The New York Times
This article points out several interesting facts regarding the unemployment rates in the United States over the past thirteen years. This article is dealing with the idea of the factors contributing to the declining unemployment rates in the United States, which Bob Funk, Express Employment Professionals company’s chief executive refers to as “the great shift” (para. 2). Christopher A. Pissarides describes unemployment in his book “Unemployment Equilibrium Theory” as an economic indicator that refers to the number or proportion of the people in an economy who are willing and able to work at the prevailing market rates, but are unable to get a job (p. 46).
David Leonhardt provides graphs as well as unemployment statistics in the United States for the past thirteen years. He proposes that baby-boomer retirement, slow growth in educational attainment in recent decades, the 2000-1 dot-com bust, the mediocre expansion that followed, the financial crisis that began in 2007 and the disappointing recovery of the last few years as well as the increasing number of workers on disability could be some of the causes of this great shift (para. 4). However, he quotes a study by the Federal Reserve Bank of San Francisco that proposes that the latter cause could be more of an effect of decreasing unemployment than it could be a cause. This has led to a leftward shift in the United States’ unemployment rates.
Source: Bureau of Labor Statistics
According to Leonhardt, the possible causes of the slumping United States’ unemployment rates could be due to the fact that economic development and growth as well as technological advancements, which have ensured that the number of people seeking employment get employment opportunities. Retirement rates in the United States have also greatly declined, and the older population still comprises the employed population. This phenomenon in New Jersey only occurs when the Equilibrium Unemployment Theory holds. The equilibrium theory of unemployment assumes that firms and workers maximize their payoffs under rational expectations, and that wages are determined to exploit the private gains from trade (Pissarides, p. 131).
According to this assumption, firms break up jobs to form new ones thereby leading to the increased employment rates despite the lost jobs. The time taken in schools also keeps students outside the population seeking employment. From the above table that Leonhardt uses in his article, it indicates that the number of people seeking lacking work or seeking work, but unable to secure opportunities in the United States in 2007 were very high and has continue to reduce over the years. Despite the increase in the number of people seeking employment in the United States, the United States’ industries have the capacities of absorbing a higher percentage of the unemployed population, thereby leading to a continuously declining unemployment rate
Following the recent trends in the employment industry in the United States from the aforementioned statistics, it is evident that the unemployment rates in the United States in the next decade could reduce to minimal rates. If the government is prepared for crises such as those witnessed in 2007, the unemployment rates will continue to reduce. Additionally, the economic expansions in the United States industries in the past decade indicate possible future economic expansion, which might absorb more people completing colleges and seeking employment.
Pissarides, Christopher. Equilibrium Unemployment Theory. Cambridge, Massachusetts: MIT Press, 2000. Print
Leonhardt, David. ‘The Great Shift’: Americans Not Working.” The New York Times. Web August 27, 2013