The Effect of Unemployment on Policymakers - Case Study Example

Unemployment beckons policy makers Introduction A well thought out policy is essential to solve most of the problems in the society or an economy. The worsening situation of poverty and unemployment in the United States continues in spite of a nominal increase in employment following the financial crisis. The backbone of an economy is manufacturing jobs which continue to decline in the US leading to a reduction in the quality of employment which otherwise offered security and decent wages. The deterioration of the quality of jobs has paved way for the decline of health and retirement benefits. The effect of unemployment is hunger and homelessness that has evolved as a result of a system that gives importance to the profits of companies not considering the sufferings and need of humans. Thesis A policy shift or rather an aggressive measure to create jobs from existing industries and companies through various programs is urgently needed to solve the unemployment issues that has already evoked agitation among people due to poor financial and living conditions. The Problem The severity of labor slump can be understood from various factors such as the record period of time during which job opportunities have not recovered. Until October 2003, the number of payroll jobs declined by 2.4 million, a number less than that of the payroll jobs during March 2001. The working age population had increased to 3.4 percent in 2003 as against 1.8 percent in 2001 (Peterson). In July 2010, there are five unemployed person for every single job available in America. There is an increase in the number of people middle class population who are now forced to use welfare, food stamp and are homeless. Approximately 15 million unemployed Americans hope the agitation towards employment policies would change the mind of lawmakers to extend the out-of-work allowances. If it does not happen millions would continue to lose unemployment compensation that will result in more problems for the economy. Politics and Policies The increasing unemployment rate has created an impression that the Congress is not chalking out adequate policies to increase job opportunities and solve the debt crisis.   The repeated extension of unemployment allowances is a life preserver for the financially weak with depleting retirement accounts and makes a living with garage sales and extended family. The historic level of joblessness continues to fall with the failure of the Congress to act on the job issue. Policymakers are accepting the unacceptable. However, certain politicians object that there are adequate job opportunities even in a slow economy and that extended benefits are delaying action from the people to search for job and resume their career. Instead of making a policy to increase employment Republicans are supporting benefit extensions under the condition that funds can be withdrawn from other programs without affecting the deficit. The Congress has a history of offering benefit when the economy is under recession without calculating the long term problems (Barton). The claim of the Obama administration that there has been an increase in employment from March is a bleak report because the increase in non farm payrolls are less than 200000 to 300000 and more than 88000 of the newly employed were recruited on temporary basis. Together with this there is a decline in the average hourly wages. The American economy has produced less new full time employment which is required to keep up with the monthly increase in the labor market. Though there has been a slight increase in job opportunities in construction and manufacturing after the economic slowdown, unemployment reports indicate that there is no scope to bring down unemployment rate to the pre financial crisis rates for few more years. Further, the Obama administration is utilizing the economic slowdown to cause a permanent decline to the condition of workers. The standard of living of the working class is affected due to joblessness, reduction of benefits and wages. Despite corporate profits, unemployment rates have reached double digits causing a depression in consumer spending. The policies of the government are favorable to the financial elite to increase their wealth while majority of Americans continue to live in poor conditions leading to a widening social inequality. The American corporations that have registered profits after the economic crisis are mainly due to cost cutting measures that include ruthless downsizing and wage reduction. The government bail out of financial institutions has not changed the unemployment situation but has led to increased exploitation of the workforce. The plundering of public resources has driven structural imbalances with export surplus from China and Germany. The initiative of the United States to increase exports has in no way increased employment levels. The allocation of funds from state treasuries has actually resulted in safeguarding the financial position of the financially sound class while falling out on government measures to secure the financial position of the ordinary American people. The ambition to increase exports has further led to reduction in labor cost. The present policy makers have not drafted a clear framework for the recovery of unemployment. Only a revolutionary, socialist and internationalist perspective can bring some changes to unemployment levels by giving up the capitalist system (Grey). There has been no satisfactory measures from the policy makers to deal with the current situation. Recommended policy A socialist approach to solve unemployment is the need of the hour. The agenda should top with the creation of jobs from available employers and the reduction of FDI and outsourcing of jobs. The competition among deficit countries to increase exports is not a healthy step towards the recovery of economy because a jobless population does not have the option to consume products. The cost of inaction is the present problem with the American government. Other than the distribution of unemployment benefits and plans to boost GDP, there has not been a solid action towards the creation of job. The government should adopt measures not to worsen the unemployment problems by laying off public service workforce such as police officers and teachers. Long term unemployed population are the worst hit by unemployment because they are the last in the hiring process and undergo years of financial problems. The government policies should also include strategies to deal with the concerns of housing bubble and support workers doing low paying jobs. The Congress must create and expand employment programs as laid out in Jobs for America Act by allocating more funds for national service programs and support the TANF Emergency Funds to put people to work (Policy Responses to Long-Term Unemployment). Works Cited Barton, Paul. Congress And Americas Unemployment Crisis 2010 Available: http://www.capitolnewsconnection.org/news/congress-and-americas-unemployment-crisis Grey, Barry. Unemployment in America: No Economic Recovery for the Working Class Available: http://www.globalresearch.ca/index.php?context=va&aid=18552 Peterson , John Poverty and Unemployment in America Available: http://www.socialistappeal.org/usa/poverty_and_unemployment_in_amer.html Policy Responses to Long-Term Unemployment Available: http://www.americanprogressaction.org/issues/2010/06/long_term_unemployment.html Read More