Unemployment in the Recent Recession Essay Example for Free

Unemployment in the Recent Recession Essay The United States of America is currently suffering from an economic recession as the country’s economy is taking a steep decline. In line with this recession, the unemployment rate has also risen to the highest level it reached within twenty-six years. In addition, Americans have been cutting their expenses and are living below their means. Furthermore, their expenses are expected to go higher without knowing when it would stop. The recession indeed caused a major set back on the United States wealth, cutting the net worth of every household in the States. The unemployment rate hit 8. 1% as the United States lost more than four million jobs since the recession began; a quarter of million jobs lost coming from the areas of construction and manufacturing. In addition, people with part-time jobs who are looking for full time jobs bubbled to 14. 8% of the total number of employed workers. In this light, economists have predicted that if the decline of the U. S economy continues, the unemployment rate in the country will reach 10%. And if the economy continues to worsen, the lowest employment rate in the history of the United States will be reached (Evans). After the surge in unemployment, many Americans have cut down their expenses. Even though some still have decent and stable jobs, they still feel the need of to save their money. They curtail their spending by going to discount stores. In line with cutting down their expenses, most Americans opt to settle on their old stuff which are still usable, rather than buying new ones. Moreover, parents encourage their children to spend little and save their money. In addition, people who used to dream of studying in private colleges are now looking for state colleges (Dougherty). Consumer purchase is indeed an important indicator of an economy’s progress since it is occupies a great part in the country’s Gross Domestic Product or GDP. As such, a decline in the consumer purchase largely affects the GDP in general. Consequently, a lower GDP would also mean that the country also has lower revenue (Dougherty). Aside from lower revenues, the thrifty lifestyle that most Americans are now keeping is also said to have negative effects on employment. The cut on spending by Americans who have, as economists say, buying power, depletes the consumer demand. As a result, companies will decrease their production before the prices go down because of oversupply. In line with this, more employees had to be laid off from their work. Thus, every healthy consumer who does not buy what he or she should buy is making his or her contributions on the increasing unemployment rate and on the economic recession (Evans). However, consumers who still have jobs should not be blamed if they have opted to cut down their spending. They too, are being plagued by the current economic recession; and as such, they are also dealing with their own problems. Most of them are concerned with the shrinking value of their retirement funds and other investments. In addition, most of them are also afraid to lose their jobs. As such, they tend to save more for their future (Dougherty). Furthermore, the rise in unemployment and curtailing of expenses by Americans tend to lower the wealth of the United States. Accordingly, the wealth of every American household has lessened; as such, most Americans are expected to lose money everyday rather than earn. In addition, mortgages and credit-card debts have already reached the total of 13 trillion dollars. In line with this, the equity of house owners already fell to 43%; which means that the value of houses has declined to 43% of the original price because of mortgages and loans (Kalita). With these situations at hand, the government should be held responsible in creating a probable solution to recover from the recession. Indeed, government officials have been working overtime to restore the country’s economy progress. As such, the government has released billions of dollars to fund American companies that were greatly affected by the recession. This act from the government has helped to save 3. 5 million of jobs for the American employees. Also, a part of this fund will be used to finance government programs that will help Americans to get back to their normal life again. This stimulus fund, as Summers said in his address to the Brookings Institution, will be used for the purpose of recovery and expansion. Unfortunately, the government does not know when the recession will be over. Furthermore, Summers said that they spend large amounts of money everyday on the financial system to get the economy back to its feet again (Barkley and Pulizzi). However, even as the American economy positively reacts and flourishes again, Americans will not immediately feel its effects on the employment sector. This is due to the fact that the employment sector is an avenue of the economy that is slow to react in response to economic growth. It means that even if the economic situation of the United States improved, the employment rate is likely to move up little by little every month. Thus, the government would have to create more jobs to ensure that there is a large scale increase in jobs. They have to work on livelihood programs to help unemployed people to cope with the ongoing recession (Evans). The government is perceived to do all it can to attend to the needs of the American people and to surpass the current financial crisis. As such, they have released funds in order to support companies that are in need of help and also generated plans to further help the people. In addition, they have constantly encouraged the American people to help in building the blocks to stop the ongoing crisis. The government pronounced that healthy consumers should not be afraid in spending more to increase consumer demand and help the economy to move in the right direction. If the consumer purchases increase, the government revenue will also increase, thus pulling the economy up (Barkley and Pulizzi). As unemployment rate continuously increases, the U. S government may take longer to provide probable solution to the economy. However, the President of the United States and the government has shown that they are optimistic that the economy will recover. They believe that the programs that they are executing and planning will help the economy to become stronger and move towards recovery. And consequently, the problems of unemployment will be eradicated, thus helping Americans to live a better life. Works Cited Barkley, Tom, and Henry Pulizzi. 14 March 2009. â€Å"Summers: Timing of Turnaround Is Unclear. † Wall Street Journal. 20 March, 2009 http://online. wsj. com/article/SB123695590029320001.html. Dougherty, Conor. 7 March, 2009. â€Å"Those Who Are Still Working Spend Less, Deepening Gloom. † Wall Street Journal. 20 March, 2009 http://online. wsj. com/article/SB123638518267558311. html? mod=relevancy. Evans, Kelly. 8 March, 2009. †Jobless Rate Tops 8%, Highest in 26 Years†. Wall Street Journal. 20 March, 2009 http://online. wsj. com/article/SB123634566437552601. html. Kalita, S. Mitra. 13 March, 2009. â€Å"Americans See 18% of Wealth Vanish. † Wall Street Journal. 20 March, 2009 http://online. wsj. com/article/SB123687371369308675. html.