapshot of the strength of the country’s economy. The consequences of un employment in the US are both economical and non economical.
The last several decade in the US have been characterized by periods of unemployment and job loss. It is the belief of many Americans that employment stability in the country has reduced, job loss and unemployment are now a common feature in the country. Macroeconomic trends such as technological changes, foreign trade, shift in production and economic down turn have been associated with unemployment in the country (Brand, 2015). These macroeconomic factors combine with firm level factors to influence the level of unemployment in the country. Economic losses as a result of unemployment occur across all demographic categories and across all industries.
Unemployment greatly affects the economy. When the rates of unemployment increase the Federal and State governments pay increased benefits to its citizens. In 2017, the unemployment rate in February was about 5%. Unemployment benefits which include food benefits and medical aid costed the nation $2.96 billion in that one particular month (Gleeson, n.d). Increases benefits end up hurting the economy since the country is forced to borrow money to pay off these benefits. Both the Federal and State governments are forced to differ in their spending or cut on costs in their budget or postpone future economic plans. The income tax collected by the government also reduces since the number of employed citizens reduces with unemployment.
Unemployment is very dangerous for the economy of the United States. Over 70 % of what the United States produces is used for personal consumption and for the unemployed citizens, and the individuals receiving government support cannot spend to prior levels. When employment rates are high the GDP of the country reduces and this alters the allocation of resources of the country (Gleeson, n.d). Companies in the US pay a high price for unemployment. Unemployment benefits are financed largely, when unemployment is high in the states the government tries to make up for its spending on the unemployed by highly taxing the businesses.
Long time unemployment not only impacts the economy but the citizens of the country. Having a job is one of the elements of living a happy life. In 2009, the United States was faced by the highest level of unemployment that had not been seen again since 1982-1983, rates in the states were exceeding 10%. The unemployment rate in January that year was 7.7% and in December the unemployment rates had increased to 10%. In the same year Nevada registered the highest increase in unemployment rates, from 9.6% in January to 13% in December (Pharr, et al., 2011). This state had the highest level of unemployment. Unemployment has a great impact on the mental health of individuals. The unemployed individuals register higher levels of mental health problems such as depression and anxiety. Unemployed citizens register the highest admission into mental health institutions. These individuals also register the highest number of people with chronic diseases such as cardiovascular diseases and hypertension (Pharr, et al., 2011). Research has verified that unemployment is a major cause of depression. A study conducted in Nevada using secondary data from BRFSS in 2009 ascertained that unemployed individuals are highly affected by mental disorders.
There are many negative effects of job loss that are seen in the family of a worker who is unemployed. In the United States negative effects of job loss on children have been limited to the male parent who is the father (Kalil & De Leire, 2002). Parents lay off from work often affects the grade retention of the children in school. Children of unemployed parents rarely finish high school. Job loss and unemployment that stretches for a longer duration of time has the capability to affect the overall life of a child through family stress and reduced incomes. Employment has dire social consequences such as poverty, debts, homelessness, increase in property related crimes, stigma and social isolation. These social problems worsen as the duration of unemployment increases. Unemployment is among the major reasons that there is poverty in the US, Unemployed people experience a decline in their standards of housing, diet and healthcare. United States is one of the most prosperous nations in the world but as result of unemployment about forty three million people are living in poverty (Mark, et al., 2018).
Unemployment is costly even when the unemployed individuals are receiving unemployment benefits. Workers who stay away from the field of work can lose some of their job skills and may even find it harder to find a job (Nichols et al., 2013). Unemployment also has less serious consequences such as, during recession people are forced to take jobs that are available. College and university graduates who are new in the job markets during this season are forced to take jobs that are below their academic level and low paying jobs for them not to remain unemployed. This might be better than being unemployed but lower wages and slow career development can continue for a long period. Research conducted shows that, graduate who enter the job market when the rate of unemployment are higher experience a slow career development even after a long period of time since the time they entered the job market while graduates who enter the job market while the economy is at the peak and rates of unemployment are low experience fast career growth (Nichols et al., 2013).
Unemployment is one of the causes of a declining income and a decline in consumption of products and services. Longer durations of unemployment have directs impacts on the family resources which increase with every week of unemployment. In the Great recession, the incomes of majority of the family fell up to 40% and more for long time unemployed workers. In 2011, the long term unemployed workers were almost as twice as likely to be poor as those who have not been employed for less than six months and almost four times poor than as those who have never had a single job in their life. About three of every four parent who is raising a family single handedly and were unemployed for more than twenty five weeks were became poor in 2011 (Browning, & Crossley, 2001). After a period of six months of unemployment for a member of a family the consumption of the family falls by 16% and by 24% if the unemployed member of the family was the sole bread winner of the family (Browning, & Crossley, 2001). Unemployment is one of the causes of consumption fall in the United States.
Unemployment also impacts later wages. After enduring a period of unemployment, reemployed workers earn less of what they used to earn in their former employment life. This wage loss is as a result of longer durations of unemployment and the less favorable labor market conditions prevailing in the US (Brand, 2015). When people are laid off from their jobs as a result of mass lay off they lose twice as much in their life time earnings. In the United States unemployed workers are more likely to leave the task force.
Conclusion
Unemployment is the state of being jobless but one has the ability to be employed. Unemployment in the United States has both economical and non economical consequences. Economical consequences such as a reduced GDP and losses that are incurred by the Federal and State government as they pay off unemployment benefits. Companies are greatly taxed by the government in order to compensate for the money it has used in catering for the unemployed. Unemployment has been named as one of the causes of mental health problems and chronic diseases in the country. Examples of non economical consequences are increase in poverty rates in the country and increased rates of crime.
References
Brand, J. E. (2015). The far-reaching impact of job loss and unemployment. Annual review of sociology, 41, 359-375.
Browning, M., Crossley, T. F., & Winter, J. (2014). The measurement of household consumption expenditures. Annu. Rev. Econ., 6(1), 475-501.
Gleeson, p. (n.d). The Overall Effects of Unemployment. Retrieved from; https://smallbusiness.chron.com/overall-effects-unemployment-37104.html
Mark, P., William, D., Darrick H, & Khaing, Z., (2018). A Path to Ending Poverty by Way of Ending Unemployment: A Federal Job Guarantee. RSF: The Russell Sage Foundation Journal of the Social Sciences, 4(3), 44-63. doi:10.7758/rsf.2018.4.3.03
Nichols, A., Mitchell, J., & Lindner, S. (2013). Consequences of long-term unemployment. Washington, DC: The Urban Institute.
Pharr, J. R., Moonie, S., & Bungum, T. J. (2011). The impact of unemployment on mental and physical health, access to health care and health risk behaviors. ISRN Public Health, 2012.
