UNEMPLOYMENT POLICY IN THE UNITED STATES

UNEMPLOYMENT POLICY IN THE UNITED STATES

Introduction

Unemployment refers to persons who are unemployed and are looking for job opportunities but cannot be able to find one. The term unemployment can also be used to denote the people who are temporarily laid off and are waiting to be invited back to their jobs. Unemployment in the U.S. has been around nine percent since the mainspring of 2009. Unemployment was projected to remain above 8.5% and 8.0% in the year 2012 and 2014 respectively. The new Economic Policy Institute conference paper Putting America Back to Work highlighted the key strategies through which the proposals to job creation are supposed to be judged and presented an incline the proposals that would aid in the job creation throughout the U.S. The list illustrates various types of the strategies that are required to offer a long-term solution to the issue of unemployment in the United States. The job formation is subdivided into three groups; the existing strategies that need to be renewed to mitigate the forfeiture of jobs. The essay is going to offer a detailed analysis of the policy supposed to be implemented to generate more job opportunities for the United States residents.

All across the U.S., American citizens were worried about the unemployment calamity, and they had great fear for themselves and their kids. They feared that the Washington DC had overlooked the issue of unemployment for a more extended period, most of the policymakers by then were focusing on the deficit of the budget instead of offering real solutions to culminate the issue of unemployment. There was a great need to create a new policy designed to create more job opportunities for U.S. residents. The rate of unemployment has remained at nine percent since the 2009 spring. Amongst Hispanic and black workers, almost out of four are underemployment or unemployed in one month. The unemployment rate has increased to a greater extent for the various educational group since 2007; this includes the workers and college graduates who hold advanced degrees. Polling indicates that more families have been significantly affected by the unemployment crisis.

Current Policy

The job plan is amongst the most significant policies that can be used to limit the issue of unemployment in the United States. Some of the policies postulated by congress are not effective since they can generate economic growth at a slower rate. Hence it is critical to evaluate whether the policy of the job plan can create job opportunities within the two years’ time. Some of the policies mentioned by the former president Barack Obama such the new trade agreements and the patent reform will have very low significant towards the mitigation of the unemployment in the U.S. The long-term initiatives are also not effective policy to curb the unemployment rate in the U.S., the policy stakeholders need to initiate a superior policy that will permanently terminate the issue of unemployment.

The effectiveness and efficiency of the policy

The job plan policy refers to the effective use of the funds to ensure that the total amount of money in government expenditure creates more job opportunities compared to the alternative plans. Jon plan policy is an excellent tool designed at creating more job opportunities; this can be denoted from the academic experts, Congressional Budget Office, as well as the private-sector forecasters. The less cost-effective job plans generate more significant opportunity costs; they tend to generate fewer job opportunities and instead increase the budget debit.

The funding of the policy

The most operational job formation policy is not supposed to be ‘paid for’ by other spending or higher taxes from the government budget. The effective job creation policy is supposed to add money in the economy and raise the entire demand for the services and goods, hence raising a necessity for an increase in the number of the workers to aid in the manufacturing of the services and the goods needed in the economy. An excellent job plan policy should be financed through a deficit of funded in the later years, hence helps in lowering the unemployment rate.

Alternative policies

Implement the Federally Subsidized Work Sharing Program

Spreading wages and work with the work-sharing program can be an effective tool to mitigate the unemployment rate in the United States. Work Sharing program can offer income support to the households, raise the employment level, and aid the business by assisting them to preserve most of the current workforce. Some of the European countries, especially Germany, have significantly benefited from work sharing. The unemployment level in Germany has greatly reduced since the commencement of the recession. The work Work-sharing program is an effective tool to subsidize the wages amongst the businesses that can substitute littler hours for the dismissals. Baker claimed that changing from unemployment indemnification to a more lavish system of the short-term duty would need a subsidy to proprietors of four thousand and five hundred dollars for every job saved.

Terminate The Currency Manipulation by The Countries That Engage in The Trade With US.

The realignment of the currency with various countries such as China could generate over two million jobs, raise the rate of exports, and reduce the imports by making United States commodities to be more competitive globally. For instance, the Yen in Japan amplified value concerning the dollar made the Nissan company to pronounce that it is changing its production of the Nissan vehicles for U.S. market from Japan to the U.S. More vivid production changes could be expected to occur amongst the various multinational corporations if the Chinese Yen could be permitted to raise its value in relation to U.S. dollar. This would, in turn, raise the rate of employment while lowering the unemployment rate in the United States.

Creation of Job Tax Credit

Proper designing of the job formation credit could inspire both sustainable employment and immediate hiring. Hence this could, in turn, enable the firms to employ several additional workers in their firms over the coming years. Calculation of the credit centered on the Social Security workforce, the credit could encourage companies to employ more employees and increase the wages and salaries for the workers (Zandi,2011). An additional rate of wages could attract more employees in various firms, hence aid in reducing the unemployment level that exists in the United States.

Encourage the Widespread of Debt Financing

Excessive payment of debts can lead to the retardation of economic growth. Most of the home owners in the United States could benefit from the refinancing of their mortgage at lesser interest rates. However, they are unable to undertake such actions due to the various hindrances that come across their way, for instance, upfront fees, underwater mortgages as well as declining credit scores (Elmendorf, 2014). Freddie Mac, FHA, and Fannie Mae would need loan services to offer applications to enhance easy refinancing to eligible borrowers. Refinancing of the borrowers would play a critical role in saving the funds of most of the households; this would, in turn, trigger the economic growth hence increase the rate of employment.

Conclusion

Deficit financing is the most efficient and effective policy needed to lower the rate of unemployment in the United States. Deficit financing plays a critical role in boosting consumption and investment hence aid in adding the total income revenue of the country. The higher National Income would trigger the government to increase its expenditure; the increase in expenditure by the government would, in turn, raise the rate of employment throughout the United States. Higher investment among domestic firms would enable them to hire more employees. The effectiveness of the job formation program is determined through establishing the additional fiscal activity generated by the program. An increase in economic doings will, in turn, lead to high employment.

References

Baker, Dean. 2015. “Work Sharing: The Quick Route Back to Full Employment.” Washington, D.C.: Center for Economic and Policy Research.

Bivens, Josh. 2013. “Abandoning What Works (and Most Other Things, Too): Expansionary Fiscal Policy Is Still the Best Tool for Boosting Jobs.” Briefing Paper #304. Washington, D.C.: Economic Policy Institute.

Chung, Hess, Jean-Philippe Laforte, David Reifschneider, and John C. Williams. 2013. “Have We Underestimated the Likelihood and Severity of Zero Lower Bound Events?” Working Paper 2011-01, Federal Reserve Bank of San Francisco.

Filardo, Mary, Jared Bernstein, and Ross Eisenbrey. 2011. “Creating Jobs Through FAST!, a Proposed New Infrastructure Program to Repair America’s Public Schools.” Washington, D.C.: The 21st Century School Fund and the Economic Policy Institute.

Gagnon, Joseph E., 2017. “Stop Sticking Our Heads in the Sand! A Plan for Action on Jobs.” Real-Time Economics Watch. Washington, D.C.: Peterson Institute for International Economics.

Hubbard, Glenn, and Chris Mayer. 2014. “How Underwater Mortgages Can Float the Economy.” The New York Times, September 18.

McNichol, Elizabeth, Phil Oliff, and Nicholas Johnson. 2016. “States Continue to Feel Recession’s Impact.” Washington, D.C.: Center on Budget and Policy Priorities.

Elmendorf, Douglas W., 2014. “Policies for Increasing Economic Growth and Employment in the Short Term.” Testimony by the director of the Congressional Budget Office prepared for the Joint Economic Committee, U.S. Congress, February 23.

Shierholz, Heidi. 2016. “Job Growth Still Sputtering in Lowest Gear.” Web commentary, August 5. Washington, D.C.: Economic Policy Institute.

Zandi, Mark. 2011. “At Last, the U.S. Begins a Serious Fiscal Debate.” Moody’s Analytics’ Dismal Scientist website, April 14.