Economic Challenges US Faced in the 1970s
The economic situation in the US during the 1970s was connected with the Great Inflation that was observed from the middle of the 1960s till the beginning of the 1980s (Bordo & Orphanides, 2013). The inflation of that period was horrible due to high demand and low supply ratings on jobs, houses, etc. Banking systems were not stable, and creditors could not provide people with confidence and stability.
The rise of inflation also caused the rise of the unemployment rate and led to stagnation. Unemployment was explained by the promotion of women workforce, the return of soldiers from the Vietnam War, and the increase of young baby boomers (Bordo & Orphanides, 2013). More than 8% of people were unemployed in the 1970s.
Regarding those problems and the inabilities to reach good results in the oil industry (like Japan did), America was challenged economically. The economic growth of the country was weak, and people could not realize what could save them from the spread of the crisis.
The slow productivity growth was another challenge of the US economy of the 1970s that was based on the energy crisis. As a result, the industries that were focused on pipeline development, oil extraction, and the production of electricity were under threat. People did not want to work and stayed unconfident in their future.
A poor level of productivity and poor economic growth changed the income and promoted the development of income inequality, the gap between rich people and other people. Rich people could use their money and connections to continue earning, and the middle class could not earn a lot and started spending their reserves.
Even the external balance was problematic in the USA during the 1970s because people could not gain control over their assets and had to spend more money without appropriate earnings.
Unemployment Rate Evaluation
According to the Bureau of Labor Statistics (2016c), in March 2016, the unemployment rate became 5%, up 0.1% compared to February 2016, when it was 4.9%. The rate of unemployment was high (5.5% one year later in the same month).
Duration of Unemployment
The data from the Bureau of Labor Statistics (2016) shows the rates of unemployment regarding different aspects such as the reasons or duration. It helps to comprehend if the country succeeds in the implementation of some new techniques and strategies to improve the situation. For example, in March 2016, 2,412,000 people were unemployed less than 5 weeks. Regarding the number of all unemployed people, that is 7,966,000, the percentage of the people that were unemployed less than five weeks is about 30.2%. Compared to the previous month’s data with the rate of 29.39%, it is possible to say that the last month was less productive than the previous month.
As for the duration of unemployment for 27 or more weeks, the numbers differ considerably. In March 2016, 2,213,000 people were unemployed (it is 27.7%). In February 2016, 2,165,000 people were unemployed (it is 27.1%). These numbers prove that people try to find jobs and solve the unemployment problems in a short period of time.
Evaluation of Unemployment Rates
The Bureau of Labor Statistics informs that Oregon (2016a) has reached the point of 4.5% in its unemployment rate. However, the same source fails to present the same information about the region of Portland giving only 4.9% in February 2016 (Bureau of Labor Statistics, 2016b).The national average unemployment rate is about 5% (Bureau of Labor Statistics, 2016c). The numbers of Oregon and Portland are lower than those of the national average.
References
Bordo, M.D. & Orphanides, A. (2013). The great inflation: The rebirth of modern central banking. Chicago. IL: University of Chicago Press.
Bureau of Labor Statistics. (2016a). Economy at glance: Oregon. Web.
Bureau of Labor Statistics. (2016b). Economy at glance: Portland. Web.
Bureau of Labor Statistics. (2016c). The employment situation. Web.