An Analysis of the Unemployment Rates in USA

Oneof the responsibilities of governments around the world is to ensurethat they provide a steady source of income for its citizens. Whenthe citizens do not have a source of income, then the governmentwould be failing in its mandate. The government needs to seekcontinuously new avenues that can create employment for its citizens.When the population of the country that is ready to work does not getemployment opportunities, they are said to be unemployed. The rate ofunemployment has been increasing in the world over the years, andthis has remained to be one of the challenges to the economies ofnations. Unemployment comes with fare shares of challenges includinga stagnating economy increase in crime among many other socialproblems. What is unemployment?

An economic perception and understanding of employment argues that itoccurs when people stay without work yet they are actively searchingfor employments. Conversely, the unemployment rate is the percentageof the people that are actively searching for work in relation to thepopulation of employed people in the country. The percentage isarrived at by dividing the number of people that are unemployed andthe number of people that are employed. The cause, effect andsolution to employment vary. The variation always depends on the typeof unemployment that exists in the country. Each country might have adeferent type of unemployment or at times might have all three typesof unemployment. The table provided below indicates the unemploymentrates in the United States from the year 1950 to 2010. It is evidentfrom the table that the rate of unemployment has been increasingsteadily over the years, but the years proceeding the year 2010 saw arapid increase in unemployment. This will be disused better in thelater stage.

Typesof unemployment

Wheneconomists talk about unemployment they would always categorize itinto three distinct types, frictional, cyclical, and structural. Mosteconomists will argue that the first two type of unemployment are nota big problem. They say the two refer to people moving from one jobto another and those that are laid down temporally during theeconomic downturn. The third type refers to people that are totallyout of the labor market. It is referred to as the mismatch betweenthe number of people seeking jobs and the availability of the jobs.The problem of this type of unemployment is to the people that arelooking for the jobs and also the environment in which they exist in.This type of unemployment has a great effect on the social securitybudgets too. A good analysis of these types of unemployment gives apicture of what they exactly mean.

Structuralunemployment

Anyeconomic system will always experience structural unemployment as themain type of unemployment. This type focuses much on the structuralproblems that exist within the economy. This also refers to theinefficiency in the same labor market. Such kind of unemployment willoften occur when the economy does not have the capacity to providethe jobs for all the citizens that are looking for employment. Italso refers to the mismatch in the skills of those that areunemployed and the skills that are needed for the jobs that areavailable. This often happens when people train much in some skillsand fail to train in others. It would happen that there are jobs in aparticular skill, but the people trained in that skills are notavailable. Constant cyclical unemployment often occasions structuralunemployment. A good example is when the country experiences constantunemployment, the people become frustrated, and the thus their skillsbecome obsolete. When the economy recovers these people’s skillswill not fit the requirements of the new jobs that have been created(Armstrong).

Frictionalunemployment

Apartfrom structural unemployment an economy must experience frictionalemployment. This type of unemployment occurs when a worker has left ajob and is now seeking a transition to a new job. Though in a smalldegree, this type of unemployment can never miss existing in aneconomy. This type of unemployment often comes about when there is amismatch between the jobs and the workers. There are many issues thatmight result to this situation. These include the work time, payment,skills, seasonal industries, attitudes tastes location and many otheraspects. This situation usually takes place as a result of theworker’s voluntary decision to leave work basing on their valuationof the work versus the payment (Thirlwall). Such type of unemploymentis not often a serious problem to the economy. It does not affect thedevelopment of the country, and many economists think that it isexpected for such an employment to exist at minimal rates (W, 2014).

CyclicalUnemployment

Thisis the type of unemployment that occurs because the aggregate demandin the economy does not provide the opportunity for everyone thatwants a job. When an economy experiences the fall in the demand forgoods, the production will reduce, and fewer workers will be needed.In a cyclical unemployment, often the number of job opportunitiesavailable is lower than the demand for jobs. Such type ofunemployment keeps on fluctuating in the economy and does not alwayspose serious threat to the economy.

Naturalunemployment rate

Thoughunemployment might be a problem to the economy, there are situationsthat the rate is within levels that the economy can contain. Such anemployment is often referred to as natural unemployment rate. Thistype of unemployment is also referred to as structural unemployment. Friedman and Phelps developed the analogy in the 1960s. When theaggravate production is constant to the hypothetical unemploymentrate, then the economy will be said to have a natural unemploymentrate. Such a situation will often mean that there is an expanding andefficient economy and that the labor and the resources are atequilibrium. Such type of unemployment will only occur when theeconomy does not experience any disturbances.

Unemploymentrates in the U.S

Inthe United States, the rate of unemployment has averaged at 5.10percent in the September from 5.10 percent in August 2015. From theyear 1948 the unemployment rate has averaged at 5.83 till 2015. Thehighest pick was in November 1982 when it went up to 10.80 and lowestin 1953 when the rate was 2.50 percent. These reports are from theU.S Bureau of Labor statistics.

Examining the chart indicates that the rate of unemployment has beenreducing from the past years. Over the period, the rate has gone downfrom 5.8 in October 2014 to 5.1 in October 2015. The past year hasseen a general drop in the rate of unemployment in the country.

The rate of unemployment also varies from state to state. The tablebelow shows the variation in the unemployment rate from state tostate.

Unemployment Rates for StatesMonthly RankingsSeasonally AdjustedSept. 2015p

Rank

State

Rate

1

NORTH DAKOTA

2.8

2

NEBRASKA

2.9

3

HAWAII

3.4

3

NEW HAMPSHIRE

3.4

5

SOUTH DAKOTA

3.5

6

IOWA

3.6

6

UTAH

3.6

8

VERMONT

3.7

9

MINNESOTA

3.8

10

COLORADO

4.0

10

WYOMING

4.0

12

MONTANA

4.1

13

IDAHO

4.2

13

TEXAS

4.2

15

VIRGINIA

4.3

15

WISCONSIN

4.3

17

KANSAS

4.4

17

MAINE

4.4

17

OKLAHOMA

4.4

20

INDIANA

4.5

20

OHIO

4.5

22

MASSACHUSETTS

4.6

23

DELAWARE

4.9

24

KENTUCKY

5.0

24

MICHIGAN

5.0

26

MARYLAND

5.1

26

NEW YORK

5.1

28

ARKANSAS

5.2

28

CONNECTICUT

5.2

28

FLORIDA

5.2

28

WASHINGTON

5.2

32

MISSOURI

5.3

32

PENNSYLVANIA

5.3

34

ILLINOIS

5.4

34

RHODE ISLAND

5.4

36

NEW JERSEY

5.6

37

SOUTH CAROLINA

5.7

37

TENNESSEE

5.7

39

GEORGIA

5.8

39

NORTH CAROLINA

5.8

41

CALIFORNIA

5.9

42

ALABAMA

6.0

42

LOUISIANA

6.0

44

MISSISSIPPI

6.1

45

OREGON

6.2

46

ARIZONA

6.3

47

ALASKA

6.4

48

DISTRICT OF COLUMBIA

6.7

48

NEVADA

6.7

50

NEW MEXICO

6.8

51

WEST VIRGINIA

7.3

There is a general concession that the unemployment rate is affectedby the forces in the labor market. When the economy experiences adownturn, there is a possibly of the rate of employment going up, andrise in economy reduces the unemployment rate. This is wellelaborated by the graph below

Retrievedfrom the U.S. BLS (Bureau of Labor Statistics)

Year

Jan

Feb

Mar

Apr

May

Jun

Jul

Aug

Sep

Oct

Nov

Dec

2005

5.3

5.4

5.2

5.2

5.1

5.0

5.0

4.9

5.0

5.0

5.0

4.9

2006

4.7

4.8

4.7

4.7

4.6

4.6

4.7

4.7

4.5

4.4

4.5

4.4

2007

4.6

4.5

4.4

4.5

4.4

4.6

4.7

4.6

4.7

4.7

4.7

5.0

2008

5.0

4.9

5.1

5.0

5.4

5.6

5.8

6.1

6.1

6.5

6.8

7.3

2009

7.8

8.3

8.7

9.0

9.4

9.5

9.5

9.6

9.8

10.0

9.9

9.9

2010

9.8

9.8

9.9

9.9

9.6

9.4

9.4

9.5

9.5

9.4

9.8

9.3

2011

9.2

9.0

9.0

9.1

9.0

9.1

9.0

9.0

9.0

8.8

8.6

8.5

2012

8.3

8.3

8.2

8.2

8.2

8.2

8.2

8.0

7.8

7.8

7.7

7.9

2013

8.0

7.7

7.5

7.6

7.5

7.5

7.3

7.2

7.2

7.2

7.0

6.7

2014

6.6

6.7

6.6

6.2

6.3

6.1

6.2

6.1

5.9

5.7

5.8

5.6

2015

5.7

5.5

5.5

5.4

5.5

5.3

5.3

5.1

5.1

&nbsp

&nbsp

&nbsp

Retrievedfrom the U.S. BLS (Bureau of Labor Statistics)

Conclusion

Itis evident that the economy of the country greatly affects theunemployment rate of the country. The data collected shows that whenthe country was experiencing an economic downturn that is the sameperiod the country experienced the highest rate of unemployment’s.There is an inverse proportionality between economy growth andunemployment rate. Between the years 2007 and 2013 the rate ofunemployment was quite high. This was the same period the economy ofthe US experienced a downturn. As the economy has progressed, therehas been a steady reduction in the rate of unemployment. Such type ofunemployment is termed as structural unemployment. It keeps onchanging with the economic situation of the country. It is quite hardto deal with such type of unemployment, and its effect is adverse tothe country’s economy.

Unemployment is a problem that has exited form many centuries to boththe developing countries and the developed countries. There is nopoint in time that the economy can fully support its population ofworkers. It is always expected that at one point there is expected tobe one form of unemployment. The most important thing thatgovernments need to handle is to ensure that these rates are held atnormal limits.

Works Cited

Armstrong, H., and J. Taylor.&quotThe Measurement of Different Typesof Unemployment.&quotThe Economics of Unemployment in Britain(1981): 99-121.

Bureau of Labor Statistics (BLS),. `Unemployment Rates For States`.N.p., 2015. Web. 30 Oct. 2015.

Data.bls.gov,. `Databases, Tables &amp Calculators by Subject`.N.p., 2015. Web. 30 Oct. 2015.

Statistics, US. `Civilian Unemployment Rate`.Research.stlouisfed.org.N.p., 2015. Web. 30 Oct. 2015.

Thirlwall, Anthony Philip. &quotTypes of Unemployment in the Regionsof Great Britain.&quotThe Manchester School 42.4 (1974):325-339.

W, C. `The Three Types Of Unemployment`. The Economist.N.p.,2014. Web. 30 Oct. 2015.