Cause and effect of unemployment in the US
The unemployment issue in the United States has been a thorny issue for a good number of years now. The rate of unemployment in the states is usually reported by the Bureau of Labor Statistics. The rate has been shown to rise and fall since 1948 until very recently in 2012. A 2.5 percent rate, which is the lowest rate so far, was recorded in 1953, where as the highest unemployment rate was recorded as 10.8 in the November of 1982.unempoyment has its main causes as we as impacts and this paper will attempt to look in to the causes and results of unemployment in the united states (Alain, 2006).
A higher rate of unemployment is a sign of a failing national economic performance. On the other hand, low unemployment rates are an indication of good economic performance. The following are some of the reasons that have contributed to the increased rate of unemployment in the United States.
The growing population
The first census in the United States was conducted in 1790, and showed the population to be about 3,929,214. This number grew over time and today, it is estimated that the population lies well above 311, 800,000. It is no secret that job opportunities do not increase with the increasing population and this is one of the reasons as to why unemployment is also caused by increase in population (Krueger, Alan & Lawrence, 1999).
The five main contributors of unemployment in the states has been said to include;
Inadequate aggregate demand
Aggregate demand refers to the demand of goods as well as services from both the public and private sectors. Following the housing bubble between 2001 and 2007, where housing prices in some places doubled, both the demand and prices began to fall in the 4th quarter of 2007. This resulted in financial crisis and financial institutions no longer had trust for each other. This was then followed the collapse of shadow banking system, and businesses as well as households could not secure...