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Reasons for Unemployment in The US

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People of an organization or country are regarded as the most valuable (living) assets in the world. Employment could be explained as the state of being employed or occupied in a job that pays the subject money. Therefore, unemployment could be defined as the state of being unemployed or out of work. A high rate of unemployment is a clear indication of poor national economic performance, whereas low employment is an indication of good national economic performance.

The United States is a highly developed country that is regarded as a world superpower. No matter how powerful and developed the country is, it too suffers from a considerable level of unemployment, which has been a huge issue for the US Government. This article aims to explain the main reasons or causes for unemployment in the US.

Explained below are some of the main Reasons for Unemployment in The US.

The growing population in the country has led to the ratio or percentage of unemployed to increase. It has to be taken into notice or consideration that jobs do not increase with the increase in population. Hence, it is logical for the level of unemployment to increase in such a circumstance.

Most American firms are facing fierce competition from firms outside the country. Hence, this has made it impossible for them to cope with it, thus resulting in financial instabilities and thus closure. As the companies in the US close down, employees of those organizations would be left unemployed.

Most firms perceive that as an organization becomes flatter in structure, business operations would take place much more smoothly, when compared to operations of an organization with a tall structure. This is the perception in US companies of late. Hence, to make the tall structures much flatter, companies engage in de-layering, thus leading to a serious erosion of employment.

More and more US companies are automating their production facilities. Hence, people are replaced by machines, thus leaving a huge pool of people unemployed. This is known as Technological Unemployment.

There are plenty of seasonal products and businesses in the US, and as the seasonal periods are over, those employed on related areas are laid off, thus leading to unemployment. This is known as Seasonal Unemployment.

Most people in the US choose to remain unemployed because the minimum wage of $6.55 per hour is more than what they could earn had they worked at another place. Hence, this too had led to people not taking jobs, thus leading to unemployment.

Since wage rates outside the US (especially in South Asian countries) are lower, most of the US companies base their operations outside the US. Hence, the possibility of potential employment is reduced. Similarly, operations which were already taking place in the US, were subcontracted or outsourced to companies in the Asian region, thus leading to a huge amount of job loss in the US, thus further increasing the pool of unemployed. For example, US companies have based their call centers in India and Sri Lanka thus increasing the level of unemployment in the US.

Another reason for the increased levels of unemployment in the US is because most of the youngsters or younger generation now goes for higher studies instead of taking up a job. Hence, the level of unemployment has increased further.

Most of the companies in the US (also to be seen in other countries as of late) encourages multitasking. This means one person does several jobs, which would have been done or carried out by a number of additional people otherwise. With increase in emphasis on multitasking, it has led to somewhat of an increase in the level of unemployment.

These are some of the main reasons for the increased levels of unemployment in the US and the US government is taking numerous steps to improve this position.

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