Essay Sample on Unemployment: A Global Challenge, Texas's Struggle

Introduction

Unemployment has been a constant problem not only in the United States but also among developed, emerging economies across the globe. Though the United States government is always trying to curb this problem formulating various policies, it still remains a challenge for the country. Authorities at different levels within the country are also concerned with the issue of unemployment within their territories. The state of Texas has constantly been monitoring the situation of unemployment within its territories over the years.

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There are two standardized measures used in estimating the unemployment rate within the United States including the U3 and U6 unemployment rates. U3 unemployment rate denotes the number of individuals who are jobless but are constantly seeking unemployment. The Bureau of Labor Statistics (BLS) always conducts a monthly survey in which it randomly samples 60,000 households (Data.bls.gov). BLS considers views from individuals who are 16 years old or older. On the other hand, the U6 unemployment rate denotes all jobless individuals who have been actively seeking unemployment in the last 12 months and left discouraged after failing to secure one (Data.bls.gov). It also considers under-employed individuals, those who have gone back to further their education, the disabled, and those who occupy part-time jobs.

The unemployment rate within Texas has been undergoing different spells of decrease and increase over the years. The table below represents monthly unemployment rates within Texas for the years 2005, 2010 and 2015.

Table 1: Monthly unemployment rates for 2005, 2010, 2015

Analysis

The average annual unemployment rates within Texas for the years 2005, 2010, and 2015 are 5.4%, 8.1%, and 4.4%, respectively (Data.bls.gov). The annual labor force was 11,128,543, 12,765,365, and 13,092,454, respectively, for the three years (Data.bls.gov). From the above data, the Texan labor force has been steadily increasing over the years. However, the unemployment rates within the states have been witnessing different spells of decrease and increase annually. In 2005 the average annual unemployment rate was 5.4% (Data.bls.gov). In 2010 the unemployment rate within the state sharply increased to 8.1% on average while in 2015, the rate again sharply decreased to 4.4% on average (Data.bls.gov).

There are several factors that come into play in consideration of unemployment within different economies. The factors may include but not limited to education, demographics, aggregate demand, global competition, and automation, as well as reigning industrial and government policies. Other economic factors, such as inflation rates and interest rates, also affect unemployment within a given economy. Such factors act collaboratively or unilaterally to affect the wage rates, the number of workers required, and the duration of unemployment, thereby rendering a section of the available labor force unemployed.

From the table above, there is a steady monthly decrease in the unemployment rate within Texas across the year. Such a trend can be accredited to the relevant authorities who ensure they formulate appropriate and effective policies that increase employment opportunities within the state, thereby resulting in an increase in the number of unemployed individuals being absorbed into the active labor force. In 2005 the unemployment rate within the Texan state was at 5.4% (Data.bls.gov). However, the unemployment rate increased to 8.1% in 2010 (Data.bls.gov). The primary cause of this sharp increase is the economic depression witnessed in the United States in 2008.

The financial crisis witnessed in 2008 resulted from the subprime mortgage meltdown. The crisis affected the United States' economy and other global economies that operated at the same wavelength as the united states. Several business organizations across the country, including those that were in operation in Texas were closed down. Considering the economic strife that a significant number of business organizations that remained in operation were going through, the majority of them laid off some of their workers (Mehdian et al. 21). The large-scale retrenchment witnessed across the United States was a move for these business organizations to stay afloat. It resulted in the massive unemployment rates witnessed among several states within the United States, including Texas.

In 2015 the unemployment rate within Texas was 4.4% on average, representing a sharp decrease in the state's unemployment rate from 8.1 % in 2010 (Data.bls.gov). The decrease must have been from the implementation of effective policies formulated by both the responsible authorities to curb the damage caused by the 2008 financial crisis. These policies bridged the existing gap in demand and supply of labor to a large extent. They included those that lower the existing interest rates so as to lure individuals into acquiring capital that can enable them to exploit their entrepreneurial ideas and create more employment opportunities. Some other policies may include those that create tax exemptions, thereby enticing companies to expand and create more employment opportunities (Mehdian et al. 21).

Conclusion

The dynamism that exists in the labor market can be a little bit complex due to several factors like economic and demographic factors, as well as the reigning policies instigated by both industries and the government. How Texas has recovered from the damage caused by the 2008 financial crisis that resulted in the unemployment rate of 8.1% in 2010 is quite impressive. However, it is upon the relevant authorities to bridge any gap that exists in the demand and supply of labor within their respective economy considering the factors at play

Works Cited

Data.bls.gov. "Bureau of Labor Statistics Data." Databases, Tables & Calculators by Subject, 2019, data.bls.gov/timeseries/LASST480000000000003.

Mehdian, Seyed, et al. "The Effect of the 2008 Global Financial Crisis on the Efficiency of Large U.S. Commercial Banks." Review of Economic and Business Studies, vol. 12, no. 2, 2019, pp. 11-27.