Free Cause Effect Analysis Of Unemployment In America Essay Sample

Causes of unemployment

Unemployment is a condition whereby people who are able and willing to work do not have a job where they are actively working. It is also a situation whereby workers who have been laid off wait for a recall to their initial jobs. Unemployment is a major issue affecting the country today and several factors cause it. These include education and training, skills gap, labor unions activities, industry consolidation, employment policies, advances in technology and automation among other factors.
Research has shown that individuals who have attained higher education levels have increased chances of being employed as compared to those with high school diplomas only. It is also evident that workers who attend good schools where quality in education is guaranteed have greater chances of securing jobs as they tend to perform better. Therefore, unemployment can be as a result of low quality or low level of education among job seekers whereby the job positions are taken up by people who are more educated.
Unemployment may also be as a result of skills gap. Skills gap is the void created when the employer is looking for skills that the job seeker is unable to provide. In such cases, most of the job seekers miss potential jobs opportunities until they can have what the employers are looking for in potential workers (Krulik).
Labor unions also contribute to the increased unemployment levels in United States. In the mid-twentieth century, labor unions were very dominant. The played an active role in determining equity of salaries of the top managers and the average workers. It reduced the expenditure by the top management, creating enough revenue for hiring additional workers. The labor unions also took an active role in minimizing the rates at which workers were laid off. However, in the recent past, the unions have become dormant, and subscription to the unions by US citizens has declined. It has led to high and uncontrolled layoffs and huge expenditure by the top management to level where they cannot accommodate many workers in their companies.
Industry consolidation is whereby the large corporations in the market overshadow and replace the smaller enterprises and startups forcing them to close down. Small and medium sized enterprises employ a lot of Americans thereby reducing the unemployment rates. When huge industry players assert a lot of pressure and competition on these startups, they are forced to close shop. In the event, that this occurs, many people who were employed by these small businesses end up losing their jobs when they close. It leads an increase in the number of unemployed persons (Krulik).
Exportation of jobs plays an active role in increasing the unemployment rates. It is an act whereby companies and employers avoid hiring American citizens because of the high labor cost in the American economy. They instead opt to look for cheap labor outside United States in the low-cost labor countries. It may happen because the company may be seeking to either save on its expenditure, is trying to avoid collision with regulatory bodies, or is trying to increase its productivity by hiring more workers. Statistics indicates that about fourteen million jobs are exported outside America. It means that fourteen million Americans are denied employment.
Innovations in technology and automation have also contributed to the massive unemployment rates witnessed in the recent past (Krulik). It has resulted in growth of employment in the industries that are producing these automation machines and the workers that are trained to handle them. However, automated machines tend to take away the jobs of very many people. One machine does the work of about an average of 10 to 20 manual workers. It means that a company may lay off about eighty percent of its manual laborers when it chooses to automate its processes fully. The difference in the job opportunities created by making the machines and the job loss is very massive.

Effects of unemployment

Unemployment has many effects that present themselves in different ways. Unemployment affects the economy of a country, the employers, the social, and the psychological well-being of a person the whole society.
Massive unemployment rates significantly affect the economic prosperity of a country. The government depends on the taxes collected to sustain its operations and to deliver services to the citizens. When many people are employed, it implies that fewer people are paying taxes. This results in a decrease in the amount of revenue collected by the government (Ryan). This income is used for sustaining the health sector, the education sector, and many others. For this reason, the government will not have adequate funds leading to deteriorating services. It forces the government to increase the rate of taxes individuals to cover the deficit thereby raising the cost of living.
Employers and companies also feel the pinch of unemployment. It is because it makes very few people to have a potential of spending on goods and services that are not necessity. Decreased expenditure by the public means a decline in revenue of the companies and hence decreased profits (Ryan). Companies are forced to lay off more workers to prevent them from operating at a loss. It leads to a cyclic problem.
Unemployment has harmful effects on a person’s psychological health. People that are experiencing chronic unemployment tend to be very anxious a lot of time and even depressed when unemployment persists (Gangl 176). With time, they may find it difficult to sleep as a result of stress. These people with time lose their self-esteem and their self-worth due to their depression. It affects their overall heath, ability to socialize and their emotional well-being (Ryan).
People who are unemployed also find it difficult to sustain their families, and in adverse cases, themselves. It culminates in reduced quality of life for such people and their families. People may turn to crime or even sex trafficking in an attempt to find means of sustaining their fundamental needs. It has led to increased immorality and insecurity especially in areas and neighborhoods where many youths are unemployed.
As we have seen, the vast rate of unemployment in America has been caused by a number of factors. Unemployment has very many effects that tend to create a cyclic problem. As these problems persist, they end up causing more unemployment with time.

Works Cited

Krulik, Al. "United States Unemployment - History, Causes & Consequences." Debtorg News. Debtorg, 1 Jan. 2014. Web. 10 Mar. 2015. <http://www.debt.org/jobs/unemployment/united-states/>.
Ryan, Tom. "The Overall Effects of Unemployment." Small Business. Demand Media, 1 Jan. 2014. Web. 10 Mar. 2015. http://smallbusiness.chron.com/overall-effects-unemployment-37104.html
Gangl, Mark. Unemployment Dynamics in the United States and West Germany. New York, NY: Springer. 2003. Print.