Although it would be nice if there were one single cause of unemployment in the U.S., one that could be simply, if not expediently, rectified, the fact of the matter is that this is not the case. “Unemployment rates are probably the best indicators of the economic health of a nation,” and to this end, the figures are released on a month to month basis by the United States government (Evans, 2015, p. 157). In spite of the knowledge that unemployment works to indicate the health of the nation, and in spite of the fact that not all causes and effects of unemployment are known, there are still a great many that are known, including the political party in power, the ratio of imports to exports of the nation, and global recession (Evans, 2015; Kelly & Witko, 2014; Tong, Tong, & Tong, 2012). Understanding these predominant causes and the effects of the same serves to provide a greater insight and understanding into how this particular economic indicator functions, and even what can be done to work to address the matter.
Looking first to the matter of government ideology, research has shown that unemployment is most likely to be lower when the Democratic party is in power, and when that individual leans more to the liberal side of things than the conservative (Kelly & Witko, 2014). The reason for this is not that the Republican party or the conservatives are less in favor of reduction of unemployment, but that Republican and conservative party members are more likely to be in power during times of recession and economic downturn, resulting in increases in unemployment that they lack the resources to be able to address due to those very same economic conditions (Kelly & Witko, 2014). As a result, when the economic downturns are decreased, individuals who are Democratic and liberal are more likely to gain votes, and thus gain power (Kelly & Witko, 2014). This effect may be largely psychological, with times of economic downturn being associated with cutting back, while times of prosperity are associated with indulging, creating ideal conditions for a liberal candidate to step in and do more with ideas that are more far-fetched than would be possible at any other time.

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Within the past few years, the cause of the highest levels of unemployment within the nation stems from the recent global economic recession (Tong, Tong, & Tong, 2012). This recession caused issues with financial institutions, credit ratings, regulatory agencies, the housing market, downturns in consumer wealth, rising debt, rising healthcare costs, fluctuations in oil prices, pressure from overseas, and was further contributed to by financial downturns in other countries in Europe, creating a downward spiral in the job market and the economy, one from whence it became difficult to climb out of, one that the world still has not fully recovered from (Tong, Tong, & Tong, 2012). The causes of the global recession were many, working in domino effect to ultimately reduce not only the economic prosperity of this nation, but of most other developed nations as well, creating a host of effects. With the failures of financial institutions came failures in the credit rating agencies and regulators, which dominoed into the failures in the housing market, creating declines in public wealth, and working to affect imports and exports, which served to contribute to the financial woes and economic downturns in other nations as well, further compounding the problem (Tong, Tong, & Tong, 2012). Only recently are we starting to see the housing market come back, but it is still not as strong as it was before, and additional concerns are still present concerning the financial industry, personal wealth, and indeed all other areas that were affected.

In addition to all of these concerns, the fact that the U.S. has become more of an importer than an exporter, something that started in the late 1980s and has continued through today, has worked to further contribute to declines in unemployment (Tong, Tong, & Tong, 2012). No longer is the nation one of factories and assembly lines, the very aspects that worked to further boost the prosperity of the nation through giants like Ford and Rockefeller and Carnegie, but instead we have become a nation who willingly shuts down its plants, voluntarily outsources its jobs, and, in doing so, decreases the very thing that serves to provide prosperity to the nation. In removing jobs from this country, the U.S. places herself more at the mercy of imports each day, which in turn works to reduce the overall potential for employment found within the U.S., as the jobs that used to be available are instead being negated and done for less elsewhere (Tong, Tong, & Tong, 2012).

It is clear that there is much that must be done and many areas that must be addressed if the matter of unemployment is to be resolved within the U.S. It is likewise clear that, based on unemployment facts; this country has a long way to go to be great again. Unemployment concerns within first world and developed nations remain, as they have been since the 1970s, high (Srinivasan & Mitra, 2014). In spite of the fact that such rates are higher than they were in decades past, it is possible to see that there is a cycle of fluctuation, an ebb and flow in the rates of unemployment that are brought about by a variety of causes (Srinivasan & Mitra, 2014). It is clear that there is much that must be done and many areas around the globe that must be addressed if the matter of unemployment is to be resolved. While some studies indicate that the number of those who are unemployed are in continual decline, indicating that the prosperity of the nation is returning, others indicate that these numbers do not tell the true picture, as those who have run out of unemployment benefits simply stop filing for them, no longer being counted as a statistic, creating a disparity, a gulf of individuals who remain unemployed, but fail to come up on the register of those who count. In spite of this argument, officially, unemployment numbers are decreasing, and the U.S. is on the way back to prosperity, but this could change at any time (Evans, 2015). The frequency of reporting is done to keep an eye on the health of the nation, allowing the country to determine the causes and effects of unemployment, hopefully before another grave recession hits the nation (Evans, 2015).

  • Evans, ST 2015, ‘AN EVALUATION OF THE UNEMPLOYMENT RATES OF THE UNITED STATES’, Journal of Economics & Economic Education Research, 16, 2, pp. 157-172, Business Source Complete, EBSCOhost, viewed 29 February 2016.
  • Kelly, N, & Witko, C 2014, ‘Government Ideology and Unemployment in the U.S. States’, State Politics & Policy Quarterly, 14, 4, pp. 389-413, International Security & Counter Terrorism Reference Center, EBSCOhost, viewed 29 February 2016.
  • Srinivasan, N., & Mitra, P. (2014). The European unemployment problem: its cause and cure. Empirical Economics, 47(1), 57-73. doi:10.1007/s00181-013-0746-x
  • Tong, C, Tong, L, & Tong, J 2012, ‘High Unemployment in the United States: Causes and Solutions’, Competition Forum, 10, 2, pp. 74-79, SPORTDiscus with Full Text, EBSCOhost, viewed 29 February 2016.