Unemployment in the Labor Market: The USA Case Study

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Unemployment refers to the state of not having a job. Acs and Carrington argue that redundancy comes about when people actively search for work, but they are unable to get one (89). Over the past few decades, employment has been used to measure the vitality of economies around the world. Analysts have identified various causes of joblessness. The reasons include lack of adequate skills and getting stuck between jobs.

In this paper, the author will discuss how unemployment is measured in the United States. The different categories of redundancy will also be analyzed. In addition, the author will highlight the measures taken by stakeholders in the labor market to resolve the problem. The concept of exporting unemployment will also be reviewed. Finally, the author will discuss the basic policies set by the U.S government to tackle joblessness.

Measuring Unemployment in the United States

National statistical agencies employ different techniques to measure unemployment in the country. Dean notes that the variations limit the legality of redundancy data at the national and global levels (76). In the United States, the Bureau of Labor Statistics measures unemployment using two distinct labor force reviews. The United States Department of Labor and Commerce collects employment statistics every month. On its part, the Current Population Survey measures joblessness using the ILO definition.

The methods used by the two bodies underestimate the rate of unemployment in the market. The reason behind this is that the agencies utilize different classification criteria. As a result, they come up with different findings. In addition, the methods fail to take into consideration the incarcerated working population and workers who have given up on actively searching for jobs (Ghose and Majid 110).

Categories of Unemployment

There are four primary categories of unemployment. They include frictional, structural, cyclical, and seasonal redundancy.

Frictional Unemployment

Frictional unemployment is a form of joblessness associated with people stuck between occupations. It is also associated with individuals searching for their first jobs or those transitioning from one trade to another. Haugen notes that frictional unemployment is short-lived (102). In addition, this form of redundancy comes about when the economy attempts to create a match between the people and the available professions.

Structural Unemployment

According to Verdugo and Furceri, this form of unemployment is based on the structural challenges within an economy (63). In addition, it focuses on the inefficiencies in the labor markets. The primary cause of this type of redundancy is the inability of the labor market to offer everyone a job due to mismatches between skills.

Cyclical Unemployment

Cyclical unemployment is considered to be the worst form of joblessness. Werding notes that workers in different industries lose their jobs due to a decline in the demand for products (113). The primary cause of cyclical unemployment is economic instabilities.

Seasonal Unemployment

According to Acs and Carrington, seasonally unemployed people are workers who are out of jobs and searching for occupations during the off-season (99). The form of unemployment occurs because some trades exist at different times of the year.

How the Labor Market Corrects Unemployment

The fluid nature of today’s global economy has a major impact on structural changes in the labor market (Dean 75). The effects are experienced both at the state and at the national levels. Despite the challenges, the labor market reacts variously to unemployment. The elements of price, supply, and demand for the workforce are some of the major forces that help the market to correct redundancy. One of the strategies used to counter joblessness is liberalization. Ghose and Majid argue that the measure increases opportunities by expanding the market and establishing new workplaces (105). The process allows workers who have lost their jobs to acquire new occupations over time.

Exporting Unemployment

Exporting unemployment refers to the act of devaluing the local currency against other trading cohorts. The primary objective of the initiative is to make one’s products more affordable in the global market. When goods are sold at reasonable prices, the demand increases (Verdugo and Furceri 82). Consequently, more workers are required to enhance the supply chain for these products.

Policies Formulated by the U.S Government to Tackle Redundancy

There are various policies used by the government to reduce unemployment. To address structural unemployment, the authorities use regional policy incentives. The approach reduces occupational immobility by helping firms develop extra retaining schemes needed to provide employees with skills to take up new jobs (Haugen 96).

The government corrects frictional joblessness by lowering the real worth of unemployment benefits and availing information about job openings (Werding 79). Another policy used involves reducing direct taxes. Seasonal unemployment is addressed through the use of policies aimed at reducing the time spent between occupations. The government seeks to reduce cyclical redundancy by employing expansionary demand-side policies (Dean 65). The measure enhances economic stability.


Unemployment continues to be a major problem in the world. The rapid economic changes affect the measures put in place to correct joblessness. Despite the challenges, several policies have been developed to tackle unemployment. However, for the strategies to work, the stakeholders must focus on the primary causes of joblessness.


Acs, Gregory, and William Carrington. Understanding and Responding to Persistently High Unemployment, Washington, D.C.: Congress of the United States, Congressional Budget Office, 2012. Print.

Dean, Andrew. Tackling Long-Term Unemployment amongst Vulnerable Groups, Paris: OECD, 2013. Print.

Ghose, Kumar, and Nomaan Majid. The Global Employment Challenge, Geneva: International Labor Office, 2008. Print.

Haugen, David. Unemployment, Detroit: Greenhaven, 2011. Print.

Verdugo, Lorenzo, and Davide Furceri. Crises, Labor Market Policy, and Unemployment, Washington, D.C.: International Monetary Fund, 2012. Print.

Werding, Martin. Structural Unemployment in Western Europe: Reasons and Remedies, Cambridge, Mass.: MIT, 2006. Print.

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