Unemployment in America
Introduction
The unemployment rate in the USA has remained high although it has seen a drop in the recent years. The rate of unemployment is the number of persons that are actively searching for employment as a percentage of the total labor force in a country. The rate of unemployment in the United States fell to 7.8% in September 2012. According to historical data, the average unemployment rate in the United States has been 5.8% to a record high of 10.8% in November 1982 (Trading Economics, 2012). The unemployment rate was at its lowest in May 1953 when it hit 2.5%. In the run up to the November 2012 election in the United States, the unemployment debate is mainly between the Republicans and the Democrats.
The unemployment rate recorded in September 2012 was the lowest since January 2009. Studies indicated a healthy increase of 873,000 in employment, and economists estimated that there was to be a further addition of 115,000 jobs by employers before the end of the year (Holtz-Eakin, 2012). In September 2012, the number of unemployed Americans fell by 189,000 to 4.8 million (Davidson, 2012). However, despite the decrease in unemployment rate in September, the long term unemployment rate is still 40% of all the jobless people. It is also essential to note that employers laid off about 2,000 temporary workers in the month of September. The increase of about 873, 000 employments was on part time jobs. According to economists, this leads to an increase in the number of permanent jobs available in the labor market.
Opposing View
The sudden increase in part-time jobs was the major contributor to the reduction of the unemployment rate. The 114,000 part-time jobs created were mostly in the warehousing, transportation, and health care sectors. In addition, the business sector added about 104,000 jobs while the local, federal and state governments created 10,000 jobs (Delaney, 2012). This was a large gain as the local and state governments have been cutting jobs steadily over the past years. Business services and professionals added 13,000 jobs, hospitality and leisure added 11,000, retailers added 9,400 while construction created 5,000 jobs. However, manufacturers reduced their labor force by about 16, 000 positions. The positive reduction in unemployment rates was noted by the Labor market that estimated the job gains in July and August to be about 86,000 in total. There was a rise of about 141,000 to 181,000 in July. In August, the number increased from 96,000 to 142,000. Consequently, the unemployment rate has continued to improve at a modest rate in 2012.
As a result of the high unemployment rates, the average work week has risen from 3.5 hours to 34.4 hours over the last decade. This is done chiefly because the employers characteristically increase the working hours of the existing employees. This is done before bringing on new employees. It is, however, essential to note that the average hourly earnings also increased by 7 cents to $23.58. According to my opinion, this increase in hourly earnings is not proportional to the amount of workload increase. Subsequently, most companies in the United States are producing more goods and paying less in salaries and wages. Managers are applauded for reducing costs and hence most of them push for retrenching employees to gain favor with their seniors.
Despite the negative implications of unemployment in the United States, it has led to increased profit margins by manufacturers from using cheap labor in the East. The unemployment rate in USA has bolstered, inspired and increased the confidence of the East. The Chinese equity market has benefited from strengthening of the Yuan against the dollar. The United States, on the other hand, has seen the depreciation of the dollar and fall of the treasury prices (Koopman, 2012). This has made the American investors channel their spanking confidence to the Chinese stocks. This has been done through the exchange of traded funds and American Depositary Receipts. In addition, investors have ventured into higher yielding investment countries abroad. The emerging markets of Asia have benefited from the withdrawn capital from US government securities.
My Opinion
According to President Obama, a democrat, economic stimulus and good political governance have helped reduce the unemployment rate. However, the Republican candidate, Mitt Romney, has pointed out that the only reason the unemployment rate has reduced is because the total labor force has reduced (Delaney, 2012). The Democrats are pushing for an increase in unemployment benefits whereas the Republicans believe that increasing these benefits would increase unemployment by making it more attractive.
As is expected in a campaign period, the incumbent is defending his economic policies whereas the opponent is criticizing them. The Obama administration has failed in reducing unemployment in the United States. Though the rates are going down, the number of individuals that are currently employed has reduced in the last 5 years that Obama has been in office. Economic stimulus is not enough to reduce the level of unemployment in the country; good governance is also necessary. Economists point out that the numerous policies implemented by the Obama administration to curb unemployment have created unpredictability in the US labor market. Subsequently, this reduces the market attractiveness which consequently increases the rate of unemployment. The government needs to establish a plan for increasing employment and stick to it despite any challenges it faces. I believe that the rising unemployment in the US is a matter of critical concern and that the federal government should focus on increasing employment as a key to grow the economy.
Most US companies are now opting to have their manufacturing and production activities done in Asian countries due to reduced labor costs in these markets. The government should focus on giving tax cuts to companies that conduct their manufacturing and production activities in the United States. At present, what the US labor market needs is a body to regulate and brand it to increase its appeal to companies in the United States. Economic stimulus and policies may sound like the way to go, however, as long as Asian governments are actively marketing their labor markets, the US workforce will be greatly disadvantaged.
Common Ground
Both sides of the debate can agree that energy dependence could lead to creating more employments for the citizens. This would involve eliminating all the environmental limitations remaining in the gas and oil companies, and allowing them to dig, drill and mine anywhere they would be pleased with minimum government supervision. This obviously would lead to the creation of new jobs.
Besides, both sides of the debate can agree that the represented industries would decrease the prices of the gas as well as ensure that the country was oil dependant. This is true since the industries would increase the oil and gas production, which would lead to an increase in supply and consequently cause a decrease in prices. Furthermore, producing more oil would ensure that the country is oil dependant as it would be exporting oil to other countries in exchange of income. Subsequently, oil and gas mining would increase employment opportunities. This would also increase employment indirectly by fostering growth of other sectors of the economy.
Furthermore, both sides of the debate could agree that reducing deficits would result in reducing all the non-discretionary expenses by approximately 5 %. Such gains would lead to further investments in sectors like education. Children who wished to join college and universities would get funding, learn and be able to work on their careers, hence improving their living standards and that of the community at large. Both sides of the debate could also agree that there was the need to increase the Pell grants in the education sector; though the party’s financial plan would reduce such grants. Improvement in the education sector would mean an increase in employment of teachers and other staff associated with education.
In conclusion, both sides of the debate can agree that energy dependence could lead to creating more employment for the citizens, as the represented industries would decrease the prices of the gas as well as ensure that the country was oil dependant. Also, reducing deficits would result in reducing all the non-discretionary expenses which would be used to improve the education sector in order to help students achieve their career works. Companies should also invest more in manufacturing in the United States since outsourcing this function results in reduced employment.
References
Davidson, P. (2012). September unemployment rate falls to 7.8%. USA today. Retrieved from
http://www.usatoday.com/sept-jobs-report/1613541/
Koopman, R. (2012). The Minimum Wage: Good Intentions, Bad Results. The Freeman Online.
Retrieved from http://www.thefreemanonline.org/the-minimum-wage-good-intentions-
bad-results/
Trading Economics (2012). United States Unemployment Rate. Trading Economics. Retrieved
from http://www.tradingeconomics.com/united-states/unemployment-rate
Holtz-Eakin, D. (2012). Who knew job data could be so exciting? Reuters. Retrieved from
http://blogs.reuters.com/great-debate/2012/10/08/who-knew-jobs-data-could-be-so-
exciting/
Delaney, A. (2012). Mitt Romney uses Alternate Employment Data during Debate. Huffington
Post. Retrieved from http://www.huffingtonpost.com/2012/10/16/mitt-romney-
unemployment_n_1972401.html?utm_source=feedburner&utm_medium=feed&utm_cam
paign=Feed%3A+HP%2FPolitics+%28Politics+on+The+Huffington+Post%29
