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Reasons and Solutions for Unemployment in USA Research Paper

Unemployment provides statistical evidence of the economic health and performance of a Government and is defined as a count of the number of people who are not actively engaged in gainful jobs, have failed to secure a job in the last four weeks, but have the requisite energy and ability to work on the job they are looking for.

Despite the array of railing disputes on the target and specific causes of unemployment, sanguine researchers into specific causes of unemployment keenly point out a number of them.

The US Bureau of Statistics (BLS) details an analysis of unemployment conditions in the USA and causes of unemployment are presented with staggering figures. News Release (2010) supports its unemployment statistics from a variety of surveys conducted on different households and institutions that span nonfarm and privately employed workers.

By 2010, nonfarm employment level had settled at 9.6 percent with seasonal adjustments. The subsequent months to October of 2010, unemployment rates had hit a 14.8 million mark, a slight adjustment to the 9.6 percentage mark.

News Release (2010) provides a detailed report targeting both male and female employees. By 2010, the unemployment rate for able men was identified to be at 9.7 percent while that one for women had hit an 8.1 percent mark. On the other hand, 27.1 percent of the teenage population was unemployed while whites registered 8.8 percent unemployment and blacks registered 15.7 percent unemployment rate (Kitov, 2006).

On the other hand the Labor Force Statistics from the Current Population Survey (2009) argues that the unemployment rate for other sectors such as the mining sector experienced a temporary decline over the same period in October 2010. However, the slight improvement on employment over the same period was not reflected in all sectors of the economy.

By the same period, a decline in government employment was registered. Additionally, News Release (2010) statistical data highlights reasons for unemployment for different categories of unemployment reasons. These classifications include employees who left or lost their jobs and those who made reentry into their previous jobs.

Further evidence on the grim prospects of the levels of unemployment is fueled by indicators that facilitate the speculations that the economy is stagnant (Labor Force Statistics from the Current Population Survey, 2009).

Based on the statistics discussed above and other credible sources, it is evident that unemployment levels are ever on the rise the US economy. Among the contributing elements is the population explosion of the United States.

Thus the unemployment component expressed as a variable of the degree of unemployed persons against the available labor force in the market correlates strongly with the population density for frictional, structural, seasonal, cyclical, and residual unemployments.

Population as a cause of unemployment relates to the ratio between unemployed and the population density. The higher the population, the higher the level of unemployment expressed as a ratio of the actual population.

Besides high levels of population evidenced from the movements of people from different parts of the world to the USA, inflation has been identified to significantly contribute to high unemployment rates. This is based on the concept of stagflation. Stagflation bears a relationship with aggregate demand and aggregate supply, variables that behave inversely to the Philips curve.

The accumulated effect of inflation on employee retention is that companies find it exclusively expensive to maintain employees at their jobs and opt to lay them off to offload associated costs of maintaining them. In addition to that, inflation raises the cost of production directly appreciating the cost of goods and services while diminishing customer purchasing power.

A rise in the amount of supply of money in a nation is directly related to higher inflation levels causing companies to find it unwise to invest in human capital to facilitate their economic activities.

Among the profound causes of unemployment is trade balance. Trade balance is a concept that defines the trend in trade in terms of the differences between a country’s exports and imports. The gap between imports and exports in the US economy has experienced a drastic rise over the years. It is evident that Chinese firms have favorably tilted the balance of trade to their side gaining overwhelmingly on the US market.

Based on the aggregate supply curve, the relationship between unemployment and income per capita as a function of National income(Y) indicates a strong relationship with the rising level of unemployment in the USA. That notwithstanding, the consumer price index has also significantly impacted on the level of unemployment in the country.

The levels of price have a direct relationship with inflation and the buyer buying behavior and ability. This is based on the inflation as a variable for measuring the level of economic performance of the US economy in relation to varying price levels.

Valletta (2005) argues that American firms have over time been facing fierce competition from firms of other countries that offer cheaper products and services. Significant to this is the resulting loss of a considerable pie of the market and profits resulting in reduced employee force and unemployment in the long term.

The concept of lean manufacturing emphasizes on optimum use of resources and other manufacturing strategies targeted at higher profits at minimum operating costs. This concept has had its way on the approaches and strategies organizations employ in running and restructuring organizations.

Business organizations have found themselves compelled to adapt to flat organizations to reduce costs associated with tall organizations and optimize on profits.

De-layering has had an adverse effect on employee retention within these companies and the resulting consequences have been to lay off some employees. While these unemployment variables have had their toll on the level and rate of unemployment in the United States, technology has come with a rude shock (Valletta, 2005).

Known as technology unemployment, this approach fosters the use of automation in manufacturing and service provision processes that play the role of a trained and skilled employee. Technology consumes significantly far less resources in the form of maintenances requirements without the associated costs incurred as wage bills for human employees.

The element of multitasking, an element that is strongly encouraged by most American companies increases the level of unemployment (Kitov, 2006). Multitasking is a concept where individuals can take up more than one job that could be taken up by other people. This hampers productivity though it comes with the benefits of job rotation and job enrichment, a motivational element in growth and personal development.

Policy formulations related to monetary policies that have their genesis on rising duration adversely impacts on wage pressures creating an upward or downward trend for any particular unemployment rate (Valletta, 2005).

To appropriately address the myriads of problems associated with the unemployment levels demands a keen evaluation, identification, and analysis of the unemployment situation and related variables before implementing the solutions.

One of the approaches is to tackle the adverse economic effects of a surging population. While a country cannot stay soundly developed if it adopts negative population policies that undermine the transfer of skills and expertise from different parts of the world, the US needs to design and implement policies that target illegal migrations into the country.

On the other hand, a country cannot develop with a diminishing population. A lean population may have adverse implications on the availability of sufficient labor and appropriate manpower for sustained development and economic growth.

Therefore, the current level of population needs to be maintained while illegal immigrants that may be counted as noise variables when calculating the actual level of unemployment should be controlled (Valletta, 2005).

In addition to the above control, it is recommended that measures to curb high inflation rates and currency depreciation should be implemented by appropriate use of monetary mechanisms to steer the currency from further depreciations in the local and international market, despite the benefits that come with a weaker currency.

While domestic consumption may not offer adequate solutions to unemployment problems, US companies need to revise their strategies in relation to competing firms who may be tagged as emerging threats particularly from India, China, and Brazil.

US companies should establish strong economic and business relationship with emerging markets particularly found in Africa. In addition to that, people should be intensively trained in the use of new technologies to avert the problem of technology unemployment.


News Release (2010). . BLS Bureau of Labor Statistics, US Department of Labor. Web.

Kitov, I.O. (2006). . Web.

Labor Force Statistics from the Current Population Survey (2009). . Bureau of Labor Statistics. Web.

Valletta, R.G. (2005). . Web.

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