Causes of Incresed of Unemployment Rate in America (Essay Sample)

Unemployment in America
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Unemployment in America
Unemployment is a common phenomenon in both developed and developing countries. Even though it is usually more prevalent in underdeveloped economies, unemployment can also increase to intolerable levels in countries with stronger economies. Specifically, the United States has a powerful economy but still suffers from unemployment. Furthermore, the unemployment rate remains high despite the strong economy and government interventions to create more jobs each year. Hence, it becomes important to analyze the leading causes of the increased unemployment rate, which are frictional unemployment, structural unemployment, and cyclical unemployment.
Frictional Unemployment
This form of unemployment is usually short-term and exists in the economy due to the disturbances in the labor market. It involves joblessness due to existing job seekers quitting their current jobs to search for new employment opportunities. In America, the situation can be identified as one of the leading causes of the persistent and high unemployment rates (Komlos, 2021). The United States has a robust economy with many employers in various sectors of the economy. Due to the massive high number of potential employees, many individuals always seek better job opportunities.
In some cases, employees might feel unsatisfied with their income or work conditions. In such situations, they often opt to depend on savings until better opportunities arise rather than relying on jobs they feel are unfulfilling. Besides, new job seekers are constantly entering the labor market. Students graduate each year in America and begin looking for employment (Yang, 2019). As more students graduate each year, more job seekers enter the labor market that cannot support all potential employees. This situation leads to increased numbers of unemployed youth in the country, translating to high unemployment rates.
Frictional employment can also occur due to an increase in job seekers re-entering the workforce. Existing employees might quit work due to various circumstances such as illnesses, relocation, or career change. In such situations, willing and able workers cannot participate actively in the labor force. These instances are common in the United States because many employees usually quit work for various reasons but seek employment later when they can work (Yang, 2019). When this happens, some people may fail to acquire jobs leading to joblessness, contributing to the high unemployment rates.
Structural Unemployment
Technology and job outsourcing are usually the leading causes of structural employment. When these factors come into play, they often cause long-term unemployment, leading to persistently high unemployment rates. In America, technology is more advanced and affects the labor market adversely (D’Orlando, 2020). Advanced computers and robots have replaced humans in different sectors and might continue as more businesses adopt new technologies. For instance, today, the internet has forced many travel agencies out of business as it has replaced manual tasks with online processes. One study confirmed this occurrence as it revealed that automated machines replaced about 400,000 jobs in U.S. factories between 1990 and 2007 (Ford, 2016). The situation has been causing high unemployment, hence the increased unemployment rates recorded in the country.
On the other hand, job outsourcing has also been affecting the labor force in the United States. This is because some companies shifted their manufacturing and call centers to other countries. The high labor cost in America is considered the main reason some organizations move their operations to other countries where labor is cheap. For instance, the signing of the NAFTA trade policy in 1994 enabled many manufacturers, such as Brakes Parts Inc., to move to Mexico, leaving America with fewer employment opportunities (Yang, 2019). While these companies act to protect their businesses, they leave huge employment gaps in America. In turn, the rate of unemployment remains high.
Cyclical Unemployment
Cyclical unemployment results from demand-deficient unemployment, a situation in which employees exceed available job opportunities. This phenomenon is common during recession periods when businesses experience reduced sales and excessive loss of profits due to reduced demand. An example of this situation is the Great Depression of 1929 which led