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

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

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

4) Effects of Unemployment

Okun's Law (Relation between GDP and Unemployment)

Unemployment ***** National Debt

*****) Unemployment Benefits

Unemployment Insurance

Extended benefits (TEUC)

***** Adjustment Assistance (TAA)

Personal Reemployment Accounts (PRA)

*****) Personal Effects of Unemployment

Financial Strain

Psychological effects

***** on family

*****) Conclusion


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


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

***** ***** Unemployment

There are several causes for unemployment situation in any market driven economy. According to economists Friedman and Phelps, any nation at any given point of time, would continue to have a certain "natural rate" of *****. As per *****ir hypothesis, an increase in total demand does not just result in a decrease ***** unemployment ***** but also creates an ***** in inflation. Likewise a ***** in tot*****l demand will result in an increase in unemployment rate *****d decreasing *****. There always exists a *****iodic oscillation in aggregate demand 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 Heilbr*****r observes, "On the domestic front, *****y include a technology of rampant au*****mation that ***** created severe employment *****s in all advanced countries..The result is prospective *****creasing dependency on government-financed programs of un***** relief or public works." [Heilbroner, 120]. Furthermore unemployment situation can be worsened ***** government policies such as price control, monopoly privilege to companies and even extensive government spending. [Judd W. Patton] The emerging Globalization phenomenon also h***** a significant effect on our ********** *****. Employer initiated lay*****fs ***** observed to be ***** the rise over the last decade. ***** of ***** to other developing countries is one


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