Unemployment And The Great Recession Essay

1568 words - 6 pages

The largest cause of unemployment can be attributed to recession. The term recession refers to the backward movement of the economy for a long period. People spend only when they have to. (Nagle 2009). With people spending less there would be less money in circulation therefore, enterprises would suffer financially and people would suffer too. This is so because recession reduces the fiscal bases of enterprises, forcing these enterprises to reduce their workforce through layoffs. These enterprises lay off their workers in order to cut the costs they incur in terms of wage and salary payments.
However, this move is not always a wise one because when an enterprise has fewer workers it would reduce its productivity which would mean more financial problems. Besides it strains the workforce. If these corporations continue incurring losses they eventually close down and as a result, the workforce loses jobs. This is what has been going on since December 2007. Unemployment is one of the biggest problems that governments have to deal with. (compston 2002).
The end of the year 2007 marked the beginning of the great recession. When recession began about 4.9 % of the population had no jobs. Over the years, increase in youth unemployment has been on an increase. By the end of 2008, the worst impacts of recession were eminent. During that year, about 2.6 million people were rendered jobless. This was recorded as the worst hit year in more than 60 years. More than half a million jobs were lost by the end of 2008. In 2009 the rate of unemployment rose to 7%.By last year, the rate had grown to 9.8%. Nevada used to be the best state financially. However, at the moment its unemployment is rated at 14%.
By the year 2010 there were about six and a half million people who had remained unemployed for a period of over six months. The number of the people who were officially unemployed, together with those who had lost the faith of getting jobs rose since the onset of the recession. In 2011, the rate of unemployment is at 9%. Although there is a decline it has been rather slow. Financial analysts predict that unemployment rate would drop to 8%. Even for the people who still have their jobs the hours that they work have been reduced since then. With reduced hours the productivity of the workers would not be fully exploited which in the end, affects the economy. This is so because with a small fiscal base the economy has not been able to recover from recession fast enough. Although there have been positive growths in the employment rates these growths are barely enough. They do little to help in the dire situation. This only means that joblessness is something that the population would have learned to live with.
The minority communities like Africans have tasted the worst impacts of recession. This is so because unemployment rates are highest within these communities. By the year 2010, the unemployment rate of the African population in the United States stood...

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