Unemployment rate refers to the percentage of people in a nation with the total labor force but unable to secure jobs. In most cases, people are considered unemployed if they currently are not able to get jobs despite the fact that they are willing and able to work. This limits most people in acquiring their human wants effectively, because they are not able to afford them. Unemployment has been a major tragedy in USA and other western countries the governments of these nations have tried to address this issue in various ways to ensure that people are able to secure jobs to in private and public sectors.
In USA unemployment rate has emerged in a situation where the economy has grown slowly, the economy begins to contraction or recessionary. This makes the sales of various products to declines which in turn leads to the decline of business and a slow growth rate of GDP. It has also been discovered that unemployment in the USA other countries unemployment occurs due to the instability of the state due to the fluctuation of its currencies and changes in the economy in general. When the GDP of the country is affected in most cases it creates unemployment in the country this can also lead to an economic slowdown.
The recession of the economy has also been the major causes of unemployment in the USA this is because during this business cycle there is a lot of contraction in the business. In this because during this period many businesses do not operate well which leads to unemployment for the citizens of the country. If this condition of recession is prolonged it may cause a sharp decline in economic activities leading to a depression that in turn lead to lack of jobs to many people who are in the age bracket of seeking employment.
Labor participation rate refers to the population that is in the action in the job industry. This includes the section of people who are active between the age of 16-64. This contains the major section of the population that is able to work and earn for their living participatory. Labor participatory in the USA has not been so effective this is because of inadequate opportunities that are available in the job market. This may lead to the labor to as the section of working population in the age group of 16-64 in the economy currently employed or seeking employment. People who are still undergoing studies, housewives, and persons above the age of 64 are not reckoned in the labor force.
The unemployment rate is usually used as the economic metrics to gauge the health of the U.S. job market. On the hand, the participation rate measures the percentage of Americans people who are in the labor force. The unemployment rate measures the percentage within the labor force that’s currently without a job. In the USA the labor participator rate is low comparing to the population that is in the county this leads to unemployment in the country.
Governments in most cases strive to ensure that there is a high labor participatory rate in the country.
Labor participatory has been taken seriously in the USA, people have been advised to be involved in the job market so that they ensure reduced cases of unemployment in the country. This can be done both in public and private sectors. The rate of labor participatory in the market determines the level of unemployment. For instance, when the rate of labor participatory in the job market is high there are low cases of unemployment hence the government sensitizes people in the involvement of labor task forces to reduce the cases of unemployment. Reduced unemployment may contribute to the growth of the GDP of the county.
In this case study the published unemployment rate actually misleads vis-a-vis economic conditions because it tries to give various ways of encountering with unemployment which is not addressing the issue in the right way this has a continuous long-term effect in the country because the issue of unemployment affect the whole country due to the fact that it tampers with the GDP of the nation. Unemployment has got also the negative effect on the economic prosperity of the nation this is because when many people are unemployed they involve in social misfit activities such as theft this may affect the country negatively.
Gwartney, J.D., Stroup, R. L., Sobel, R. S., & Macpherson, D.A. (2014). Macroeconomics: private and public choice (15th ed.). Boston, MA: Cengage Learning.
Guilford, G. (2018, June 7). Americans need to stop obsessing over the unemployment rate. Retrieved from https://qz.com/1297561/the-dazzling-us-unemployment-rate-is-blinding-americans-to-a-much-darker-reality/
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