cause of unemployment essay

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7 Causes of Unemployment

What's Behind Each Type of Unemployment?

Erika Rasure is globally-recognized as a leading consumer economics subject matter expert, researcher, and educator. She is a financial therapist and transformational coach, with a special interest in helping women learn how to invest.

• Frictional Unemployment
• Structural Unemployment

What Causes Cyclical Unemployment?

• Demand-Deficit Unemployment
• Joblessness and Unemployment

Frequently Asked Questions (FAQs)

There are seven causes of unemployment. Four causes create frictional unemployment. This type of unemployment is when employees leave their jobs to find a better one. Two causes create structural unemployment. That is when workers' skills or income requirements no longer match the jobs available. The seventh cause leads to cyclical unemployment.

Frictional and structural unemployment occurs even in a healthy economy. The  natural rate of unemployment  is between 4% and 5%, according to the Federal Reserve. The Bureau of Labor Statistics (BLS) defines unemployed people as those who are jobless and have actively looked for work in the past four weeks as well as those who have been temporarily laid off from a job. If they don't keep looking, the Bureau of Labor Statistics doesn't count them in the labor force.

The Balance

4 Causes of Frictional Unemployment

One cause of unemployment is voluntarily leaving the workforce. Some of the unemployed have saved enough money so they can quit unfulfilling jobs. They have the luxury of searching until they find just the right opportunity. The second cause is when workers relocate. They are unemployed until they find a position in the new town.

The third cause is when new workers enter the workforce. This includes students who graduate from high school, college, or any higher degree program. They look for a job that fits their new skills and qualifications. That is a primary cause of youth unemployment.

The fourth cause is when job seekers re-enter the workforce. These are people who went through a period in their lives when they stopped looking for work. They could have stopped working to raise children, get married, or care for elderly relatives. These four causes are an unavoidable part of the job search process. The good news is that frictional unemployment is usually voluntary and short-term.

2 Causes of Structural Unemployment

Structural unemployment is neither voluntary nor short-term. These next two causes lead to long-term unemployment. The fifth cause is advances in technology. This is when computers or robots replace workers. Most of these workers need more training before they can find a new job in their field.

The sixth cause is job outsourcing. That is when a company moves its manufacturing or call centers to another country. Labor costs are cheaper in countries with a lower cost of living. This situation occurred in many states after  NAFTA  was signed in 1994. Many manufacturing jobs moved to Mexico. It also occurred once workers in China and India gained the skills needed by American companies.

The seventh cause of unemployment is when there are fewer jobs than applicants . The technical term is demand-deficient unemployment. When it happens during the recession phase of the business cycle, it's called cyclical unemployment.  

Low consumer demand creates cyclical unemployment. Company profits fall when demand falls. If companies don't expect sales to pick up anytime soon, they generally lay off workers. The higher unemployment causes consumer demand to drop even more, which is why it’s cyclical. It results in large-scale unemployment. Examples include the financial crisis of 2008 and the Great Depression of 1929.

Raising the Minimum Wage and Demand-Deficit Unemployment

Demand-deficit unemployment sometimes occurs when wages are too high. That's one of the arguments against higher minimum wages. Critics argue that when businesses are forced to pay a higher salary per person, they must let other workers go.

In some price-sensitive industries, that's true. But most companies can pass the cost onto their customers. 

Not All Causes of Joblessness Create Unemployment

If someone gives up looking for work, the BLS does not count them in the unemployment rate. If someone retires, goes back to school, or leaves the workforce to take care of children or other family members, that is not unemployment because they no longer look for work. Even if they would prefer a job, the BLS doesn't count them as unemployed unless they looked in the past month.

People who have searched in the past year, but not the past month, are called marginally unemployed. The BLS considers this the U-5 and U-6 alternative measures of labor underutilization, known more broadly as the “ real unemployment rate .” Some people argue that the government undercounts unemployment by reporting the official rate, rather than the “real” rate.

Key Takeaways

• For the BLS, unemployment is the state in which someone has no job and has been looking for work for the past month. Those who have stopped job searching are not counted as part of the unemployed labor force.
• Unemployment may be classified as either a frictional, structural, cyclical, or demand-deficit type.
• The natural rate of unemployment is between 4% and 5%.
• Unemployment is a key economic indicator. High employment rates can be symptomatic of a distressed economy. Conversely, very low unemployment rates can signal an overheated one.

Who is counted as unemployed?

The BLS defines unemployed workers as those who are out of a job and currently available to work, and who have actively looked for work in the past four weeks. It also includes workers who are temporarily laid off but expecting to return to the workforce, whether they have been actively looking for a job or not.

Who qualifies for unemployment benefits?

To qualify for unemployment benefits, a person must be unemployed "through no fault of their own," have worked during a specific period, have met minimum state wage requirements, and be actively seeking work. These are the minimum federal requirements, but some states have additional requirements.

Congressional Research Service. " Introduction to U.S. Economy: Unemployment ," Pages 1-2.

Federal Reserve Bank of St. Louis. " Noncyclical Rate of Unemployment (NROU) ."

Bureau of Labor Statistics. " Labor Force Characteristics: Unemployment ."

Bureau of Labor Statistics. " Employment and Unemployment Among Youth Summary ."

Council on Foreign Relations. " NAFTA and the USMCA: Weighing the Impact of North American Trade ." 

United States International Trade Commission. " The Size & Composition of U.S. Manufacturing Offshoring in China ," Pages 1-2.

Bureau of Labor Statistics. " Mass Layoff Data Indicate Outsourcing and Offshoring Work ," Page 5.

National Bureau of Economic Research. " Structural/Frictional and Demand-Deficient Unemployment in Local Labor Markets ," Pages 1-2.

Congressional Research Service. " The Increase in Unemployment Since 2007: Is It Cyclical or Structural? " Page 2.

Congressional Budget Office. " How Increasing the Federal Minimum Wage Could Affect Employment and Family Income ."

Bureau of Labor Statistics. " Table A-15. Alternative Measures of Labor Underutilization ."

Library of Congress. " H.R.1876 - Real Unemployment Calculation Act ."

Gallup. " The Big Lie: 5.6% Unemployment ."

Bureau of Labor Statistics. " How the Government Measures Unemployment ."

Benefits.gov. " Unemployment Insurance ."

• 7 Causes of Unemployment 2 of 16

Unemployment Essay Sample

Unemployment is the state of being jobless and seeking employment, or not having a job. It’s one of the most terrifying things that can happen to an individual. The number of unemployed people in the US is increasing and it’s time we took a closer look at what this means for our society. This essay will explore its causes and inferences.

Here is a sample essay on unemployment given by the experts to students. It could be used as a standard essay to write such other essays for the assignments.

Essay Example on Unemployment

• Thesis Statement of Unemployment Essay
• Introduction of Unemployment Essay
• Cause of Unemployment in the World
• Inferences of the Unemployment in a society of Nation
• How to deter the Problem of Unemployment at Global Scale

Thesis Statement of Unemployment Essay Unemployment gives rise to anarchy, terrorism, and a threat to the internal security of a nation. I ntroduction of Unemployment Essay Today the most fundamental problem that is engulfing society is the issue of unemployment. People are not able to manage two squares of meals per day. This issue cannot be ignored by us at any point as it is eating the structure of our society like a termite thus making it hollow from the inside. There are many problems that arise due to unemployment like terrorism in society which is dangerous for humankind. The issue could be addressed at the most be getting solutions on the problem of unemployment in society, which acts as the causing effect of terrorism and other problems. Main Body of Unemployment Essay Cause of Unemployment in the World The major cause of unemployment in society is the improper management of resources and giving unequal status to the people of society. Here are some major causes of unemployment given below. Unequal Distribution of resources The economic resources are unequally distributed among the people in a society of the nation at large. As a consequence of which some sections get mighty wealth as compared to others. Excessive deflation Another biggest cause that lies behind the cause of unemployment in society is the excessive deflation in the country. When people have to sell their products below the manufacturing cost they find no profit in the business. There comes a time when this business is closed by the businessmen due to lack of profit in the work. Many people lose their employment due to this reason. Mismanagement of the Banking and Financial Institution Loan and other Financial Help are given to the businessmen easily as compared to the common masses. As a result of which there is not a development of the poor people as they cannot invest money for any innovative purpose by owing a loan from the bank. This corruption is the cause of unemployment in a poor section of society. Get Non-Plagiarized Custom Essay on Unemployment in USA Order Now Inferences of the Unemployment in a society of Nation Here are the main results of unemployment in a given nation of a particular society. Students become the enemy of other’s lives in these states. Terrorism –  In the scarcity of jobs youth people join many terrorist groups for the sake of earning livelihood for their families. Thus the rise of terrorism could be backed by the unemployment problem. Human Trafficking –  The biggest issue of human trafficking is unemployment; many women and men are being transferred across the national and international boundaries for this reason. People do not have enough money to rare their families and thus get involved in such anti-social practices to earn money. Social Riots –  Social riots are also the conclusion of unemployment as communities get irritated when other people from a different community get employment. This emotion of wrath and jealously is very strong which even kills the lives of many innocent. Communal Issues –  Many times it also gives rise to the communal issue when social riots take their final destination. It could be the most serious result of unemployment in any society. How to deter the Problem of Unemployment at Global Scale The issue of unemployment is not a small problem that could be easily uprooted by society. Its roots had gone very deep into society and it is very difficult to eradicate them. It could be done by making certain efforts by every person in the world. Here are some points that could be considered by the people to eradicate the unemployment problem from society or the world at large. Equal Distribution of Economic Resources The economic resources must be equally distributed among the people so that this issue of unemployment and accumulation of wealth could be solved. Though it is a difficult thing to do but still if we make some plans for it, success could be achieved in it. Reduction in Corruption Corruption is a major issue that causes a huge part of the unemployment problems. This could be reduced by the efficient bureaucrats of the nation. Skill Oriented study The education should be skilled oriented so that people can work easily to save their livelihood. The education system should also encourage students to create new jobs and employment generation. Buy Customized Essay on Unemployment At Cheapest Price Order Now Conclusion The above discussions and arguments about unemployment draw a conclusion that though the issue is very big it could be solved by making efforts. Certain plans and strategies are needed to achieve the dream of eradicating the unemployment issue from society. Intelligentsia of the society needs to pay big attention towards this field of unemployment. Thus we can save our world from ill practices like terrorism and riots.

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Essay on Unemployment: 100 to 300 Words

• Updated on  
• Mar 30, 2024

Writing an essay on unemployment provides an opportunity to explore a critical issue affecting societies worldwide. Unemployment, a multifaceted problem, has far-reaching consequences that touch upon various aspects of individuals, families, and nations. In this essay, we will delve into the complexities of unemployment, examine its causes and consequences, discuss government initiatives, and shed light on potential solutions.

Table of Contents

• 1 What is Unemployment?
• 2 Essay on Unemployment in 100 words
• 3 Essay on Unemployment in 200 words
• 4 Essay on Unemployment in 300 words
• 5 Tips to Ace in Writing An Essay

Must Read: The Beginner’s Guide to Writing an Essay

What is Unemployment?

Lack of jobs leads to unemployment. It is a very serious economic and social concern that is happening all around the globe leading to many social ills. This issue is a major one and hence many governments are trying to address it. When people of a nation are employed, that leads to the economic and social well-being of that nation. To address it, the education system needs to be modeled differently so as to increase the employability of people. In democracies, political parties use unemployment as a core issue in their election manifestos.

Essay on Unemployment in 100 words

Unemployment refers to the condition when individuals, capable and willing to work, are unable to secure gainful employment. It is a pervasive issue across the globe, with varying degrees of impact on societies. Unemployment results in financial instability, and emotional distress, and hampers individual growth. Governments and organizations must collaborate to create opportunities for employment through skill development and policy implementation.

Essay on Unemployment in 200 words

Unemployment, a pressing concern globally, stems from multiple factors that hinder the workforce’s engagement in productive activities. It affects both developed and developing nations, contributing to economic imbalances and social disparities. The consequences of unemployment include reduced income levels, increased poverty rates, and strained government resources. Moreover, the psychological toll it takes on individuals and families can be severe, leading to stress, depression, and strained relationships.

Essay on Unemployment in 300 words

The intricate web of unemployment is spun from a mix of causes, ranging from economic fluctuations to structural shifts in industries. Cyclical unemployment, driven by economic downturns, and structural unemployment, resulting from a mismatch between skills and job openings, are widespread forms. Additionally, technological advancements lead to technological unemployment as machines replace human labour.

Unemployment has cascading effects on societies. Diminished purchasing power affects market demand, thereby impacting economic growth. As unemployment rates rise, so does the burden on social welfare programs and the healthcare system. The phenomenon also fuels social unrest and political instability, making it a challenge governments cannot ignore.

Governments worldwide have initiated strategies to tackle unemployment. Skill development programs, vocational training, and entrepreneurship initiatives are designed to equip individuals with market-relevant skills. Furthermore, promoting labour-intensive industries and investing in sectors with growth potential can generate employment opportunities.

In conclusion, unemployment is a complex issue that necessitates a multi-pronged approach. Governments, industries, and individuals must collaborate to alleviate its impact. Effective policy implementation, education reforms, and the cultivation of entrepreneurial spirit can pave the way towards reducing unemployment rates and fostering a more stable and prosperous society.

Tips to Ace in Writing An Essay

Before we dive into the specifics of unemployment, let’s briefly discuss some tips to enhance your essay-writing skills:

• Understand the Prompt: Ensure a clear understanding of the essay prompt to address all its components effectively.
• Research Thoroughly: Gather relevant information from credible sources to build a comprehensive and informed essay.
• Organize Your Thoughts: Create an outline to structure your essay logically, allowing your ideas to flow coherently.
• Introduction and Conclusion: Craft a compelling introduction to engage your readers, and a succinct conclusion to summarize your key points.
• Use Clear Language: Express your ideas using clear and concise language, avoiding jargon or overly complex vocabulary.
• Provide Examples: Illustrate your points with real-life examples to enhance understanding and credibility.
• Edit and Proofread: Revise your essay for grammar, punctuation, and coherence to ensure a polished final draft.

Also Read: Unemployment v/s Underemployment – What’s Worse?

Related Reads:-     

Unemployment refers to the state in which individuals who are willing and able to work are without gainful employment opportunities. It is a condition where individuals seek jobs but are unable to secure them, leading to financial instability and societal challenges.

Unemployment, as discussed in the essay, is a multifaceted issue encompassing the lack of employment opportunities for willing and capable individuals. It explores various forms of unemployment, its causes, far-reaching consequences on economies and societies, and the role of governments in implementing solutions to mitigate its impact.

Unemployment is the term used to describe the situation where individuals of working age are actively seeking employment but are unable to find suitable job opportunities. It signifies a gap between the available workforce and available jobs, often leading to economic and social challenges within a society.

Unemployment emerges as a prominent thread, influencing economic, social, and psychological realms. As we’ve explored in this essay, comprehending the causes and consequences of unemployment is pivotal in devising solutions. Governments, institutions, and individuals must strive collectively to unravel this issue’s complexities and weave a fabric of employment opportunities, stability, and progress. We hope that this essay blog on Unemployment helps. For more amazing daily reads related to essay writing , stay tuned with Leverage Edu .

Manasvi Kotwal

Manasvi's flair in writing abilities is derived from her past experience of working with bootstrap start-ups, Advertisement and PR agencies as well as freelancing. She's currently working as a Content Marketing Associate at Leverage Edu to be a part of its thriving ecosystem.

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Home — Essay Samples — Economics — Employment — Reasons For Unemployment

Reasons for Unemployment

• Categories: Employment Unemployment

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Words: 467 |

Published: Mar 14, 2024

Words: 467 | Page: 1 | 3 min read

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Cause & Effect Essay: Unemployment

Unemployment is the one constant throughout history. Despite changing technology, the underlying principles of why unemployment occurs remain the same. It’s also what continues to this day. The three main causes of unemployment are economic conditions, new technology, and increasing populations.

Economic conditions are the main factor in unemployment. The 2008 economic crash caused unemployment to rise dramatically, and the same has been true of every economic slump throughout history. An economic crash causes businesses to fold and posts to disappear. If there isn’t enough money coming into a company, it can no longer afford to pay its employees.

Once a company fails to pay its employees it has no choice but to let them go. Sometimes, it reduces its size in waves of redundancies or it simply shuts down.

New technology also has an impact. As conventional tasks become more automated and more convenient, some employees find their posts obsolete. With no reason to continue paying them, they lose their jobs as the job simply disappears. It’s why the Swing Riots occurred in Britain during the 1830s. Workers fought against the introduction of threshing machines which would make many traditional jobs disappear.

In the 21st century, the main threats are robotics and increasingly intelligent computers. Professional filing systems which require teams of people to maintain are now on a single computer server controlled by a single person. This is the form of unemployment which happens during prosperous times when companies can afford to invest in new technologies.

Increasing populations often lead to unemployment at a slower rate. The numbers of unemployed have increased over the past few decades as the population has accelerated. To an extent, the increasing demand for goods and trade balances out the population increase, but businesses often fail to deal with the short-term consequences.

Initially, many young humans aren’t yet old enough to need the economy to enlarge itself. It will take at least 20 years before the economy needs to respond to growing demand. Children generally don’t figure in the size of the economy or the need for jobs, on a large scale. It’s only when they become adults things start to change.

And it doesn’t always keep pace with the number of adults in society. There are simply not enough employment roles for the number of applicants.

New technology and an increasing population generally go hand-in-hand. If technology remained the same the increasing population wouldn’t matter as the jobs would form naturally. The rescinding in the number of roles from multiple sides overwhelms the employment market and we finish with a shortfall in jobs.

Unemployment seems like a complicated issue as people attempt to take complicated formulae into account. Really, it’s caused by the same three things it has always been caused by. Poor economic conditions, new technological advances, and an increasing population have and always will continue to perpetuate the problem of unemployment.

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Unemployment Essay

500+ words essay on unemployment.

Unemployment is a serious problem among young people. There are thousands of people who do not have any work to do and cannot find work for themselves. Unemployment refers to the situation where a person wants to work but cannot find employment in the labour market. One of the major reasons that contribute to unemployment is the large population of India and the limited availability of resources. In this essay on unemployment, we will discuss all these issues responsible for unemployment in India and how we can overcome this problem. Students must go through this unemployment essay to get ideas on how to write an effective essay on the topic related to unemployment. Also, they can practice more CBSE essays on different topics to boost their writing skills.

Unemployment is measured by the unemployment rate, defined as the number of people actively looking for a job as a percentage of the labour force. The unemployment rate for the year 2013-14 in rural India was 4.7%, whereas it was 5.5% for urban India. In the short term, unemployment significantly reduces a person’s income and, in the long term, it reduces their ability to save for retirement and other goals. Unemployment is a loss of valuable productive resources to the economy. The impact of job loss in rural and regional areas flows through the local community, damaging businesses.

Reason for Unemployment

An unemployed person is one who is an active member of the labour force and is seeking work but is unable to find any work for himself. There are multiple reasons behind the unemployment of a person. One of them is the slow economic growth, due to which jobs in adequate numbers are not created. Excessive dependence on agriculture and slow growth of non-farm activities also limit employment generation. Unemployment in urban areas is mainly the result of substantial rural migration to urban areas. This has also resulted in a labour workforce in cities. The lack of technology and proper machinery has also contributed to unemployment.

The present educational system is based on theoretical knowledge instead of practical work. Thus, it lacks the development of aptitude and technical qualifications required for various types of work among job seekers. This has created a mismatch between the need and availability of relevant skills and training. This results in unemployment, especially among the youth and educated people with high degrees and qualifications. Apart from it, the lack of investment and infrastructure has led to inadequate employment opportunities in different sectors.

Steps to Eliminate Unemployment

Various strategies and proposals have been implemented to generate employment. Many Employment programmes and policies have been introduced and undertaken to boost self-employment and help unemployed people engage in public works. The Government of India has taken several policy measures to fight the problem of unemployment. Some of the measures are the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), National Skill Development Mission, Swarna Jayanti Shahari Rozgar Yojana (SJSRY), Regional Rural Banks (RRBs).

Despite the measures taken by the government, India remains a country experiencing severe unemployment problems. It can be resolved by imparting education in such a way that youth get the necessary skills so as to get employment easily. Setting up various vocational training and vocational courses for undergraduate and postgraduate students will help in finding employment for youth. The government needs to emphasise these courses at the primary level and make them a compulsory part of the curriculum to make students proficient in their early stages of life. Career counselling should be provided within schools and colleges so that students can choose a better career option based on their interests and ability. Government should create more job opportunities for the youth and graduates.

India is a fast-growing economy. There is an enormous scope for improvement in the unemployment sector. The various measures and steps taken by the government to increase the employment rate have succeeded to a great extent. The widespread skill development programmes have gained popularity across the nation. With better enforcement of the strategies, the employment level can be significantly improved. Although, we have to go a long way before we can say that all the people in India will get employment.

We hope this essay on unemployment must have helped students in boosting their essay-writing skills. Keep learning and visiting the BYJU’S website for more study material.

Frequently Asked Questions on Unemployment Essay

Is unemployment still an existing problem in india.

Yes, unemployment is still a serious issue in our country. Steps need to be taken by the government and also by the youngsters in India to improve this situation.

Is it necessary for schoolchildren to be informed about unemployment?

Students at this young age should definitely be informed about this topic as it will motivate them to study and aim for higher scores in exams.

What points are to be added to an essay topic on Unemployment?

Add details about different age groups of people suffering from this state of employment. You can focus on the fact that poverty is an indirect reason for unemployment and vice-versa. Then, suggest steps that can be taken to bring about an improvement in education and increase the percentage of literacy.

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John Maynard Keynes

Where was John Maynard Keynes educated?

What were john maynard keynes’s jobs, what did john maynard keynes write, why is john maynard keynes important.

John Maynard Keynes (born June 5, 1883, Cambridge , Cambridgeshire , England—died April 21, 1946, Firle, Sussex) was an English economist, journalist, and financier best known for his economic theories ( Keynesian economics ) on the causes of prolonged unemployment . His most important work , The General Theory of Employment, Interest and Money (1935–36), advocated a remedy for economic recession based on a government-sponsored policy of full employment.

Keynes was born into a moderately prosperous family. His father, John Neville Keynes , was an economist and later an academic administrator at King’s College , Cambridge. His mother was one of the first female graduates of the same university, which he entered in 1902.

At Cambridge he was influenced by economist Alfred Marshall , who prompted Keynes to shift his academic interests from mathematics and the classics to politics and economics . Cambridge also introduced Keynes to an important group of writers and artists. The early history of the Bloomsbury group —an exclusive circle of the cultural elect, which counted among its members Leonard and Virginia Woolf , the painter Duncan Grant , and the art critic Clive Bell —centred upon Cambridge and the remarkable figure of Lytton Strachey . Strachey, who had entered Cambridge two years before Keynes, inducted the younger man into the exclusive private club known simply as “the Society.” Its members and associates (some of them homosexual, like Keynes himself) were the leading spirits of Bloomsbury . Throughout his life Keynes was to cherish the affection and respond to the influence of this group.

After earning a B.A. in 1905 and an M.A. in 1909, Keynes became a civil servant, taking a job with the India Office in Whitehall . His experience there formed the basis of his first major work, Indian Currency and Finance (1913), a definitive examination of pre-World War I Indian finance and currency. He then returned to Cambridge, where he taught economics until 1915. With the onset of World War I , Keynes returned to government employment, this time in the Treasury (an agency even more powerful than its American counterpart), where he studied relations with allies and recommended means of conserving Britain’s scant supply of foreign currencies.

His performance may have marked Keynes for a public career, but the Versailles Peace Conference changed his aspirations. Accompanying Prime Minister David Lloyd George to France as an economic adviser, Keynes was troubled by the political chicanery and burdensome policies that were to be imposed upon the defeated Germany . He resigned his post, depressed, to quote from a letter to his father, by the impending “devastation of Europe.”

He took an activist’s stance, however, by transforming personal distress into public protest. In two summer months he composed the indictment of the Versailles settlement that reached the bookstores by Christmas 1919 as The Economic Consequences of the Peace . The permanent importance of this polemical essay lies in its economic analysis of the stringent reparations placed upon Germany and the corresponding lack of probability that the debts would ever be paid. The popular success of the book, however, came from the blistering sketches of Woodrow Wilson , Georges Clemenceau , and Keynes’s old chief, Lloyd George. As a consequence, in some Whitehall circles Keynes was considered a man not quite to be trusted, an iconoclast willing to rock any boat into which he had imprudently been invited.

Keynes’s reputation at Cambridge was quite different. He was esteemed as the most brilliant student of Marshall and fellow economist A.C. Pigou , authors of large definitive works explaining how competitive markets functioned, how businesses operated, and how individuals spent their incomes. After publication of The Economic Consequences of the Peace , Keynes resigned his lecture post but stayed on as a fellow of King’s College, dividing his time between Cambridge and London.

Although the tone of Keynes’s major writings in the 1920s was occasionally skeptical, he did not directly challenge the conventional wisdom of the period, which favoured laissez-faire —only slightly tempered by public policy—as the best of all possible social arrangements. Two of Keynes’s opinions did foreshadow the theoretical revolution he triggered in the 1930s. In 1925 he opposed Britain’s return to the gold standard at the prewar dollar-to-pound ratio of $4.86, and, long before the Great Depression , Keynes expressed concern over the persistent unemployment of British coal miners, shipyard workers, and textile labourers. Reconciled by this time with Lloyd George (who was never to return to office), he supported the Liberal Party’s program of public works to take the unemployed off welfare by placing them in useful jobs. But “respectable” economists still expected the automatic adjustments of the free market to solve these problems, and the Treasury was convinced that public works were useless, because any increase in the government deficit would likely cause an equal decline in private investment. Although Keynes could not offer a theoretical refutation of his colleagues’ opinions, he agitated for public works nevertheless.

It was only later, in The General Theory of Employment, Interest and Money , that Keynes provided an economic basis for government jobs programs as a solution to high unemployment . The General Theory , as it has come to be called, is one of the most influential economics books in history, yet its lack of clarity still causes economists to debate “what Keynes was really saying.” He appeared to suggest that a reduction in wage rates would not reduce unemployment; instead, the key to reducing unemployment was to increase government spending and to run a budget deficit. Governments, many of them looking for excuses to increase spending, wholeheartedly accepted Keynes’s views, as did most of his professional colleagues.

Keynes’s long-run influence has not been as significant as his short-run impact. The Keynesian model was a core part of economics textbooks from the late 1940s until the late 1980s. But as economists have become more concerned about economic growth , and more informed about inflation and unemployment, the Keynesian model has lost prominence.

The General Theory was Keynes’s last major written work. In 1937 he suffered a severe heart attack . Two years later, though not completely recovered, he returned to teaching at Cambridge, wrote three influential articles on war finance entitled How to Pay for the War (1940; later reprinted as Collected Writings , vol. 9, 1972), and served once more in the Treasury as an all-purpose adviser. He also played a prominent role at the Bretton Woods Conference in 1944. But the institutions that resulted from that conference, the International Monetary Fund and the World Bank , were more representative of the theories of the United States Treasury than of Keynes’s thinking.

His last major public service was his negotiation in the autumn and early winter of 1945 of a multibillion-dollar loan granted by the United States to Britain. Keynes died the following year.

Primarily biographical works include Roy F. Harrod , The Life of John Maynard Keynes (1951, reissued 1982), written by one of Keynes’s students and colleagues; Robert Skidelsky , John Maynard Keynes (1983); Charles H. Hession , John Maynard Keynes (1984); and D.E. Moggridge , Maynard Keynes: An Economist’s Biography (1992). An exceptionally clear exposition of Keynes’s major work may be found in Dudley D. Dillard , The Economics of John Maynard Keynes: The Theory of a Monetary Economy (1948, reprinted 1983). J.C. Gilbert , Keynes’s Impact on Monetary Economics (1982), surveys the literature of the 1930s to ’60s. Hyman P. Minsky , John Maynard Keynes (1975), reevaluates interpretations of Keynesian economics. D.E. Moggridge , John Maynard Keynes (also published as Keynes, 1976), is an interpretive study of Keynes’s lifework by an editor of the Collected Writings. Don Patinkin , Keynes’ Monetary Thought: A Study of Its Development (1976), was the first full-length work to make use of the Collected Writings. Elizabeth S. Johnson and Harry G. Johnson , The Shadow of Keynes: Understanding Keynes, Cambridge, and Keynesian Economics (1978), is a collection of essays that examines Keynes’s relationship to his social and intellectual environment. Peter Clarke , The Keynesian Revolution in the Making, 1924–1936 , corrected ed. (1990), sets his work in the context of contemporary economic conditions and policies, while David Laidler , Fabricating the Keynesian Revolution: Studies of the Inter-War Literature on Money, the Cycle, and Unemployment (1999), examines Keynes’s work in the context of his own era. Peter Clarke , Keynes: The Twentieth Century’s Most Influential Economist (2009), chronicles Keynes’s personal life and its impact on the development of his economic theory. Robert Skidelsky , Keynes: The Return of the Master (2009); Paul Davidson , The Keynes Solution: The Path to Global Economic Prosperity (2009); and Mark Hayes , John Maynard Keynes: The Art of Choosing the Right Model (2020), argue for a fundamental overhaul of economics and economic policy.

Assessing the Success of Reaganomics: Economic Impact and Long-Term Effects

This essay about Reaganomics explores the economic policies implemented during Ronald Reagan’s presidency in the 1980s, focusing on tax cuts, deregulation, fiscal restraint, and tight monetary policy. It examines the positive and negative impacts of these policies on economic growth, inflation, income distribution, and the national debt, highlighting the ongoing debate over their long-term effects on economic inequality and government intervention.

How it works

Reaganomics stands as one of the most hotly debated economic policies in modern history, generating extensive analysis and controversy during Ronald Reagan’s presidency in the 1980s. Named after the 40th President of the United States, this comprehensive strategy aimed to stimulate economic growth, combat inflation, and reduce government interference in the market. The core of Reaganomics rested on four main pillars: tax cuts, deregulation, fiscal restraint, and tight monetary policy. These components were intended to boost private sector innovation and investment while restoring confidence in the economy.

At the heart of Reaganomics was the embrace of supply-side economics, which posited that reducing taxes, particularly for high-income earners, would encourage savings, investment, and entrepreneurial activities. By lowering the top marginal income tax rate from 70% to 28% during Reagan’s time in office, supporters argued that both individuals and businesses would have more capital to drive economic expansion. Deregulation also played a crucial role, aiming to free industries such as finance and telecommunications from bureaucratic constraints, thereby enhancing competition and efficiency.

Reaganomics’ fiscal policy focused on reducing government spending, particularly on social programs, and striving for a balanced federal budget. This was complemented by a stringent monetary policy under Federal Reserve Chairman Paul Volcker, which aimed to control inflation through interest rate hikes. These measures were intended to stabilize prices and restore economic confidence following the stagflation of the 1970s.

When evaluating the impact of Reaganomics, economists and historians have closely scrutinized various economic indicators and long-term trends. Proponents highlight its success in curbing inflation, a significant achievement under Volcker’s leadership, contributing to greater economic stability and business certainty. They also argue that Reaganomics spurred robust economic growth throughout the 1980s, with consistent GDP expansion and steadily declining unemployment rates from their peak at the beginning of the decade.

However, critics argue that the benefits of Reaganomics were unevenly distributed. They contend that tax cuts primarily benefited the wealthy, exacerbating income inequality, while reductions in social welfare spending strained safety nets for vulnerable populations. Moreover, despite efforts to curb deficits through fiscal discipline, federal budget deficits surged during Reagan’s presidency, resulting in a tripling of the national debt. Critics argue that this fiscal expansion was unsustainable and imposed heavier debt burdens on future generations.

Reaganomics also left a lasting impact on economic policy and discourse in the United States. Its emphasis on tax cuts, deregulation, and market-driven economics influenced subsequent administrations and shaped ongoing debates about the appropriate role of government in economic affairs. The 1980s marked a shift towards conservative economic principles that prioritized free-market dynamics and individual initiative over centralized economic planning and intervention.

Furthermore, the legacy of Reaganomics continues to resonate in discussions concerning economic inequality and social mobility. While proponents credit it with fostering economic dynamism and opportunity, critics point to persistent disparities in wealth and economic outcomes as evidence of its shortcomings in addressing structural inequalities.

In conclusion, assessing the impact of Reaganomics requires a nuanced examination of its effects on economic growth, inflation, income distribution, and fiscal health. While advocates highlight its role in promoting economic expansion and controlling inflation, critics argue that its benefits were unevenly distributed and contributed to widening disparities. The enduring legacy of Reaganomics lies in its influence on economic policy and the ongoing debate over the appropriate balance between market forces and government intervention in shaping economic outcomes.

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Causes of Rising Unemployment Essay

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Introduction

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Human beings have various needs that are essential for their survival on earth. These needs are categorized as basic (food, clothing, shelter, education and proper health care) hence one can not survive without them. Even though others are more urgent and important than others, it requires proper planning to ensure that they are all considered and catered for. In order to have these essential needs, a person has to have money to access or buy them. Money is earned through payments from employment. This essay aims at pin pointing the main reasons why there is an increasing rate of unemployment in many countries in the world.

Employment refers to any activity that is aimed at generating income to an individual in terms of profit or salary. Profits are realized when a person invests capital on any business activity while salary is obtained after offering services to an individual, company or organization (Powers 104). Unemployment is a situation that involves lack of participation in an activity that generates income for the individual. This has been fuelled by the following major reasons that are man made while others are natural;

Human population growth rate has sky rocketed in the last few years to supersede the world’s ability to create employment opportunities to the available population (Cottle 36). The world’s population is said to be increasing at a compounded rate of about eighty million people every year. This statistic means that after about eighteen years time there should be an addition of at least fifty million employment opportunities for these people when they are grown ups. In addition, this population is projected to be about ten billion by the year 2050. These statistics mean that there should be about four billion newly created employment opportunities by 2050. However, this is usually not the case as the rate of employment opportunities being created are very few compared to the demands of the population and this means that many people will be unemployed regardless of their qualifications.

Technology and innovations have also contributed to the high rates of unemployment when people are being forced to leave their work positions as machines take over. In the last four decades a single office would have an office secretary, personal assistant, office messenger and an office clerk (Stringham 121). However, with the increase in the use of computers in the office one person is able to do all these chores courtesy of the internet. People with the ability to use computers to perform various tasks are usually considered better candidates in interviews compared to people with limited ability. In some occasions, human beings have been completely replaced by machines like in the dairy sector where milking of dairy cow is now being widely done by milking machines. The use of robots in many industrial and warehousing processes has contributed greatly to the displacement of human labor in the production processes. Furthermore, the use of robot controllers and integrators that combine human and machine efforts is a recent development that will have great impact on employment opportunities in the world.

The most inevitable factor that has contributed to high unemployment rate in all parts of the world is the depletion of natural resources that offer employment opportunities to the community. Many countries that have natural resources like mineral ores and carbon fuels usually offer immense employment opportunities to the local and beneficiary population. However most of these resources are not renewable others like timber take too long to be replaced and regain their useful state. Sometimes human activities lead to the depletion of these natural resources (Brophy 92). Whenever these resources are depleted the people who were directly and indirectly depending on them for employment become jobless.

The high inflation rate has made it very difficult for many companies to sustain their production processes and at the same time keep their staff at work. Many businesses have closed down as the costs incurred are much higher than the profits realized. This means that the final result is nothing short of losses and wastage of resources (Brophy 135). On the other hand people have taken loans from banks in order to counter the effects of inflation but this proves futile as the high interest rates on loans deprive them the profits realized. Banks also have not been left out as they are forced to increase their lending rates to the clients in order to sustain their operations. This in turn discourages people from borrowing money from these financial institutions forcing them to close down and more workers are laid off leading to unemployment.

Furthermore, the education system being used in many countries is based on theoretical concepts. It has ignored the practical aspects of skills and knowledge and therefore converting these theories to real use in the job market becomes a tall order. Many students graduate with very remarkable grades, but use most of their time looking for suitable employment (Brophy 112). Some have been blinded by the fact that they are educated and have become too selective in their choice of work. They ignore simple and manual labor on grounds that they are educated and need ‘respectable’ work. This creates temporary unemployment as thousands of graduates become jobless while they wait for their star to shine.

Lastly, the world is currently being faced with numerous terrorists’ attacks that have threatened the existence of human life. For instance the terrorist bombings in the World Trade Center in America (September 11 th , 2001) threatened international investments in cosmopolitan countries and cities. This is because the costs incurred in the restoration of the businesses and injuries incurred are very expensive (Powers 84). It is estimated that America suffered a loss of about $ 95 billion in terms of losses to the city of New York in jobs, salaries, taxes, damage to infrastructure and costs of cleaning the city. In addition, the insurance industry suffered a loss of about $ 40 billion while the global market suffered an incalculable amount. Such terrorist activities deter investments that in turn limit the potential of creating employment opportunities and so many qualified people are left jobless while investors fear the safety of their businesses.

However, the high rate of unemployment can be controlled by careful family planning to regulate the high population growth rate. In addition, the government should enact laws that govern the use of natural resources to avoid wastage and misuse. Learning institutions should adopt education systems that produce manpower that suits the job market. Security should be given high consideration in national budgets to provide secure investment opportunities in all countries to foreigners and the locals.

Unemployment has resulted to the rise of many social, economic and political evils and every one should play their roles in ensuring there are available opportunities for qualified candidates. Unemployment lowers the Gross Domestic Product due to high dependency on the working population hence limiting national growth, but with careful long and short term planning many states will successfully fight unemployment.

Brophy, Tom. Little Victories: Conquering Unemployment . New York: CreateSpace, 2010. Print.

Cottle, Thomas J. Hardest Times: The Trauma of Long-Term Unemployment . Massachusetts: University of Massachusetts, 2003. Print

Powers, Sarah. Unemployment Doesn’t Have to Suck . New York: Sarah Powers, 2012. Print.

Stringham, Jim. The Unemployment Survival Guide . Boston: Gibbs Smith Publisher, 2004. Print.

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This Isn’t All Joe Biden’s Fault

By Ezra Klein

Opinion Columnist

What Is the Democratic Party For?

On Thursday night, after the first presidential debate, MSNBC’s Alex Wagner interviewed Gov. Gavin Newsom of California. “You were out there getting a chorus of questions about whether Biden should step down,” she said. “There is a panic that has set in.”

Newsom’s reply was dismissive. “We gotta have the back of this president,” he said. “You don’t turn your back because of one performance. What kind of party does that?”

Perhaps a party that wants to win? Or a party that wants to nominate a candidate that the American people believe is up to the job? Maybe the better question is: What kind of party would do nothing right now?

In February, I argued that President Biden should step aside in the 2024 election and Democrats should do what political parties did in presidential elections until the 1970s: choose a ticket at their convention. In public, the backlash I got from top Democrats was fierce. I was a bed-wetter living in an Aaron Sorkin fantasyland.

In private, the feedback was more thoughtful and frightened. No one tried to convince me that Biden was a strong candidate. They argued instead that he couldn’t be persuaded to step aside, that even if he could, Vice President Kamala Harris would lose the election and that if a convention didn’t choose Harris, passing her over would fracture the party. They argued not that Biden was strong but that the Democratic Party was weak.

I think Democrats should give themselves a little bit more credit. Biden’s presidency is proof of the Democratic Party’s ability to act strategically. He didn’t win the Democratic nomination in 2020 because he set the hearts of party activists aflame. Support for him always lacked the passion of support for Bernie Sanders or Elizabeth Warren or even Andrew Yang. Biden won because the party made a cold decision to unite around the candidate it thought was best suited to beating Donald Trump. Biden won because Democrats did what they had to do, not what they wanted to do.

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