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 components) 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 ***** *****)

Unemployment and National Debt

*****) Unemployment Benefits

Unemployment Insurance

Extended benefits (TEUC)

Trade Adjustment Assistance (TAA)

Personal Reemployment Accounts (PRA)

6) Personal Effects of Unemployment

Financial Strain

Psychological effects

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

***** of Unemployment

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

Econom*****ts ***** studied that an increase in productivity and an ********** in the labor force will both worsen ***** unemployment situation. As economist Heilbroner observes, "On the domestic front, they include a technology of rampant au*****mation that has ***** severe employment *****s in all advanced countries..The result is prospective increasing dependency on government-financed programs of unemployment 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 national economy. Employer initiated lay*****fs are observed to be on the rise over the last decade. Outsourcing of ***** to other developing countries is one


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