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Beyond the apparent direct economic impact, there are studies that suggest higher
unemployment rates are generally correlated with higher mortality rate, increasing heart
disease, higher percentage of depression and higher suicide levels in the population.
General approaches to reducing unemployment:
There are of course numerous variations within these two general approaches. There are
also less common ways of dealing with high unemployment. In one method, for instance,
the government would shift the burden of taxes to more capital intensive firms (as opposed
to labor intensive firms).
unemployment rates are generally correlated with higher mortality rate, increasing heart
disease, higher percentage of depression and higher suicide levels in the population.
General approaches to reducing unemployment:
- Demand side policies: Increase in the demand for labor will move the economy up
on the demand curve, improving both wages and employment. Monetary and fiscal
policy can be used to increase demand for goods and services in the system, which
in turn leads to demand for labor. Government spending (such as the approach taken
by the Obama administration on spending on infrastructure) can also lead to increase
in demand for goods and services, which theoretically should create jobs. Demand
side approaches are generally more associated with democrats and left governments
in general around the world.
- Supply side policies: Increase in the supply of goods and services can also reduce
unemployment. Ever since the so-called Reagan/Thatcher revolution in the 80's,
supply side policies are generally more associated with conservative governments.
Reducing or removing minimum wage, cutting taxes, and deregulation are among the
common supply-friendly approaches.
There are of course numerous variations within these two general approaches. There are
also less common ways of dealing with high unemployment. In one method, for instance,
the government would shift the burden of taxes to more capital intensive firms (as opposed
to labor intensive firms).
National unemployment rate (%)
2008-9 saw a sharp rise in unemployment rates. Currently at 10.2%, the unemployment
rate is projected to go up further in the coming months and it is not likely to show signs of
return well into 2010. Some projections see double digit unemployment rates coming our
way.
The United States has experienced several episodes of high unemployment in its modern
history:
rate is projected to go up further in the coming months and it is not likely to show signs of
return well into 2010. Some projections see double digit unemployment rates coming our
way.
The United States has experienced several episodes of high unemployment in its modern
history:
- 1933-1934: The years 1933-1934 saw the unemployment rate reaching close to
25%, which gradually went down to 15% by 1940. - 1957-1958: Unemployment rate reached 7.5% for a short period.
- 1975-1976: Unemployment rate maxed at 9%.
- 1981-1982: Unemployment rate peaked at 10.4%.
- 1986-1987: Unemployment peaked at 7.2%.
- 1992-1993: Unemployment peaked at about 7.9%.
- 2002-2003: Unemployment rate reached 6.3%.
- 2008-2009: Currently at 9.4%, expected to pass 10% in the coming months
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Unemployment rate (%) by state as of Sep 1, 2009
