Important Aspect Of Macro Economics - Essay Example

? Unemployment: Study of a very important aspect of Macro economics Table of Contents Introduction Analysis Conclusion References Introduction: Macroeconomics is one of the two important branches of economics. Microeconomics happens to be the other important branch. In Macro economics, national, regional or global level of economics is studied. The topics studied under the umbrella of macro economics include the study of inflation and deflation rates in the economy, employment and unemployment issues, and income, out put, GDP, and overall growth of national and global economy. The two papers selected for this essay are “Unemployment rises in every state” by “Conor Dougherty” which was published in Wall Street Journal in 2009, and “Who loses fro unemployment” by William Darity, Jr. and this paper was published in Journal of Economic issues in 1999. Both these articles talk about unemployment, and that is how these are related to study of macro economics. The purpose of this paper is to provide an insight over macro economic issues being discussed in these two articles. Analysis: Dougherty (2009) has discussed the existing situation of increased unemployment rates in the United States. As per the reports of Labor Department, recession of macroeconomic nature has hit all industries by now. Industries like housing and manufacturing have lost more jobs. West and Midwest of the United States has shown a steep decline in number of jobs being available in open market. In the northeastern states too, unemployment figures are growing steeply. As per the article, United States lost two million jobs from September 2008 to December 2008. The unemployment rate in 2008 December was 7.2% for the nation, but earlier on, the financial jobs were secure which are now losing ground like all other industries. Miami, Phoenix, Los Angeles and Las Vegas have experienced a decline in job opportunities available at an alarming rate. South Carolina and Indiana have seen a sharp rise in unemployment rate. Also, the states of Michigan and Rhode Island crossed 10% mark, which is the highest and the worst in the country. The paper in general is written in a way which is easily understandable for general readers. Dougherty (2009) has taken help from figures, facts and statistics to prove his point. He has clearly made his point that unemployment is on the rise in whole United States, and it is happening at an alarming rate. He is also given due importance to the policies current government of Mr. Barrack Obama is following. The paper is very much narrative in style. It has explained the existing situation and has pointed it out that it is a serious situation. Neither the causes nor the effects of this situation have been discussed in this paper. Looking at the population of America, it has grown steadily over past few decades. With a population growth rate of 0.963% (July 2011 estimate) a clear majority of American population is in the age where they need jobs. Source: https://www.cia.gov/library/publications/the-world-factbook/geos/us.html The above mentioned graph shows that most of the U.S. population is in the age group of 15-64 thus a clear majority of American population is ready to work, but unemployment has become a serious problem for them. Rates of unemployment have increased steadily over past few years. This has its own impacts over American population. Source: https://www.cia.gov/library/publications/the-world-factbook/geos/us.html The other paper under discussion here discusses the impacts of unemployment. Darity (1999) has opened his paper with a discussion about laborers who have highly irregular employment and he has discussed them from the point of view of Carl Marx as presented by him in 1967. Marx has discussed this population as surplus. The three categories of this unemployed surplus population include those who are able to work and who want to work and are actively seeking employment. The second category includes pauper children and orphans and then third category are those people who are not fit for employment or who are too heartbroken and not in a position to work full time due to mental or physical health issues. As per Darity, Marx has also mentioned that capitalism eats agricultural sector thus resulting in the loss of jobs for a lot of people. In most countries of the world, agriculture employs a lot of population with per capita production and income figures remaining low. Capitalism moves masses away from agriculture thus a lot of people who should be a part of active work force have to sit idle. Darity mentions that Marx has actually made 2 points. One, that the employed population gets disciplined. They are aware about the very few opportunities as offered for jobs and thus they make sure they do not have to lose their job. The second direct impact is that a huge number of work forces is available to be put to work. Capitalism results in these economic conditions and this is what Marx believed. According to Darity, the people who remain out of jobs for long suffer. The suffering is not only one way. First of all, without a proper source of income it is difficult for them to run their household expenses smoothly. The other issue is that after remaining out of job for long, these people might lose their skills. The biggest disadvantage is what he has termed as motivational decline. This decline not only leads to a psychologically upset youth but also results in higher crime rates. When the distance between the “have” and ‘have not” increases, the society practically takes steps towards psychological imbalance too. Surveys prove that racial imparities, spouse abuse, suicide trends all increase with the rise of unemployment (Garcia, 2011). Macro economics believes that when labor markets clear, employment is full. It is important that not only the economist look for solutions to economic problems of people but also pay attention towards the psychological health of people. This paper is written in a strong economic jargon which needs some economic studies background for the reader to understand. This paper has basically brought into limelight the issues which unemployed people face psychologically. When the gap between those who have all economic means increases with those who have no resources, society suffers a lot. Decline in mental health of people results in overall decline of a nation’s psychological health. It is not only about providing them with the financial resources. Governments usually pay attention towards helping out those who do not have any employment and thus need financial help to run their households (Schiller, 2009). However, most of the governments fail to realize the psychological impact of unemployment which might be passed on to the next generation in the form of depression and aggressiveness. Over all, due to increased unemployment it is not only the family without jobs who loses but it is the whole nation who pays the price of joblessness. Conclusion: Both the above mentioned papers have discussed a very important aspect of macro economics. In macro economics, economy and the problems it faces at global or national level are studied. Unemployment is one of the very important aspects studied under this umbrella. The first paper is statement of employment issues of the United States in 2009. The paper has presented through some facts and figures that unemployment is on a rise in the United States. The paper has mentioned that all industries and every state in the United States is losing more jobs. The second paper focuses on how joblessness has an impact over psychological development of a nation. If unemployment rises, the nation loses as a whole due to increase in crime rates, and increase is hopelessness. Unemployment is a macroeconomic problem which needs world’s dire attention at the moment. References: Bradley R. Schiller, “The Macro Economy Today,” New York: McGraw-Hill/Irwin [2009] CIA, World Fact Book. Retrieved on October 7, 2011 from https://www.cia.gov/library/publications/the-world-factbook/geos/us.html Conor Dougherty, “Unemployment Rises in Every State,” Wall Street Journal; A3, [2009] accessed on October 7, 2011 from http://online.wsj.com/article/SB123307958229020395.html Daniel, A. Garcia, “Recession, Depression, and Unemployment,” New Jersey; Nova Science Publishers. [2011] William Darity, Jr. “Who loses from unemployment,” Journal of Economic Issues [1999] accessed on October 7, 2011 from http://findarticles.com/p/articles/mi_qa5437/is_2_33/ai_n28733741/ Read More