Law

The Principles of Economics Applied in Real Life

John Doe Article: Job Losses in the U.S. Slow Source Information: Trading Economics. Bloomberg. June 5th 2009 room Topics: Law of Supply. Law of Demand
The United States economy has been struggling a lot during past year due to the global economic recession that has affected all nations throughout the world. In the US one of the worst symptoms is the rising unemployment. The supply of available jobs is not sufficient to meet the demand of workers looking for positions. The unemployment rate in the United States used had been hovering below 5% for the past few years. During the past year the unemployment rate in the United States has nearly doubled to reach the mark of 9.4% as of June of 2009.
It seems as if every week we hear news of massive layoff in corporate America. One of the latest major layoffs occurred at GM which let go of over 20,000 employees as the company filed bankruptcy. The severe job loss has implication at the micro and macro economic level. Since less people are working in America it means that the amount of money in circulation in the economy is lower. When there is less money moving around there are many symptoms that occurred as consequence of such an economic environment. Business activity lowers because the demand for goods from consumer diminishes due to their ability to afford the goods and services they used to purchase when they were employed. Auto manufacturers such as GM, Chrysler, and Ford are impacted as their overall levels of production supply goes down since there are not as many potential customers in the marketplace that can afford to purchase a new vehicle.
The government is affected by the rising unemployment. Suddenly the demand for governmental programs and assistance goes up as more people become unemployment. The amount of participants of programs such as unemployment benefits, welfare, and student scholarship programs goes up. Many unemployed persons choose to back to school in order to keep these occupied and achieve professional development while they wait for the economy to begin producing once again so they can become a part of the workforce once again. During these harsh economic times some industries actually benefit and the demand for there products and services goes up. An example is the fast food industry and other cheap food establishments. People can not afford to eat at luxury restaurants, thus they meet their needs to go out and take family out to eat by going to neighborhood food stands and other lower price establishments.
The recession which according to economic experts started in December of 2007 has costs the United States a total of 6 million jobs. If we assume that on the average these jobs generate workers $30,000 a year, the loss of revenue in the economy is upwards of $180 billion a year in wages alone. We are facing some tough economic times, but there is light at the end of road. Despite the rising unemployment rate last month the loss of jobs amounted to 345,000 jobs which is the lowest monthly total during the last eight months. Hopefully contraction in the job market will not continue for too much longer and we move forward to the second decade of the 21st the US economy will climb once again.
References
Tradingeconomics.com (2009). Job Losses in the US Slow. Bloomberg. Retrieved June 6, 2009 from http://www.tradingeconomics.com/Economics/Unemployment-rate.aspx?Symbol=USD&amp.File=06052009083926.htm

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