Laura D Andrea Tyson article on Structural Unemployment and Good Jobs on 4th May 2012 at the New York Times newspaper relates about unemployment in the united states of America. The country is far from attaining full employment. As a result, there are a high number of unemployed people in the country. The main reason for the high rate of unemployment is a weak aggregate demand. The country has not managed to move away from the deep canyons of recession, which left it in a painful economic condition. The United States of America private sector has not fully recovered from the recession effects. The private sector jobs are short of the pre-recession peak by close to five million. The normal or the structural rate of unemployment in an economy is rated at around 5 and 6 percent. The economic rate of unemployment is above this normal rate of unemployment. However, the rate of unemployment is even better off because part time jobs are numerous in the economy. The rate of recovery is rather slow. It has a great opportunity cost to the economy. One of the main block to the recovery from unemployment is a job mismatch. Those seeking employment do not have the skills required by the employers. The mismatch constrains employment and economic output. During the recession period, cyclical forces were the main causes of unemployment. Those with low levels of education are the one who are affected most by the unemployment. Thus, the gap between the rich and the poor continue to widen because children from the rich are highly learned than those from the poor background. To make it worse, the government has continued to cut its funding on education. Lack of skilled labor force impact negatively to the American economy.
The article has several terms covered in class. Full employment refers to the condition where everyone who is willing to work has an opportunity in the economy. Aggregate demand refers to the demand for the total commodities in a countrys economy within a given period. A recession is an economic period whereby there is a fall in economic output for short period of time due to a fall in industrial and commercial activity. The private sector refers to the businesses with a motive to make profits, which are not owned and run by the government. Unemployment rate refers to the level of people who are unemployed and seeking jobs actively. A labor force in a country refers to the people who are in a country and are a potential human resource. Economic slowdown refers to a period during an economic recession where there is a reduced economic activity. Cyclical unemployment refers to periodic unemployment, which arises from seasonal jobs. Structural unemployment refers to unemployment, which comes as a result of changes in the industry due technological changes or reorganization in the industry.
The article addresses the various challenges that face the American economy after the 2008/09 recession. Economics is a study of how human beings use the scarce resources among alternative uses. The case of unemployment presents an issue of resource exploitation, allocation, and mobilization. It depends on the choices that entrepreneurs and the government make on the resources to explore. The choices have an impact on the economic condition of a country. For example, the United States government has made a choice to cut its expenditure on education. This implies that the funds have been directed to an alternative use. The article covers the issue of unemployment in a definite manner, and it is very inspiring to policy makers. Laura D Andrea Tyson has explored several causes of unemployment and related them to the other aspects of the economy like education.
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