Economics Essay Sample: The Rise and Fall of the Unemployment Rate

Unemployment is a problem in America, but unfortunately, it is an everyday normality. There are many reasons why thousands of Americans are unemployed. Most lost their jobs due to the economy and the governments decisions. In a country characterized by these decisions made by a higher power, how can we generalize and say that people choose to be unemployed? "People are unemployed because they want to be," is a statement that should not be used as a logical for the overall level of unemployment in todays society (Harlan, Chico, and Ylan).

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Unemployment is one of Americas major economic problems. People who are considered unemployed are those who are seeking work or laid off for more than a week. A calculation or unemployment would be the unemployment rate. The level of unemployment is the percentage of the total number of people in the labor force who are unemployed. The unemployment rate does not count the people who would like to work, but have lost hope in looking for a job because there are none available. Unemployment is unavoidable in the United States; this is due to a limited number of jobs available, the labor force declining, job searches takes time, skills mismatch, educational mismatch, and American jobs being moved to China with American companies (Jacobs).

One of the many reasons why the unemployment rate is high is due to the decline in the creation of new jobs (Shark). After the recent financial crisis, the number of new jobs dropped; this meant that recent graduates from college could not get jobs, thereby leading to unemployment (Kolesnikova, Natalie, and Yang Liu).

American companies have been moving their firms to China. This imposes yet another reason that contributes to the high unemployment rate. For the past few decades, American companies have outsourced their services and personnel to reduce the overall cost to lower operational costs and labor costs and gain access to resources not available internally. Companies do this to increase the profit they get from production. For instance, American companies pay each worker a wage of $7.50 per hour, while in China they would pay $2.50 per hour. From 2000 to 2013, manufacturing jobs in the United States shrank from 17.3 million to 11.4 million (Jacobs). Many of those jobs are now in China or other lower paying countries (Soergel).

There is only one way to resolve the problem of American companies moving to China, that is reshoring. Reshoring is a term used for simply bringing back companies their original location. If America were to restore its companies back, it would kick start our economy back into good shape. Creating manufacturing jobs will reform Americas economy; this will provide millions of jobs for Americans who need them. Bringing these factories to America will mean an increase in exports and a decrease in imports. These extra import taxes could be used to help better our economy (Amadeo).

Unemployment is obviously a big problem, and fortunately, there is not as much in the United States. The United States has been through very high rates of unemployment throughout the years. It is hard to relate to citizens who are unemployed at these times, but it is very frustrating to get through. The decline in new jobs, the jobs being taken to China, and the decline of the labor force and so much more are negatively affecting the United States, and it obviously needs to stop (Jacob).

Works Cited

Amadeo, Kimberly. "7 Causes Of Unemployment". The Balance, 2017, https://www.thebalance.com/causes-of-unemployment-7-main-reasons-3305596.

Harlan, Chico, and Ylan Q. Mui. Unemployment Rate Falls to 5.1 Percent, but Americans are Not Finding Pay Increase. www.washingtonpost.com. Web. 4 September 2015

Jacob, Jijo. "Top Five Reasons For High Unemployment In US". International Business Times, 2017, http://www.ibtimes.com/top-five-reasons-high-unemployment-us-265035.

Jacobs, Jilo. Top Five Reasons for Unemployment in U.S. www.ibtimes.com. Web. 9 February 2011

Kolesnikova, Natalie A., and Yang Liu. Jobless Recoveries: Causes and Consequences. www.stlouisfed.org. Web. April 2011

Shark, James. The Causes of High Unemployment: Still Due to Dwindling Job Creations. www.heritage.com. Web. 24 March 2010

Soergel, Andrew. Unemployment Rate Hits 7-Year Low as U.S. Adds 223,000 Jobs in June. www.usnews.com. Web. 2 July 2015