Unemployment In The United States

A great seventeenth century philosopher, Thomas Carlyle, once stated “a man willing to work, and unable to find work, is perhaps the saddest sight that fortune’s inequality exhibits under the sun.” In fact, since the creation of macroeconomics, the insidious problem of unemployment has perplexed even Nobel Prize winning economists on what would be the most effective polices by which governments can implement to quell this pervasive and incessant problem. In the United States alone, many of the individuals who lost their jobs during the Great Recession of 2009 are still unable to find work in today’s economy. Following the period after the recession, the unemployment rate has remained higher than each of the four most recent recessions in American …show more content…
However, even more pernicious than the failure of economic policy for solvency, are the adverse effects that unemployment has rendered individuals of historically oppressed groups. People of color, particularly, have habitually felt the brunt of unemployment in recent years, which continually causes the vicious cycles of poverty within this demographic, even with government assistance. Hence, this paper seeks to analyze how exactly unemployment remains to be a volatile problem even with efficient government policies. Furthermore, this essay will provide holistic analysis of the fundamental nature of unemployment, the effect of unemployment on systemically oppressed groups, and the methods governments have employed to combat this unceasing problem.
Unemployment is defined as the state in which an individual who is looking for work is unable to find work (Investopedia). However, in the purview of an economist, the definition of unemployment is not as simple. The Bureau of Labor Statistics breaks down the problem of unemployment by dividing unemployment into three …show more content…
The government plays several roles regarding the stimulus and regulation of the labor market. The first and perhaps most common method by which a government can prevent and reduce unemployment is through fiscal policy. Fiscal policy seeks to reduce unemployment by increasing aggregate demand and overall economic growth. The government usually does this through expansionary fiscal policy. Expansionary fiscal policy is defined as an increase in government spending or a reduction in net taxes aimed at increasing output. (Case 545) In practice, governments often cut taxes significantly in conjunction with considerably increasing government spending. This in turn, as evidenced by figure 1.2, creates an increase in the aggregate demand within an economy. With an increase in aggregate demand, the economy will also see an increase in Real GDP. Thus, leading to firms producing more, and an overall increase within the demand for workers within the economy. However, this method is not the ‘kill all’ for rectifying the unemployment problem. In fact, the effectiveness of expansionary fiscal policy is bound to the whims of the market in so far as if consumer spending is still low following this type of policy, the labor market will not see the desired effect that it is looking for. If fiscal policy isn’t enough, the government

Show More