Causes of Unemployment in US - Research Paper Example

Unemployment in United StatesUnemployment is the extent of joblessness in an economy measured in terms of the unemployment rate. Unemployment is a significant crisis worldwide. Currently, the rate of unemployment in US is exceptionally high. The liberal and conservative commentators are reluctant in assessing the dramatic loss of American jobs. This reflects the poor government decisions and general recession. US have lost many jobs since 2000 because of the euphemisms for exporting well-paying jobs to the low-wage countries and relying on low wages without benefits.

The exorbitant unemployment rate relates to the economic downturns in US (Caporale 525).Causes of unemployment in USFinancial crisis and poor government decisions are prime causes of unemployment in US. The effects to the GDP legitimate supply and demand curves, where producers produce the goods, and consumers pay for those goods, indicates the increased growth in the economy where the total purchased goods reflect the GDP of a country. Purchase for most goods in the United States is through credit cards and may be paid later.

Statistics indicate massive accumulation of debts generating a partially artificial’ GDP. This has created large debts and bankruptcy with the lenders. The loss bearing in companies caused job cuts and layoffs (Caporale 530).The decline of lending institutions and banks that provided loans affected the automotive industry. As a result, significant losses resulted due to loss of market, labor procurement, credit crunch for the raw materials and unwanted products. This resulted to massive lay-off of employees.

Free trade results to foreign interest owning segments of private corporations and the public infrastructure in US (Proietti 458).The increased population leads to increase in the unemployment rate. The population increase in United States is higher than increase in employment opportunities. The fierce competition from other firms results to financial instability and closure of companies, hence lay-off of the employees. The increased automation of production facilities in industries has replaced the human labor with machines; technological unemployment.

The involvement in seasonal products causes lay-off after the season finishes. Many people in US depend on minimum wage of $6.55 per hour, which they get irrespective of the work done; hence, many opt not to work (Caporale 538).Effects of unemployment in United StatesThe larger part of unemployed in US experience mental problems. This affects the individuals, families, communities and the nation at large. Insufficient funds to pay rent results to homelessness and the increase in Medicaid due to increased behavioral changes.

Unemployed workers experience psychological problems frequently, causing the decline in the family. The parenting practices can be easily influenced, and depression in children affects them socially. The community experiences poor housing and underfunded learning institutions. Unemployment effects affect people differently, being common among the minority and elderly (Proietti 456).Solutions and Recommendations to UnemploymentSocial support to the unemployed mitigates the impact of the strain.

Establishment of legislation will establish a commission to examine issues of psychological insecurity in the workforce caused by the displacement of workforce. Allocation of funds to programs dealing with emotional needs of workers prevent long-term unemployment. Reauthorization and expansion of the temporary assistance among the needy families provides temporary assistance for the long-term unemployed (Caporale 543).Works Cited