Economic Research Project

Economic Research Project - Unemployment Rates and...

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Unemployment Rates and Influencing Factors 02-0996-0001 02-0996-0002 02-0996-0008 02-0996-0011 6 Pages
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1 Unemployment Rates and Influencing Factors The four factors of production, although not directly correlated to the unemployment rate, are the avenues through which goods and services are produced, the wellspring of capitalism. Any deviation between the distribution of natural resources, human resources, capital and entrepreneurship will likely induce an adverse effect upon the employment rate. The recent economic recession in the United States exemplifies exactly how these factors of production, specifically human resources, are influenced by unemployment rates (Library of Economics and Liberty). The recession has created a human resource surplus that has infiltrated the ranks of the unemployed. Moreover, throughout the economic crisis, entrepreneurs have lacked the incentive to explore business expenditures, which has resulted in the diminishment of job opportunities and capital. In the troughs of business life cycles, human resource availability continuously compounds while capital and entrepreneurship deteriorates. Thus, the resulting effect in unemployment rates does not necessarily reflect job opportunities or work availability. In fact, there were 3.4 million job openings on the last business day of October 2010 (U.S. Bureau of Labor Statistics). As of current, there have emerged numerous issues for the jobless in their continued pursuit to gain employment. Strikingly imperative to unemployment is the topic of workplace skills and the mismatch that has been highlighted by the current economic downturn. An ever- present phenomenon, the skill base gap has become increasingly representative of the problems employers are facing in the economy of the US (Kojak). Therefore the unemployed workforce skill base has come to be divergent to the current job openings firms and corporations need to fill. With this in mind, the wide spectrum of factors that influence the skill base gap has created a difficult situation in which employers have been rendered inflexible in their abilities to achieve
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2 their desired efficiency (Rich). It must therefore be noted that despite the increase of job seekers in the US, a talent shortage in various sectors has led to many negative impacts to the overall post-recession recovery period. This rise in structural unemployment, which in sharp contrast to the more-temporary frictional unemployment, is not entirely due to weak demand. With research indicating that 14% of employers are encountering difficulties with filling positions (EconGuru), the notion that the worries of recession would have been solved by simple reshuffling of the labor markets has proved inaccurate. Organizations now demand a wider set of skills and talents that in turn have coincided with unfortunate reality that unemployed workers have fallen out of the equation in
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Economic Research Project - Unemployment Rates and...

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