Unemployment in the Great Recession - Free Essay Example

The Great Recession was an economic disaster that made an effect on world financial markets. Along with banking industries and real estate industries. This disaster led to high increases in home mortgage foreclosures all over the world. It caused tons and tons of people to lose their savings, jobs, and even their homes. The Great Recession is considered to be the longest period of economic decline since the Great Depression of the 1930s. (History.com Editors). A main factor in the Great Recession was unemployment which is what I chose to talk about for my paper. Going into unemployment there are two factors that cause the official unemployment rate to understate actual unemployment. One of those factors is they are part time workers and they are counted as employed. The second factor is discouraged workers who want a job, but are not looking for one, they also are not included in the labor force, which means they are not part of the unemployment statistic. In unemployment there are three types, which include frictional, structural, and cyclical. The one we had to know was cyclical unemployment which was caused by the recession phase of the business cycle. One of the first articles I chose talks about the Unemployment and the Great Recession. One of the first things reading this article was talking about typically the unemployment rate rises whenever the total economy goes under a recession. Then we get into two counts the first one is unemployment has rose much more than in typical recessions and the second count is unemployment rate had stabilized itself high for an extremely long time. Tasci gets into talking about the Federal Reserve Bank in Cleveland and that it shows increases in unemployment rates from cyclical factors. They told the readers that the factors that ordinally would have only a temporary effect and should gradually fade as the economy recovers. Which is the good news but here is always bad news with good news so here is the bad news is that they have found at least two reasons why the unemployment rate could stay high for some time. Those two reasons are the weakness of the recovery in real economic output and the s low rate at which workers find new jobs. (Tasci). This article mentioned that unemployment rate reports the number of jobless workers as a fraction of the labor force which we covered in class. Which the labor force is only made up of unemployed and employed workers. Being in the labor force we have some employed workers lose their jobs and becoming unemployed but then they work hard and find a new job becoming back to employed. Which finding new jobs means you are being hired but, in this article, they said one of the subsequent rises in unemployment results was not from layoffs but from a low hiring rate. Tasci and his colleague Zaman came up with some new measurements of the long run unemployment rate that ties in worker flows into the analysis. They said this helps them because it distinguishes between two potentially different reasons for a high unemployment rate. Those two reasons are one being long periods of unemployment for laid off workers and the very high number of layof fs overall, and the second being underlying trends in these flow rates determine where the unemployment rate will settle in the long run. (Tasci). In my second article I chose it talks about the job deficit and the long-term unemployment problem. It starts off giving us information about the unemployment rate and how in 2009 was ten percent in the fourth quarter and it told us that even today the unemployment rate is even higher than the ten-point eight percent postwar unemployment peak in the 1982-83 recession. Something the article talked about was payroll employment and in March 2010 everyone saw some modest employment growth which was one hundred sixty thousand. Which all that goes to something that this article is all about which is that we currently have a current jobs deficit of ten point six million. (Katz). So, when I read that I did not know what it meant until it explained further which was that we would need ten point six million more jobs today to just get back to the employment rate. We are told that unemployment increased the Great Recession and that it disproportionately affected workers from good industries, yo ung workers, and non-college workers. I wanted to use this article because it supports my other article in talking about cyclical unemployment. Our labor market in the early 2009s followed cyclical negative relationship between job openings and unemployment. So, this means unemployment in 2009 looked really bad but normal cyclical unemployment increase. Going into an outward shift curve actually increased structural labor market problems. Which we still have a massive cyclical unemployment issue with a huge shortfall of aggregate demand and the real GDP. Which both aggregate demand and GDP was discussed in class. Aggregate demand is an economic measurement of the sum of all final goods and services produced in an economy, expressed as the total amount of money exchanged for those goods and services (www.investopedia.com). Gross domestic product (GDP) is the monetary value of all the finished goods and services produced within a countrys borders in a specific time period (www.investo pedia.com). We were told that most of the rise of long-term unemployment reflects the cyclical collapse of aggregate demand and labor demand. When the hire rates remain low for a sustained period, labor markets, and reentrants are unable to get work quickly and have a huge chance of becoming in the field of long-term unemployment. In my last article I chose was about unemployment and the Great Recession and Beyond. The beyond part is talking about at least in this article is about Northern European, Germany, and the Netherlands, which we didnt really talk about, but when I went back to our notes and looking at all the graphs we had they were mentioned. This article told us about the Great Recession and how it severely affected the economic scene in many countries. A term we went over in class was GDP growth and that the article told us it was negative in some countries during the period 2008-2009. The huge economic issue has led to a decrease in employment growth and also a decrease in our labor market rate and an increase in unemployment rates in many countries. Like all the other papers this one also told us that the Great Recession is scarce, but also added that knowledge about mechanism and consequences in increasing. It talked about how the Great Recession unemployment has rose dramatically. The unemployment rate has doubled from four percent in 2008 to over eight percent in 2014. (Weel). In this article it told us it compared to many of its Northern European peer countries and Germany, and the Netherlands which they all experienced stronger unemployed growth and lost its leading position in terms of low unemployment rates. We get into the big shock which can be absorbed by price and or quantity adjustments. Our analysis showed us in this article that at a relatively large part of the adverse shock translated into unemployment. As a result, to all of this the Netherlands faced a relatively strong increase in long term unemployment. I found that doing this research on the Great Recession which is again was an economic disaster that made an effect on world financial markets. Along with banking industries and real estate industries. This disaster led to high increases in home mortgage foreclosures all over the world. It caused tons and tons of people to lose their savings, jobs, and even their homes. The Great Recession was very interesting topic to talk about and even learn more about and finding articles that tied into our class discussions was very interesting as well and I say that because we were able to go and pick three articles of whatever topic we wanted that tied into our lectures. I thought finding what we talked about in class was going to be very hard to find in articles and being able to understand them. Once I read the articles and saw certain key terms we have gone over then the article made more sense to me. Overall the Great Recession was not a good thing to people who had jobs. A lot of people w ere laid off, being laid off you dont have a job anymore and during that time it was a low percent on hiring people because of money. A lot of people lost a lot of stuff in the Great Recession. It didnt affect everyone but did affect a great amount of people. All three of my articles tied into each other talking about cyclical unemployment, unemployment its self, GDP, labor force and labor markets. All three of the articles I did not criticize them, I used all of them as in a positive way giving good information and they each had some different aspects to put in my paper and also had relating topics in each article. Reading other articles that I did not choose some were even talking about we may have another Great recession later on in like year 2020. Which I really hope does not happen because a lot of people are already having issues getting jobs and trying to pay for things such as their homes, family, and bills, but this was a great topic to talk about and learn about.