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Wealth disparity and effects of long-term Unemployment on the United States Economy - Essay Example

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In the article on New York times “The Jobless Trap” by Paul Krugman dated April 21, 2013, The US employment situation is explored and the wealth disparity consequence this has on the economy is equally discussed. …
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Wealth disparity and effects of long-term Unemployment on the United States Economy
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"Wealth disparity and effects of long-term Unemployment on the United States Economy"

Download file to see previous pages It is important to undertake a critical analysis of unemployment in respect of the article to establish the effects this has on the entire economy of US and any other nation.This article explores the varuios employment related economic issues. It is also importasant to note that the author gives a vivid description of the consequences of unemploymdent and the indirect challenges it will pose on the wealth disparity among citizens. 1.0 Introduction Unemployment is a situation where a person is able and willing to perform tasks or work but is unable to find a job. However, there is no clear definition of long-term unemployment. economists define a period of six to twelve months as a long-term unemployment period. This is when an individual is unwillingly unemployed. Several factors lead to long-term unemployment; some of these factors are facilitated by economic changes such as economic recession, an individual not willing to work or dynamic technological changes (Hollander,2011,45). Previously, the United States’ labor market had short periods of unemployment for most workers who were jobless; they would be easily absorbed into the labor market. Even though jobless workers especially the elderly had a long unemployment period, the level of long-term was less comparing to other countries. The rise in the long-term unemployment and unemployment rates has severe human, social, and economic costs. Wealth disparity, also known as wealth gap or inequality, refers to state of uneven distribution of financial assets among citizens of the United States of America. Wealth includes automobiles, value of homes, savings, investments and businesses. Those who have a great deal of financial assets have primarily acquired them by appreciation of fiscal portfolios. Hence, financial wealth involves mutual funds, stocks, as well as other investments. Thus, there is a greater wealth inequality than basic net worth disparities (Lubik, 2010,20). Statistics show that the top ten percent possess eighty percent of all financial wealth and the bottom ninety percent only hold twenty percent of all financial assets.Employment plays a vital role in determining the amount of economic wealth hence the observed disparity. 2.0 Discussion Unemployment is risky to the country’s economy and to other countries worldwide as well, with some costs of unemployment being levied to the society such as exchequer cost due to unemployment and social cost. While the short term unemployment may or may not have implications on an individual, long term unemployment may have a demoralizing effect to an individual. Long-term unemployment causes negative effects to individuals. Some of the most common effects include financial difficulties, health related diseases, psychological problems, boredom, idleness, losing close friends and relatives and eventually depression. Severe long-term unemployment results are mostly seen in the disadvantaged in the society. The unemployed are wasted resources, and they also waste resources meant for humanity. It is a life full of unhappiness and sorrow as unemployed individuals live in suffering and poverty; economically, human labor is devalued. The social results from unemployment lead to rise of rebellious groups, riots, family breaks, divorce and some cases of death (Hollander,2011,45). The impact of the recession shows in the United States and many countries where long-term unemployment majorly impacts the male. During the recession, construction and manufacturing industries were affected by unemployment. In the United State wealth, ownership has been concentrated in the small minority population due to their well grounded employment status. The minority ...Download file to see next pagesRead More
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