Unemployment In The United States Essay

Unemployment Rate in the United States

The article “U.S. Unemployment at 16-year low, but Economy’s weak spots remain’” by Patricia Cohen, argues that the rates of unemployment sank in May, 2017 to 4.3 which is the lowest rate it has so far reached in a period of 16 years. The growth of wages as well as the declining labor force led to the realization of the stubborn weak spots of the economy. The article discusses several key points which are highlighted below.

i. The dynamics of labor demand

Unemployment highly depends on the general population as well as the dynamics of labor demand. This is generally the active population that has the willingness to work in a specific age range. According to Cohen (2017), the increase in the unemployment

Basically, unemployment results to increased payments from both the state and the federal government to cover benefits of unemployment. For instance, the U.S government paid up to $2.96 billion worth of benefits in February, 2017. The government also has to cover to Medicaid and food assistance costs (Simpson 2017). Additionally, with high levels of unemployment, the government is unable to collect the similar amounts of income tax as compared to when the unemployment rates are low, which slows down the economic growth of the country. This is because the government is forced to borrow money or even cut down spending which to a large extent leads to an economic condition that is no good at all. Moreover, unemployment is a very bad condition to the economy of the United States considering the fact that more than 70% of the total production in the United States goes to personal consumption as well as unemployed workers. Not even the people who get support from the government are capable of spending as per their prior rates. Thus, the production of those workers who end up unemployed leaves the country’s economy leading to a reduction of the country’s GDP (Simpson,