America's Economy and Recession

Introduction

The presence of high unemployment is a problem both economically and socially. As economic problem is a waste of valuable resources. As a social problem is a source of enormous suffering, and that unemployed workers have to contend with lower rent. During periods of high unemployment, economic hardships also affect their emotions and family life (Krugman, 11). One of the significant affects of recession is the unemployment. People face layoffs because the businesses are bound to reduce their operating costs. The low skilled labors and young hires are most vulnerable to unemployment. It takes almost 5 to 6 years for unemployment to obtain its original level. It creates issues with the business as the employment discrimination claims increase during recession.

Businesses face unproductively shock during the early stages of recession. It may also happen that gradually their productivity gets better if the weaker companies close. The recession brings pressure on cost reduction. There are many examples of mergers and acquisitions which took place as the result of lower productivity and financial crisis (Dooley, 47). The financially strong companies are in a better position to survive recession as compared to the others. As the unemployment increases, it brings lower standard of living. The spending power of people goes down because of minimum salaries. On the other side, the loss of jobs has a negative impact on the families' stability.

From time to time, countries experience high unemployment that persists for long periods, sometimes up to ten years. This is what happened in America during the Great Depression, which began in 1929. In a few years, unemployment rose affecting nearly a quarter of the workforce, while industrial production fell by half. It is not possible that the U.S. economy can recover the 'great depression' if unemployment stays above 9% (Dooley, 51). To recover from recession it is necessary that the unemployment rate should decrease. This paper will be discussing America's economy after the occurrence of great depression. All the relevant details related to the unemployment and recession will be discussed in this paper.

Discussion

Some economists believe that the unemployment rate of U.S. is still above 9%, this can b be done by manipulation of the present data. But recently a monthly report from the U.S. Department of Labor provided a pleasant surprise in November; the unemployment rate has dropped to 8.6%, while economists expected the stable at 9%.  This is the second consecutive decline in the unemployment rate reached its lowest level since March 2009.  However, new jobs have emerged in line with expectations: + 120,000 last month. The public sector continued to cut jobs (20,000), while the private sector has created 140,000, according to the department for which figures are much lower than the private firm ADP, which reported 206,000 creations Net in the private sector last month. 

The low rate at which unemployed workers are finding jobs predicts a slower decline in the unemployment rate. In other words, it will take a long time, longer than it normally did, for unemployment to move back to ...