How The Economy Has Impacted Since The 2008 Economic Crisis

A condition that has existed since the beginning of commercialization, unemployment has been in our history since its monumental recognition in 1929. The Great Depression is really when unemployment became a real issue and its highest peaks where between 1932 and early 1933 when the average rate of unemployment was 24.9%. Fast forward almost 80 years and unemployment is still a political issue whose rate has experienced a roller-coaster ride of highs and lows. Unemployment has many forms, but it is technological unemployment, that is a crisis which if declined will lead to an excellent and a benevolent rise to our nation’s economy.

Consequently, Keynes brought clarity to the subject of the Great Depression and unemployment, his argument suggested that unemployment may not be a temporary condition that the system could naturally recover. Keynes believed that unemployment could in fact reach equilibrium. In this article the Depression was seen as a condition of unemployment brought about a

Beginning with unemployment in the 2007-2009 recession, U.S. unemployment rates peaked at 10% as well as held 41 consecutive months at rates higher than eight percent (Lazear 1). The U.S. economy plummeted during this time; many attributed the shift to a large decrease in the number of employed workers. To be able to better understand the unemployment issue, we must first examine the form of unemployment faced by the U.S. economy. Many believe that the changes faced by the U.S. labor market

The Depression was a gruesome time where people had worked relentlessly to survive. Unemployment today is as severe as it was in the 1930s, the unemployment rate of today is nowhere near the unemployment of the Great Depression. A pair of economists with the Federal Reserve Bank of Dallas created report called “A Historical Look at the Labor Market During Recessions”. The report is a graph of the WWII Recession, showing that the unemployment rate of a few years ago has past the unemployment rate of the WWII Recession. In 2008 the authors wrote the Unemployment Rate, it’s a report that describes the recessions of the past to the years of 2006 to 2011. The most of the recessions are above or near the average, but the highest recession is the Great Depression.

Educating oneself about the economy is a rigorous task seeing as it has several different aspects to it. Unemployment and the related topics in the chapter sparked an interest within me. Fortunately, I was able to find an article that covered this topic in a state I’ve come to love- California. The article, “California adds 54,200 jobs in May; unemployment rate ticks up to 6.4%”, provides visual representation of the data stated and provides quotes and opinions from people among the Californian population. This produces additional support for the article. The fact that the situation is occurring in California, along with visual representations, gave reason for my decision in choosing this article.

During the great recession era that began in late-2007 and lasted until mid-2009, the labor market took a major loss. The reasons that caused the labor market to plummet during this time frame were due to unemployment, a decrease in income and lack of education. Despite the efforts from the government to help as much as possible, the labor market had taken the worst hit and was at its lowest since the last three decades. It is important for everyone to understand what a weak labor market can result in. In this paper, I will discuss these findings and what impact they had on the labor market to weaken it to such a low point.

The Great Recession began in late 2007 and quickly spread throughout the world. The downturn provided continuous high unemployment, a spreading foreclosure crisis, and minimal consumer spending.The crisis threatened the viability of financial institutions with deep exposure to defaults and foreclosures (Love & Mattern, 2011). Bank after bank were either closing down or merging just to stay afloat. This led to banks reducing their lending which made it both difficult and expensive to borrow money. This fall in consumption and investment led to businesses decreasing labor which further hurt GDP and unemployment saw an all-time high. This effect was not only felt in the United States. Countries that had exposure to the US also suffered from the

John Burges and William Mitchell state that unemployment trend has acted as a “social exclusion perpetrated against particular sections of the community, in general the young, old, poor and uneducated” (1998). The issue then lays in the trade off between the

However, life has changed, globalization and feminism have had a huge impact on the work environment all around the world. Technology has also made many jobs easier, yet very, very similar. Because of these changes, unemployment has become an issue all around the globe. The government views the unemployment situation as an individual problem.  From the government’s perspective, unemployment is due to the lack of training of the individual.  However, because

When governments look at policies to reduce unemployment, they tend to look at the short term and then the long term. In the short term, they need to ensure there is sufficient demand and economic growth in the economy to help control cyclical unemployment. This is done by adopting

The United States is currently experiencing a slow recovery from the recession of 2008-09. The current unemployment rate is 7.7%, which is the lowest level since December of 2008 (BLS, 2012). However, this rate is believed to higher than the rate that would occur if the economy was operating at peak efficiency, and it is also believed that there are structural issues still underpinning this performance. For example, the number of Americans who have exited the work force as the result of prolonged unemployment is believed to be higher than usual. In addition, the Congressional Budget Office (CBO, 2012) notes that long-term unemployment of greater than 26 weeks is at a much higher rate than normal, which will have adverse long-run effects on the economy, since workers with long-term unemployment often find their career paths derailed.

By the end of 2008, the European Union began experiencing rippling effects of the United States financial crisis. Several member countries, most notably on the southern end of the continent, faced high levels of debt and unemployment. Portugal, Iceland, Ireland, Greece, and Spain, derogatively referred to as “PIIGS,” required extensive economic support from the EU in order to repay government debts and bail-out private banks. Disbursal of aid in 2010 proved successful in promoting economic recovery in some countries; however, the vast majority observed only slight economic improvement which led to doubts regarding the effectiveness of the harsh austerity measures implemented. Ireland has most clearly benefited from the financial support of the European Union as the country’s unemployment rate has dropped below ten percent and is expected to witness 4.5% GDP growth in 2016. Portugal, on the other hand, shows little fiscal improvement as evident in an unemployment rate of 13% and an expected GDP growth of only 1.6% in 2016. Although both countries faced tough financial crises in 2010, Ireland has notably outperformed Portugal in resolving the situation. The weak economy in Portugal, as well as continued fiscal hardship in the remaining “PIGS” countries, threaten the preservation of the European Union as financial inequality between the members persists.

The EU crisis influenced the European labor market in many ways. Some of the effects of the economic crisis on the labor market are: the crisis mainly affected paid employment, a substantial increase in part-time employment, it affected the construction and industry, and it had a high impact in the private sector. Paid employees and people working as assistants in family enterprises are the ones who were hit by the crisis the most. Between 2008 and 2009 paid employment decreased by 1.8% (or 52,281 people) and about 4,391 men who were employed as assistants in family businesses lost their jobs. But on the other hand, there was a 1.2% increase of self-employed people without staff (about 3,697 women). But even though the women’s unemployment rate is higher, the young men were mostly affected by the crisis and resulted in very high unemployment. The crisis affected a decrease in the permanent and full-time paid employment, while there has been an increase in fixed-term and part-time employment. Between 2008 and 2009 permanent employment decreased by 2.5% (which mostly affected men) and full-time employment decreased by 2.8% which was mainly caused by the 4.1% decrease in

As non-European companies raised the standard of competition, the prices likewise fell and the market for many European products collapsed. This directly affected the employment rate throughout Europe in many of the industries, as many jobs were no longer needed. As this need declined, labor began to demand the retention of jobs, wages, and benefits, making labor more costly (Drouin,12). The unemployment rate in Europe went from 4-5% in the 1950-60s to 10-12% during the 1970-80s (Dr. Shearer - lecture). For example, after World War II the mining workforce in the UK fell from 718,000 to 43,000, with the majority of the jobs lost during 1975-85 (Judt, 459). The steel industry also suffered. As non-European countries entered the market, the European steel industry collapsed. For example, British steelworkers lost 166,000 jobs between 1974-1986 (Judt, 459). As unemployment increased throughout Western Europe, there was a movement towards the service sector.

Looking at the development of the Eurozone almost 15 years after the Euro introduction, the gross domestic product (GDP) of the Eurozone has only minimally (0.6%) increased in 2015 compared to 2007. Further, a pattern of divergence can be observed across the Eurozone. There are some countries which have experienced modest growth (i.e. Germany) and others that show a rather constant decline (i.e. Greece). The overall productivity has developed worse than expected, and is with an increase of only 0.6% from 2007 to 2015 fairly low. Another important indicator of the well-being of a country is the standard of living, measured by GDP per capita. This figure has been decreasing by almost 2% in the last 7 years. In terms of economic security, population still suffers under the crisis, shown in the increasing rates of unemployment and the decrease in government spending especially for social expenditures (i.e. Greece: 22% by 2015). A high standard of living also implicates a certain “connectedness” with family members, through the high youth unemployment rates in Spain, Italy etc. many young people leave their families in order to seek better opportunities in other countries (Stiglitz, 2016). Unemployment was on average 11% across the Eurozone and youth unemployment is levelled at twice that size, which will have enduring/long-lasting effects on future income and pension scheme. … “The euro has deepened the divide (…) weaker countries are becoming weaker and stronger are becoming