Economics - Addressing the Issue of Unemployment in the USA - Assignment Example

The unemployment rate accelerated from 9.7 percent to 9.8 percent in September 2009. The US economy had lost 7.2m jobs since the beginning of the crisis in 2007 and about 15.1 million people were looking for jobs. The worst hit was the construction sector, which witnessed as many as 64,000 job losses. The manufacturing and the retail sectors were no exceptions where the employer cut down were 51,000 and 39,000 respectively. In this scenario of joblessness, where the growth in the unemployment rate was showing a northward trend I had to come up with a policy to address the issue on a more serious note. There is no doubt about the fact that outsourcing enhances globalization and opens trade which has been proven to be beneficial for both the parties engaged in it but at the same time it reduces the number of jobs available to domestic workers. So a policy implication has to be made to stop the outsourcing of jobs.(Anderson and cavangh , 2004)

To overcome the unemployment issue in the country I have come up with policies, which would stop the outsourcing of work. The tax incentives given to the US companies which creates job overseas are to be ended and instead they are to be given to those companies which created jobs inside the nation, because not only it created jobs outside it also made the companies reduce their costs by not paying any American Taxes on their profits. The savings generated by the tax cut can be used to invest in companies that focus on research and development work in the home country in order to generate jobs besides encouraging innovations and competitiveness. Tax reform and procurement policies at all levels have to be undertaken which would ensure that the policy enhances the creation of good jobs in the domestic market. I had to cut down on the additional subsidies that the companies were provided with, which would make them create jobs overseas. The labor law also has to undergo a reform so that the restrictions on union organizing are withdrawn which would ensure that rules regarding the hiring of laborers are incorporated. Internationally recognized labor rights should be promoted and steps have to be taken to end the trade policies, which led to the destruction of the small-scale agricultural sector and the privatization of social services. Policies have to be taken up to ensure debt reduction and the development of old mechanisms. For this, the country will have to work with richer nations. (Anderson and Cavangh, 2004)

So these were some of the steps that I would like to take up to address the issue of unemployment in the country and thereby try to revive the country from the trap it has got into owing to the economic crisis that started affecting the nation in 2007 and took its worst shape in 2009 by giving the US economy its hardest blow.