The term ‘United States’ gives an image of a formidable entity, a veritable ‘Super World Power’ But recent studies have shown that persistently decreasing levels of employment in the US has afflicting the American economy for several years now. There are various reasons that have led to this situation and continue to plague the US economy.
Population and its changing interface
The population of a country and its growth has a direct relation to its economic growth. The growth of population in the US is constantly increasing and leading to the ratio of unemployed to increase since jobs are not increasing at the same rate. Current statistics reveal that though the rate of employment in the US rose in the recent years, it has been attributed to a decrease in the number of people looking for a job. More and more Americans have been dropping out of the labor force-claiming disability, seeking higher education or simply retiring and sitting at home. These are not regarded as unemployed. Similarly Women work force is decreasing, due to the high cost of ‘child care’ in the US, which on an average is more than 10 percent of a middle class family’s income.
Structural Changes and its consequences
In the US, the emphasis is on “Multi-tasking”. This coupled with increasing automation and Outsourcing are some of the reasons for the increasing unemployment here. Since the labor cost and wages is lower in other countries, most of the US firms continue to have operational bases located in the developing countries, thereby causing unemployment on its shores. Also there is a perceptible shift from a ‘tail structure’ of functioning to a ‘flatter’ less hierarchical structure that is seen to be more productive and fosters growth; but on the other hand drastically reduces Man power and generating unemployment in the US.
Thus unless a conscious effort is made to remove all aforementioned impediments there is little hope to reduce unemployment in the US and assume that the proverbial American dream will be fulfilled by its own people.
Image: Amir Kaljikovic – Fotolia