Bodily

Natalie Bodily
English 1010
Strickland
Unemployment, Still an Issue
I currently work in the financial industry handling foreclosures. any of these
foreclosures are due to the loss of employment. !hen I first started my "o# a little o$er a
year ago I was surprised at how many people were still ha$ing a hard time finding a "o#.
%he economy took a downturn starting in &00' lea$ing many unemployed and "o#less.
E$en in &01( unemployment is still a pre$alent issue. y paper will sur$ey the
con$ersations around the current unemployment rate and what caused it.
Economists ha$e researched this issue and ha$e created what is known as the
Be$eridge )ur$e, which shows the relationship #etween the unemployment rate and the
"o# $acancy rate. !hen the economy is doing well, the unemployment rate is low and the
"o# $acancy rate is high. %his means when a few people are looking for "o#s so when an
employer is looking to fill a position it may #e hard to do. *n the opposite side if there
are lots of employers looking to fill a position with lots of people looking for work the
unemployment rate will #e low. +uring a recession howe$er the unemployment rate is
how while the num#er of "o# openings is low. +uring &00' the cure shifted outward,
meaning the recession had hit.
+uring my research I found there are three main causes of unemployment
,-rulick.. %here is frictional unemployment, structural unemployment, and cyclical
unemployment. /rictional unemployment is constantly occurring. It occurs when those in
the work place transition to another "o# for reasons such as higher pay, a change in their
personal life, or a #etter match to their "o# skills. 0eople "oining or returning to the work
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for also influence this type of unemployment as well as employers who lay off workers or
refrain from hiring for reasons that do not relate to the economy. Structural
unemployment occurs when the local demographic does not match the local economy. In
short it is when those who li$e in the area do not match the skills needed for the
employment opportunities in the area. %he third type of unemployment, cyclical
unemployment, happens when there is not enough of a demand for the goods #eing
produced, which in turn creates "o# loss. %hese are the three $iewpoints I will #e
discussing.
%he first argument is that it was caused #y additional people returning to or
"oining the workforce. Some of those people include highs chool and college graduates,
women returning from maternity lea$e, those who pre$iously did not ha$e to work #efore
#ut due to hard economic times need to help support their family, and e$en a few who
ha$e had to come out of retirement. any #elie$e that the issue isn1t a lack of skills and
education #ut the fact that there are more people looking for work than there are actual
"o#s. %he ration to those looking for "o# $s. "o#s #efore the recession was &21
,!eissmann..
%here are now more "o# hunters in e$ery single ma"or industry than #efore. In no
industry does the num#er of openings match the num#er of those looking for "o#s. 3s of
&014 there was #etween 1.4 and '.5 times as many unemployed workers as "o# openings
in e$ery industry ,E0I..
%he second argument surrounding unemployment is that it is caused #y
mismatched skills and lack of education. %hose who are out looking for a "o# do not
match the skills employers are looking for. /or e6ample during this time the housing
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industry took a #ig hit. %his left many in the construction and housing industry "o#less.
%heir skills do not translate into "o#s such as nursing or engineering. %his presents a
difficulty in finding a "o# outside of their specialty and skill set ,7ampell.. 3dditionally
the skills of those who ha$e #een unemployed long term are starting to deteriorate
lea$ing them un8ualified for a "o# they would ha$e pre$iously #een a#le to do or lea$ing
employers to think this a#out them.
any employers find that they ha$e positions #ut are ha$ing a hard time filling
them due to the lack of education and skills of those seeking employment. Some #elie$e
that the youth are not #eing prepared enough to gain the skills needed for many of these
positions. %hey also feel that those who are unemployed need to apply themsel$es and
gain the skills and education needed ,)ordero.. !ithout the skills and education needed
the unemployment rate will continue to grow.
The third reason is that there is not enough of a demand for the
products or services being produced. Weak economic conditions are
often to blame for this. Fore example when the housing market crashed
people owed more than what their homes were actually worth. This
caused high debt. When there is high debt people tend to spend less
and save more. When they do this then the economy goes into a
downward spiral causing people to lose jobs and the unemployment
rate to increase. Many believe though that when the economy starts to
recover the unemployment rate will still decline because of how bad
things became during the recession. They believe that household debt
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is the biggest problem and if policy makers would address the issue
things may get better. (oldfarb!.
"thers believe the government is not helping. They are just
helping the rich get richer instead of actually addressing the problem.
To be exact they think republicans are the problem and it dates back all
the way to when #eagan was president. The thought that there was no
need for government regulation is what caused the problem. ($urnett!.
They also believe that the government has no sympathy for the
unemployed and that things will continue to get worse.
While everyone has a di%erent opinion on what caused a high
unemployment rate the issue is still the same& whether it was caused
by lack of skills& too many workers& or the government. They all have
one thing in common though they all agree something needs to be
done. The unemployment rate is slowly declining but there is still a
lack of solutions to the issue& hopefully one day in the near future the
problem will be solved.
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!orks )ited
Burnett, Bo#. 9!ho:s to Blame for ;ong<%erm Unemployment=9 The Huffington Post.
%he>uffington0ost.com, 10 ay &014. !e#. 0' 3ug. &01(.
)ordero, arcos. 9%he ;ink Between Unemployment 7ates and the ;ack of ?ualified
0rofessionals in 3merica.9 The Huffington Post. %he>uffington0ost.com, &@ *ct. &01&.
!e#. 0' 3ug. &01(.
E0I. 97atio of Ao# Seekers to Ao# *penings Slips Below 4<to<1 for /irst %ime in Nearly
/i$e Bears, #ut Is Still as >igh as in !orst onth of Early &000s +ownturn.9 Economic
Policy Institute. Economic 0olicy Institute, &( *ct. &014. !e#. 0' 3ug. &01(.
Coldfar#, Dachary. 9If Unemployment Isn:t Structural, !hat )auses It=9Washington Post.
%he !ashington 0ost, 1 Sept. &01&. !e#. 0' 3ug. &01(.
-rulick, 3l. 9United States Unemployment < >istory, )auses E )onse8uences.9Debtorg
News. !e#. 05 3ug. &01(.
7ampell, )atherine. 93n *dd Shift in an Unemployment )ur$e.9 Economix An Odd hift
in an !nem"loyment #ur$e #omments. New Bork %imes, @ ar. &014. !e#. F 3ug.
&01(.
!eissmann, Aordan. 97eminder2 %here 3re Still 4 %imes ore Unemployed !orkers
%han Ao# *penings.9 The Atlantic. 3tlantic edia )ompany, 1& Aune &014. !e#. 0' 3ug.
&01(.
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