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Malik El-Asha
Cindy Rodgers
English 12A
October 13, 2014
Assignment 8 Research Paper:
Unemployment in the United States
That which has plagued the United States for the past century, recession and
unemployment, have once again risen to create trouble and conflict in the recent years. The
United States has seen an extreme number of recessions over the last century and it has caused
great impact upon our current economy and job distribution. After the start ever recession a large
impact is received by the job market and the economy faces a major spike in unemployment.
Although the United States has faced many economic issues in the last hundred years it has come
out wiser and more prepared for the issues of recent years. The US has attained much knowledge
from the struggle through recession and this knowledge is used to prevent further issues as well
as to quickly and effectively handle the recessions that arise. To understand the recent economic
issues of the US as well as the rise and fall of unemployment in the recent recession one must
start by understanding what unemployment is. Understanding begins with knowledge and in this
case the knowledge of unemployment, its causes, and solutions. To further comprehend the steps
taken in most recent recession it is best to look back on the US’s history of unemployment and
economic difficulty to see what they have learned from their past troubles and just how badly
unemployment can cripple an economy. By understanding past struggles and the true danger a
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recession brings, one may then begin to comprehend the situation that plagues the US and the
solutions that can help cure it. The struggle of unemployment is one that has existed for ages and
to begin see the United States’ situation clearly it is essential to understand the subject at hand
completely, comprehend the history of such events, and analyze the current recession in its
entirety.
To truly understand the situation our economy is in and the unemployment that plagues
our country, one must first understand the subject completely. Starting at the beginning we must
first answer the question, what is unemployment? The unemployed are defined as those who are
actively seeking jobs but cannot find them. Now unemployment has many classifications when
finding rate, these range from U1-U6. Each of these classifications views unemployment
differently and as a result each has different methods of calculating the unemployment rate. The
official calculation method for unemployment is U3 which calculates the rate by taking the total
unemployed as a percentage of the civilian labor force. The United States government releases a
monthly report revealing the country’s current unemployment rate in all classifications.
Unemployment is considered to be a “lagging indicator”, meaning that there is a delay between
the start of economic decline and the rise of unemployment. This makes it difficult to analyze the
true devastation of a recession until its well on its way to breaking down the economy.
High levels of unemployment are caused by a weakening economy, this high level of
unemployment goes on to further weaken and devastate what is already a declining economy.
Unemployment is caused by many issues that reside in the economy and it is not something that
simply fades, even when weak the consequences of its existence always linger into the
recovering economy. One cause to unemployment is something that is always present, it is
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known as Structural Unemployment. Structural Unemployment occurs when a mismatch of jobs
and the labor force available occurs, meaning when the jobs available require skilled workers in
the field but only workers who lack the skills for the task are available. Another cause of
unemployment is known as Cyclical Unemployment, which occurs when the demand for goods
and services is not at a point where the economy can provide jobs for those who seek them.
Cyclical Unemployment causes a vicious cycle where the demand for goods and services lower
even further as a result of the unemployed not having the funds to seek these goods and services.
The consequences of unemployment do not just affect the economy but serves to devastate the
minds and lives of the families affected by it. Unemployment can leave heavy emotional scarring
on the citizens whom it takes its toll upon, and this scarring is not something mended by a drop
in the unemployed but stays for many years after. Unemployment leaves scars upon the economy
as well as a recovery from long term unemployment is not something done overnight and this
can cause a heavy strain on a recovering economy as well as all the businesses that are a part of
it.
Comprehending the situation at hand requires one to look back at all the recessions of the
past and begin to understand what causes such things and the solutions that help to solve them.
The last century is littered with recession under a great number of presidencies all of which had
their own methods for solving them. One of the most notable past recessions is known as the
“Great Depression” which led unemployment to what continues to be an all-time high. The Great
Depression devastated the United States and took unemployment to the highest ever recorded at
23.6%. The Great Depression began with the fall of the stock market in 1929 and the president
responsible for the recovery of the economy was Herbert Hoover. Although he tried many things
and worked vigilantly to try and put an ease the economic devastation it wasn’t until Franklin D.
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Roosevelt took office in 1933 that the economy began to mend and unemployment started to
reduce. With the immense effect the Great Depression had upon the world its recover was very
slow until the outbreak of World War 2 in 1939 which led to an immense recovery of jobs and
economic strength. The unemployment and economic scaring the Great Depression caused was
so severe that it affected not only the US but he world and its markets as well, such devastation
was only solved by another although this time in the form of a war.
Although the most immense recession in our history the Great depression was not the
only one in the last century, the effects of the Great Depression would echo through the century
as it was the beginning of what would be many economic recessions. The post World War 2 eras,
stretching from 1950 to 1970, was filled with many ups and downs as the economy worked to
return to its feet after the Great Depression. The beginning of the 1970s started what would be
the next big recession, also known as the era Stagflation, as the oil embargo began to take its toll
on the United States and its citizens. This era brought many economic changes and policies on
wage and regulating the oil and gas markets but no matter the action taken unemployment
continued to rise to over 10% before the presidency of Ronald Reagan, which would bring in a
new era of recovery. Reagan brought a number of brilliant plans and actions with which to
recover the economy during his presidency in the 1980s. Before his leave from presidency in
1989 Reagan succeeded in reducing the economic mess left by the Stagflation and was able to
reduce unemployment from 10.8% to a low of 5.3%. After Reagan began to mend the economy
George H.W. Bush came into presidency and brought with him a small recession that would
return unemployment to a high of over 7%. Luckily for the United States president Clinton’s
presidency in 1993 brought an immense recovery to the US economy and was able to ease
unemployment a great deal. Clinton was able take the unemployment from 7% to 4% bringing it
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a low not seen in 50 years. Following Clinton our economy began to fluctuate until we reached
our current economic recession bringing with it high unemployment as well as great ruin to the
economy, this age would be known as the Great Recession and it marks our current economy.
In the last several years the United States economy has seen a major decline beginning at
the end of 2007, this began what would be known as the Great Recession which our current
economy is still in recovery from. It is widely believed that the Great Recession began from
many issues coming together to create this travesty, the major causes are thought to be the
Mortgage crisis, real-estate collapse, and immense household debt. As shown in Figure 1 the
unemployment rates skyrocketed during the Great Recession, seeing a slight rise in 2007 but
really exploding after 2008. The a matter of two years, 2008-2010, the Great Recession managed
to take unemployment up to 10% from the 5% where it began. This quick doubling of
unemployment and the fall of the economy devastated the country leaving immense worry and
panic in its citizens. This recent recession was often compared to the travesty that was the Great
Depression and was said to be very likely to reach such a level of economic devastation. In 2008
at the start of the Great Recession president Barack Obama came into presidency and was given
the responsibility of repairing the economy that had begun to crumble. At the Great Recessions
height in 2009 many economists were conflicted as to whether this was just the beginning of an
immense collapse of the economy or merely the climax before the beginning of recovery.
After reaching its height in unemployment and economic depression at the end of 2009
the economy began to show signs of recovery as unemployment began to decline and the effects
of the government policies began to show. The beginning of recovery starting in 2010 was very
slow and inconsistent as the unemployed began to get back on their feet and the economy
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stuttered to recover. It wasn’t until 2013 until unemployment began to show steady decline until
2014 where unemployment showed immense drops as portrayed in Figure 2. As of 2014 the
economy has yet to fully return to its former strength even as the jobs begin to return. The
recovery from the Great Recession is seen as one of the longest lasting recovery processes as
even 5 years after its end the economy is still struggling to show signs of the economic strength
to which it is capable of. Although unemployment has be reduced by half since 2009 in the last 5
years there is still many more jobs needed to return to the economy for unemployment to return
to what it was before this economic ruin struck. While unemployment is showing decline many
people still struggle to find jobs in an economy still working on recovery and with the economy
running far from its potential height it is believed that the US is still far from where it should be.
Many United States citizens are struggling to cope with the pace of recovery and the still
moderately high unemployment, these citizens believe that the economy is improving and will
continue to do so but no time in the near future will it show much needed results.
Figure 1
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Figure 2
The United States economy has been through a very turbulent century as it struggles to
find equilibrium and maintain a consistent strength to its economy. The young country known as
the United States has learned much of unemployment and recession through its struggles in the
past century and it is beginning to better adapt to handling such situations and deterring them
entirely. While the failures the economy has had in the past have left much scarring and
devastation to the country it is through these failures and mistakes that this country learns and
grows stronger from. Even through all the difficult times and challenges the recessions of late
have brought the citizens continue to believe in this great country and its ability to persevere and
come out with new found power as a result. Through this last century the United States has
learned immensely more on the subject of unemployment as well as economic recession and as a
result the country has developed many new and efficient methods to protect and maintain the
economy. With this new knowledge the country is more capable of understanding the struggles
that arise in its economy and provide quick responses for the sake of its citizens. This past
century has shown the US many terrible times such as the devastation known as the Great
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Depression as well as the era of Stagflation and through these times the country brought forth
leaders capable of adapting and resolving such troubles. Even now the US has faced a recession
so terrifying it earned its name as the Great Recession but through the experience and knowledge
from gained from past economic downfalls the US is on its way to recovery. While this recent
recovery may be taking its time so as to ensure future stability, the citizens continue to have
worries as to the pace at which the economy is returning. Unemployment has shown to be one of
the greatest terrors this country has had to face but it has always prioritized the lives of its
citizens and the return of their jobs, even now the unemployment rate continues to show recovery
and return after the Great Recession. While there have been truly dark times for the United States
in the last century, the country has learned immensely more about the plague that haunts it,
recession and unemployment; it has also gained much more understanding of the past travesties
to ensure that in future economic troubles the country has the knowledge needed to make an
efficient recovery, which has been shown to be true in recent times with the recovery from the
Great Recession.
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