The world has experienced an economic slowdown that has affected many economic sectors over the last couple of years.
One of the sectors that have been highly affected is the labor market. Many people have been losing their jobs since the organizations they work can no longer afford enough money to finance their salaries. Labor economics seeks to understand the dynamics in the labor markets.
Currently, there are several labor issues that have been of concern to organizations, countries and the world as a whole. This report will address the issue of loss of jobs and the increasing rate of unemployment.
Many people are jobless today compared to any other period in the past. The current situation is arguably the worst ever to be experienced.
In the United State of America, the rate of unemployment was at its highest in the year 2007. It reached a peak in 2010, but it has since started to increase (Associated Press, 2013).
It is said that the situation in the US is getting worse each day. The rate of unemployment in the US currently stands at 7.6%. It is a drop from last year, but there are still very many people actively looking for employment.
Labor participation is at the lowest since 1979. About half a million people are reported to have dropped from the labor force by 2013 (Associated Press, 2013). This creates an illusion that the situation has not shown any signs of improving.
The number of unemployed people could have increased due to several factors. To begin with, the population growth has increased.
This means that there are more people seeking jobs, yet the industries and organizations that can offer the jobs are growing at a much slower rate than that of the population growth.
Secondly, the rate of economic growth has been low. This business has been negatively affected. It means that the number of investments has decreased; therefore, not many job opportunities are being created.
Organizations are, instead, downsizing to reduce their level of expenses (New York Daily News, 2013).
The government has been doing its best to try and salvage the situation, but there is not much success as of now. The Obama administration has tried options such as the American Recovery and Reinvestment Act of 2009 (ARRA) that brought the issue of the stimulus bill.
The government has also tried the American Job Act. However, it is disappointing that none of the efforts is yet to bear tangible benefits. Currently, the world is in a period of economic recovery.
As a result, there are some improvements in the labor market, although they are still negligible (New York Daily News, 2013).
The topic of unemployment is important due to the impact that it has on the current economy. Very many people are unemployed. This has become an issue in the labor market, business administrators, managers, and national leaders.
When the rate of unemployment is low, businesses are also affected since people do not have money to spend. Business organizations start performing poorly. This becomes a concern to business administrators.
I, therefore, think that this topic is important because the causes of unemployment are discussed in details and the possible solutions are provided. This topic also gives business administrators the knowledge they might require to deal with the current situation in their organizations.
References
Associated Press (2013). Weekly US unemployment aid applications rise to 352K, a level consistent with modest hiring. The Washington Post. Web.
New York Daily News (2013). U.S. unemployment situation is getting worse and worse. New York Daily News.