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AP English Literature 1
Mr Janosch
11/30/2018
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Jon Creek, who lives in Cincinnati, Ohio, was a construction company office manager
until he was laid off in December 2007. He was stunned when he received his final paycheck.
His job was over. The harsh part was that his boss posted it on facebook before telling him.
Everyone knew but him. “I worked hard, I did everything right,” he says. Ever since he has been
looking for a job. Being unemployed not only hurts financially but also leaves emotional scars.
“It’s very isolating, very lonely,” he says. It’s not just about the salary, it’s about being able to go
out and say, I do this. “This is my identity,” says Creek, who has an $11,000 student loan. (AP)
“Unemployment is an indicator to the total number of people who are willing to work but
can’t find jobs. The unemployment rate in the US now is at a 3.9 percent.” That is the lowest it’s
been since 1969. The government finds the unemployment rate based on two surveys. The first
survey, the Establishment Report, asks a sample of random employers how many people are on
their payroll. The second survey, the Current Population Survey (CPS), asks approximately
60,000 households how many people are currently working or looking for a job. The responses
help produce an estimate of unemployed people (Krulick). Most recently, from a low of 4.7
percent in 2008, it took a peak to 10.1 percent in 2009. Aside from the low levels of
unemployment before the recession (when it hit 2.5 percent), it normally bottoms out to a 3.8 or
3.9 percent. “If the unemployment rate stayed at a 3.9 percent, it would be healthy for the
economy but that almost never happens.” It usually goes upward as soon as it hits the low.
Because the rate is an indicator, it’s possible there is a gap in the economy. If so, there may be
room for improvement. None of this means there is about to be another recession but historical
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data suggests that even the most positive economic news may bring ill tidings. Unemployment
doesn’t affect the economy alone but also the individual. Unemployment in a long term can
cause emotional and psychological destruction (Mihm). Because unemployment can cause
workers to lose their skills and cause gaps in the economy, the United States should create new
“The United States started to keep track of the rate of unemployment in the 1950s.” They
were still able to ascertain that the Great Depressions’ unemployment rate was 23.6 percent. The
lowest rate was a 1.2 percent in 1944 during World War 2. The lowest post-war rate was a 2.9
percent in 1953. The United States faced 11 recessions since the end of the postwar period. In
the 1980s, the rate dropped to 10.8 percent, falling to a 5.3 percent by the end of President
Reagan’s second term. During George H. W. Bush’s term it went back up to 7.5 percent. During
Bill Clinton and George Bush’s term it remained in between 4 and 6 percent. It stayed above 8
unemployment occurs when a person is searching for a new job or is transitioning between jobs.”
An example would be seasonal employment such as agriculture and construction. Because the
work is done for the season, the workers then become unemployed. “Structural unemployment is
when there is a mismatch in the industrial composition of a local economy.” For example the
worker is specialized in a background that cannot be used in the industry they work in. They lack
the skills to perform. Another example is where an area has workers with no available jobs.
“Cyclical unemployment is when there is not enough demands for goods and services in the
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economy to provide jobs for everyone.” It occurs when consumers have less money to spend on
goods causing layoffs and more unemployment. An example would be an auto worker. They can
be laid off during a recession when less people buy cars. The automakers don’t need as many
Unemployment affects the society in many ways. “It affects the individual who is
unemployed with their income and health.” They won’t be able to pay off their bills and buy
essentials necessary for everyday life such as food. This often leads to stress and depression
which can affect your health. “A Pennsylvania study found that unemployed workers died more
than a year earlier than average.” There are also social consequences of unemployment such as
crime. A study confirmed that people who are unemployed for “socially unacceptable reasons”
are “significantly more likely” to commit robbery or burglary. Another effect of unemployment
is in the economy. “When unemployment increases both state and federal governments pay
increased benefits.” The government has to borrow money to pay for these unemployment
benefits causing a gap in the economy and reduce spending in other areas. (Gleeson)
the biggest type of unemployment. Because it is related to and can contradict the business cycle,
it can lead to recessions. “The primary method is the expansionary monetary policy. It is when
the Federal Reserve changes the policy by reducing the federal funds rate.” It is when the central
bank uses its tools to stimulate the economy. This will increase the money supply, lower interest
rates, and increase aggregate demands. Lowering the interest rate will cause businesses to
borrow money to buy equipment and hire more workers. This will also boost the market and
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other personal consumption spending such as auto sales. “The second way the government
reduces unemployment rate is through the expansionary fiscal policy.” That is when the
president and congress directly create jobs by spending more on government projects. An
example was the New Deal by President Franklin D. Roosevelt. Another way is by giving people
more income to spend by cutting taxes. For example, the Bush and Obama tax cuts in 2001 and
2010. A decrease in taxes communicates to the businesses that the government is interested in
reviving the economy. “Often times the unemployment is uncontrollable when people are in
between jobs (frictional unemployment).” This type of unemployment is healthy for the
economy. This means that the workers will be free to quit jobs in pursuit of a better one
(Amadeo).
Because unemployment can cause workers to lose their skills and cause gaps in the
economy, the United States should create new and better jobs. In order to maintain a healthy
economy and prevent a recession, the government should encourage exports, reduce interest
rates, cut taxes and focus on infrastructure development. As individuals, we can avoid
Work Cited
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Amadeo, Kimberly. “What Is Being Done to Control Unemployment?” The Balance Small
AP. “These Stories Of The Long Term Unemployed Will Make You Want To Get Down On
Your Knees And Thank Your Boss.” Business Insider, Business Insider, 12 Feb. 2012,
Gleeson, Patrick, Ph.D, “The Overall Effects of Unemployment.” Small Business - Chron.com,
Krulick, Al, Staff Writer. “United States Unemployment - History, Causes & Consequences.”
Mihm, Stephen. "Unemployment hits a low. Then comes the recession." Indianapolis Business
http://link.galegroup.com/apps/doc/A541638380/GPS?u=nysl_me_73_shb&sid=GPS&xi