Saturday, November 7, 2009
Unemployment rate is still fluctuating around
According to the US Labor Department, the October unemployment rate in the US increased to 10.2%, which was its highest rate since April 1983. The September’s figure was 9.8%, with 190, 000 people loosing their job in this month. It is claimed that the recession is over, but the job market recovery appears to be far from normal. The possible explanation for this situation is that a lag, generally of one year, is embedded for the recovery of job market after any crisis. This is certainly true because businesses are skeptical about the situation, and they exercise ‘wait and see’ policy before they make any hiring. Another possible explanation could be a fluctuation on the equilibrium wage rates that then creates the fluctuation on the gap between the equilibrium wage rate and the minimum wage rate. That may exogenously affect demand and supply conditions of labor market and thereby the unemployment situations. Our minimum wage has not altered, but the equilibrium wage may have been fluctuating around in tandem with the economic swings and the expectations the business people make about the economy. This reasoning appears prominent to explain the sway on the current unemployment rate.
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In order for the economy to stabalize investors have to feel comfortable in the market and start putting there money into the market. When investors are confident then the companies will then use this extra influx of cash to start hiring. Unemployment will not decrease until these companies start hiring. Someone has to go first but every company at this point is at a wait and see point which is hindering the growth and prodcution of our economy.
ReplyDeleteDetroit is known by the title the big 3.I am refering to GM,Ford Motor and Chrysler.In the past year these car producers had to lay of workers and close factories.Many people were on the unemployment line as a result. The Obama administration started a klunker for cash stimulus. This action pushed the demand for a new car to the right. It also increased the profits of all three companys. The demand for new cars have pushed the supply curve to the right.Unemployment has been reduced as a result of the government intervention.Factory workers have been called to come back to work.Maybe what this economy needs is more salt water.
ReplyDeleteJoy A. Hunt
Did anyone ever stop and think that higher than normal unemployment and an unstable housing market could be the new norm.If Darwin wrote on economic matters he would say that the market is going through an evolution of its own kind.More than three quarters of all workers had jobs in agriculture,today this work is done by three percent of workers. The rest of those people didnt die or disappear they simply evolved to different careers. So please dont cry for what once was, focus on what can be and by all means prepare yourself. We all know what happens to those who refuse to let the past go...
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ReplyDeleteIn order for the financial system to balance out and stabilize, financiers have to feel content in the market and start putting their money into the market. When financiers are convinced that the market and financial system is secure enough to build from there, then the companies will then use this ample incursion of money to start hiring. Unemployment will not diminish until these companies start hiring, but in order to so, the market has to completely stabilize in all aspects. Someone has to step forth and be able to take a step forward to engage a movement for the opportunity of employment to be valid. At this point, a “wait and see” situation is delaying the intensification and production of our economy. This is not the first time the stock market has gone into an economic depression or recession, we trusted this not to happen again, but it did. The most that can be done now, is to move forward and work efficiently to get the nation’s economy and job market back in line.
ReplyDeleteI agree with Eric in the fact that things change. That may explain the unemployment rate a little, but since the Big 3 are in trouble, it obviously affects things as well. I think that slowly, the unemployment rate will improve, but it just takes those investors to step up. Until then, the wait-and-see policy continues.
ReplyDeleteMichigan is going to hurt for a while because we are know for alot of our jobs being in the auto industry and because that market is hurting it is taking a toll on us as a whole. And because alot of the workers started in the factors straight out of high school they are lacking any other work experience so that makes it harder for them to get jobs.
ReplyDeleteDan Mullen
ReplyDeleteJason is right we need the investors to have more confidence in the market. The DOW has been floating around the 10,000 mark which is good. It just seems like we need to play some catch-up before companies feel comfortable hiring again
I believe that within one year, the job market is going to be even better than it was before. Sometimes, things have to get worse before they get better. People are going to put more confidence in the job market and I believe that more businesses as well as job positions will be created within the next year.
ReplyDeleteJerea Jackson
Michigan, and Detroit in general depends on the automotive industry so much that we are going to have a slow recovery from this problem. It make take a year or longer then that just to get back to where everything was a couple of years ago. With a lot of people losing jobs due the the auto industry that means all of the other businesses are hurting as well such as supplier which is loss of more jobs. It starts there and just goes down all the way to small stores and their business is going down and they have to layoff people. Once people get some faith in the market again the unemployment rate will go down a bit and everything will finally start to get better.
ReplyDeleteJoseph Plavetic
Our economy is recovering from a state of turmoil. In the midst of unemployment being at an all time high, the housing market deteriorating, and the stock market crashing, things are said to be looking up in the near future. Yes, Michigans' auto industry needed to be bailed out but they are on the verge of recovery. Incentives are in place to get the consumers to put money back into the economy such as the stimulus plan, tax creidts to support housing, along with new opportunities to further one's education. The economic status will get worst before it gets better, however in due time we will be able to prosper as once before with information technology and more policies support in place to get expansion going.
ReplyDeleteThe unempolyment rate is so high because all of our jobs have went over seas. The big company's don't care about anything but their bottom line. The recession will not be over for a long time, at least five more years before we start to see any real turn around. The company's need to invest their money in the American people where they first started making all their money. Also the American people need to spend their money at home buying american made products.
ReplyDeleteTara Smith
ReplyDeleteBusinesses are also staying away from hiring new employees because they are finding new ways to cut costs and get more work done efficiently with fewer workers. This is definitely not a good thing for the job market. Also, unemployment figures do not seem to recover until six months after the end of the recession. It would not surprise me if unemployment rates increased before they begin to decrease
This article also holds true for Detroit. With the unemployment rate in Detroit being around 15%. I see there being two different outcomes to fix this situation. Since Detroit main job suppliers are the three automotive companies, and them being close to bankruptcy. They need to recover and start being successful again by making products that the consumer wants to buy. Another solution would be similar to Pittsburgh when the steel companies there went out of business. They found new resources to make new jobs instead of relying on the steel mills.
ReplyDeleteThose businesses who have survived are operating so far in the red,that their happy to see another day. In addition, many are taking conservative action towards the news of any economic recovery press. Businesses are taking caution before hiring empolyees just to make sure recovery efforts from the recession are conclusive of whats been in the media. Business and the unemployed continue to be optimistic towards the job market. But make not mistake, wages, and job responsibilites and perks will never look the same. Paul Vaughn posted this
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