The
U.S. unemployment rate is very low right now at 4.2 percent. Although this
makes it seem like there wouldn’t be any major issues in the labor force, there
is. The issue is that only 63% of American adults are even in the labor force.
This shows that many of the possible employees have just stopped looking for a
jobs because of the frustration that comes along with not being able to find
one or possibly due to a lack of qualifications. A lot of people tend to blame
the shortage of family sustaining jobs which a majority of these would fall
under the category of either manufacturing or healthcare. These jobs are not to
blame with 6.1 million new manufacturing jobs and 1 million new health care job
openings as of August of this year. The three main mismatches that are believed
to be causing all these issues include the skills mismatch, geographic
mismatch, and the expectations mismatch. The skills mismatch basically means
that there is a disconnect between the skills that would be expected by an
employer and the skills that job seekers actually have. The geographic mismatch
has to do with an issue between where jobs are and where job seekers live which
ties into the expectations mismatch which has to deal with the incorrect
assumptions of where jobs are in high demand. These three mismatches are the
real reason for 37% of American adults not be in the labor force and is a
problem that needs to be dealt with.
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ReplyDeleteAnother possible reason could be the age and retirements expectations for many Americans. Workers have unrealistic expectations for when they should retire; across advanced economies the retirement age has been steadily rising due to the longer life expectances. For example, my parents retired at 60. They are both able bodied and could work however choose to pull on Social Security. Another complication is that companies realize that an older workforce can be useful and have adapted some hiring techniques to target the 65+ age range. This leaves out the late fifties and early sixties demographic. While social security itself will have huge problems with the number of baby boomers in the coming years, the cultural expectations of retirement also need to change.
ReplyDeleteClearly creating jobs without proper understating of why people were left out would be a major disaster. Though the government is capable of making the vacancies, it can not actually force people to go to work. Government support centers created, demotivation to people to work. Despite just offering jobs, government should also increase incentives to motivate the employees and give a reason for them to work. To my knowledge their is always and will be some unemployment in a country. No country has been able to reach unemployment level to zero. The best way to assess the job opening by government is through cost and benefit analysis.
ReplyDeleteThe unemployment rate, as it is measured, has and will not be a good measure of the employment numbers in the United States. In fact, the United States has an obligation to work to keep the unemployment rate below 4% (Source: Professor Bereskin). This can have a drastic effect on the actual unemployment rate. According to the Phillips Curve, the economy will reach an equilibrium point of unemployment, and there will be nothing the government can do in order to decrease it. Any decrease at that point will lead to an increase in inflation, and the unemployment rate will return to what it was before.
ReplyDeleteAs far as the amount of people no longer seeking a job, I believe everyone is correct in their thoughts on the changes which need to be made. However, I think seeking only one solution to the problem at a time has had a very negative effect on the potential for a successful solution. Policy makers should look at all possible solutions combined in order to determine the best way for more individuals to be employed, or at least seeking work.