America’s jobless recovery is an international issue that talks about a current economic problem that is facing the country. This article is therefore trying to explain why the country’s jobless recovery is not yet satisfactory as it is supposed to be (The Economist 1).
It should be known that the country’s labor markets are faltering which is a major issue that needs to be evaluated and looked at carefully for long term sustainability. The major economic issue here is unemployment in the country. As far as the article is concerned, the economy has started picking up well and the issue of a strong recovery was just imminent.
This is as far as adding jobs is concerned because 400,000 jobs had been created last year (till May). Unemployment is a major issue because just when Americans were hoping that things would look bright, it has increased from 9.0% to 9.1% (The Economist 3). As far as economics is concerned, lack of jobs is considered as the main cause of poverty. This is not only applicable to poor countries but even developed countries are not spared from this.
Governments have been faced with a lot of problems in trying to create jobs and this is what is facing America. As much as America’s jobs situation has been improving, there have been disruptive shocks as a result of the global economy (The Economist 2).
This means that such shocks have had far reaching complications on the country’s economy because it is not immune. For instance, bad weather and the political instability in the Middle East have affected the world economy in a broad way. Currently, the number of jobs that are available in the country can not support the population which is a major problem.
As much as there might be good measures to increase production and ensure that the economy picks up, such will not be achieved with high levels of unemployment. People will not be able to create demand in the economy because of uncertainty as far as their jobs are concerned. This means that you cannot support yourself and to a large extend your family. In the long run, the economy cannot be boosted in any way.
America’s growth has been disappointing in recent months and this is because of various reasons. Because of a slow down in economic activities, the labor market has been troubled in a broad way. It is quite disappointing that while the economy created 220,000 jobs up to April, it was only able to create 54,000 jobs the following month (The Economist 4).
This economic issue is related to economic concepts that have been learned in class. In this case, the economy is always producing goods and services but there must be a guarantee that they will be sold.
This means that with unemployment soaring up, people will not have any disposable income to support production activities. As a matter of fact, demand is created when people increase their spending on goods and services. When people loose their jobs or they are not able to find good jobs, they will always experience a shortage of money which is not good for any economy.
High unemployment rates should not be entertained in any economy based on the fact that this has a direct impact on income. Manufacturing employment in America has been going down and this increases economic woes.
In this case, people will only be interested in buying essentials yet the economy can not just but exist on essentials alone (The Economist5). All this aspects are interrelated because one thing leads to another. For instance, we all know that you can not be able to invest without making any savings. Our ability to save is always dictated by our disposable income.
This is an economic rule and concept that can not be disputed in any way. As much as people are earning some money, it is not enough to sustain an economy that is just coming from the global financial crisis. America’s ability to create jobs has been complicated by budget issues that are being experienced because of politics. In this case the expected budgetary cuts have not been effective as they had been projected to be.
The economy grew by les that 2% in the first quarter and this is not good news for the job market that needs to be stimulated (The Economist 5). People are not able to return the money that they have earned back to economy through spending which is not good.
Such a problem is only complicated by unemployment and joblessness in the economy which can not be disputed in any economic class. There is no country that will ever pick up as far as economic growth rates are concerned unless they sort out their job market and this is the situation that America is facing.
This means that there should be all efforts to solve the country’s economic woes to enhance the creation of jobs that will ultimately stimulate demand in the economy. Inflation has also been soaring in the economy and these issues are interrelated with unemployment in one way or the other. In conclusion, it can be boldly said that this economic issue is related with major economic models and concepts.
There are a lot of arguments and opinions that have been discussed in this article in relation to unemployment and joblessness in America. Various firms are growing nervous to continue hiring and this is because of the state of the economy. In this case, the economy has been subjected to a lot of external shocks that have had far reaching implications that need to be looked at (The Economist 1).
As much as the crisis in Europe shook up markets, the economy was only able to pick up after the stimulative asset purchases. Therefore, the article argues that the economy has not been able to pick up because of these disruptive shocks. Everybody seems to be in agreement that the economy has been disappointing as far as economic growth rates are concerned which explains a slowdown in labor activities. In this case, the unemployment rate in the country has been rising as time goes by which is not good at all.
As much as the number of jobs that are being created is not satisfactory, the country has the potential to create more jobs. In this case, there should be concreted efforts to promote a healthy environment that will make this possible by all means. All opinions point to the fact that it is not hard to see the source of the country’s economic woes meaning that something right is not being done.
For instance, manufacturing employment has been going down which indicates that what they are producing is not being bought or consumed by the economy (The Economist 6). In this case, there is no manufacturer who will be able to incur high labor costs yet their goods and services are not selling well in the market.
As a matter of fact, most manufacturers are involved in cost cutting measures to continue being in business and the most notable way of reducing costs is by cutting jobs. There is an argument that retail trade employment has been going down which needs to be sorted out. This is a clear indication that people are not spending enough because the economy has a lot of nervous consumers which can not promote growth.
America’s job problems can be said to be self made but this depends on the approach that this aspect is given. In this case, as much as the private sector has been increasing jobs, the government has also shed the same number of jobs that have been created by the private sector.
The drag on the national economy has been complicated by federal aids that have not helped in creating jobs (The Economist 7). All this problems are being brought about by budget issues that need to be looked into. The economy had been projected to grow by more than 4% but this will depend on various issues that need to be looked at and evaluated based on the role that they play (The Economist 5).
All in all, the debt-ceiling battle is another issue that will increase uncertainty in the economy thereby limiting its ability to create jobs. In this case, politicians should stop bickering because this will lead to the country being downgraded as far as its debt rating is concerned. Financial markets in the country are not stable and this mans that there should be no complications that will worsen the situation of jobs.
I agree with the analysis that has been done in the article because this is the true situation in the country which needs close scrutiny and attention for long term sustainability. The country’s economy is picking up but there is need for cautiousness and restrain when dealing with all aspects that have a bearing on economic performance. Currently, the global economy has not recovered and this is because of various reasons.
For instance, the Middle East crisis has had a lot of impacts and negative effects on oil which is a major factor of production. On the other hand, the earthquake in Japan disrupted market activities because the country is a major world economic player (The Economist 1). In this case, America can not cushion itself from such events but there should be good measures to jumpstart the economy. As a matter of fact, there is a lot of volatility that will ultimately have an impact on the country’s economy.
Inflation is a very big problem that should be sorted out because it negatively slows down economic growth rates. In this case, it reduces individuals’ disposable income thereby limiting their spending. This is well elaborated by the article where there are all indications to show that retail trade employment fell drastically. This was brought about by nervous consumers who are not ready to spend because of their limited income.
In the process, a lot of jobs have been lost because of a slow down in spending which should not be encouraged in any way. I also agree that the country’s job problems are self inflicting based on the measures that have been taken to increase jobs. This is based on growth rates that have been disappointing (The Economist 8). There are a lot of sensible job realizations that need to be evaluated as time goes by.
As an economist, I would say that as much as the country is exposed to a lot of external problems like oil fluctuations, there should be enough measures to cushion the economy that is still growing. The country has a big labor problem that is supposed to be given the attention that it deserves.
Many Americans are not comfortable with an unemployment rate of 9.1% which will further complicate the situation. In this case private firms have shown that they have the potential to increase and create jobs if they are supported well (The Economist 6).
There are all indications to show that the country’s retail sector is not performing well and this can related to a slow down in spending. In this case, consumers are very nervous because of their little disposable income. This means that they have to trim down their spending. In such scenarios, the country will not witness and encourage any meaningful investment activities because people’s income has been reduced by inflation.
America is not creating enough wealth based on its current economic growth rates which is not good for the labor market. A country can not progress and move forward with a high unemployment rate because people will not be in a position to save. Instead of saving, people will spend what they have which is very disastrous in the sense that economic activities will not be supported effectively.
Based on prevailing trends in the global economy, the country should come up with good measures to promote growth because such aspects will ultimately make matters worse. In this case, internal issues like inflation should be checked to ensure that people’s income is not eaten up in any way (The Economist 4).
In addition, it will be better if issues that revolve around the federal budget are handled well to aid financial markets. This is because the market is still shaky and any slight mistake will hurt the world’s financial system (The Economist 8). Currently, the country’s labor market is still vulnerable and there should be no room for mistakes.
The Economist. America’s jobless recovery- Not again. 2011. Web. 8 June. 2011. http://www.economist.com/blogs/freeexchange/2011/06/americas-jobless-recovery