Essay - Unemployment Outline Introduction Causes of Unemployment A) the Four Components...

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Causes of Unemployment a) The four components (Cyclical, Structural, frictional and seasonal *****) b) Increased productivity c) Globalization, Outsour*****ing

Unemployment Statistics a) National Unemployment Rates b) State wise Comparison

4) Effects of Unemployment

Okun's Law (Relation between GDP and Unemployment)

***** ***** National Debt

5) Unemployment Benefits

Unemployment Insurance

Extended benefits (TEUC)

***** Adjustment Assistance (TAA)

***** Reemployment Accounts (PRA)

*****) Personal Effects of Unemployment

Financial Strain

Psychological effects

***** on family

7) Conclusion


*****sis high rate of unemployment has a negative effect on the national economy and greatly affects the living standards of the people. Apart from the loss of productivity and the consequent economic downslide, unemployment also ***** negative psychological implications and damaging effects on ***** family structure.


***** is one of the major ***** problems affecting a nation. The United *****s, one of ***** vibrant economies in the world currently suffers from a huge unemployment crisis with more than 8 million people in ***** civilian workforce without jobs. After a dec*****de of continued ***** consistent growth (1990 to 2000), which saw a growing GDP and a booming economy, there started a period of recession. Unemployment rates reached a recent ***** of 6.1% in June 2003. The loss of productivity and the extended unemployment ***** have created additional strain on the already deficient federal budget, which in turn has resulted ***** higher burden for ***** tax paying citizens. Let us analyze the underlying causes for unemployment, the unemployment support ***** provisions offered by the government and the effects of unemployment on ***** individual as well as the ***** economy as a whole.

Causes of Unemployment

There are several causes for unemployment situation in any market driven *****. Accord*****g ***** economists Friedman and Phelps, any nation at any given point of time, would continue to have a certain "natural rate" of unemployment. As per *****ir hypothesis, an increase in total demand does not just result in a decrease in ***** rate but also creates an increase in inflation. Likewise a decrease in ***** demand will result in an ***** in unemployment rate and decreas*****g inflation. There always exists a *****iodic oscillation in aggregate ***** and hence a consequent flux ***** unemployment rate, which is referred to as cyclical unemployment. [Paul Krugman].

Econom*****ts have studied that an increase in productivity ********** an increase in the labor force will both worsen the unemployment situation. As economist Heilbroner observes, "On ***** domestic front, they include a technology of rampant automation that has ***** severe employment strains in all advanced countries..The ***** is prospective increasing dependency on ********** programs of un***** relief or public works." [Heilbroner, 120]. Further***** unemployment situation can be worsened by government policies such as price control, monopoly privilege to companies and even extensive government spending. [Judd W. Patton] The emerging Globalization phenomenon also has a significant effect on our nati*****al economy. Employer initiated layoffs ***** observed to ***** on the rise over ***** last decade. Outsourcing of ***** to other developing countries is one


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