cause and effects 3.1

Determining Cause and Effect

Eng. 115
Professor Matthew Norsworthy
February 22, 2014

Rising unemployment may lead to a reduction in the supply capacity of the economy. If workers remain unemployed for a sustainable time, they may lose their skills, thus reducing their human capital. High rates of long-term unemployment in the economy may mean there is a mismatch between those skills that workers possess, and those for which there is a need. I believe that unemployment in your 20 's has a huge effect on living standards for people in their 50 's. This includes: increased health risks (particularly for long term unemployed) (Richard, V).
The longer the duration of unemployment, the lower the chances of finding fresh employment. Also, losing income involuntary has a significant impact. Many people have major commitments (mortgage, credit agreements, etc.) that fall in real living standards. Other things being equal the greater the amount of goods and services produced, the greater the labor required for production. Economic growth and employment go hand in hand. Regulation and taxation that discourage the operation of business will also reduce the need for labor. Entrepreneurs face regulations that force allocation of resources away from production. For example, rather than purchasing raw materials needed for final production, managers must instead purchase equipment mandated by OSHA or EPA. Rather than using clerks to expedite sales, they must use clerks to fill out forms required by the state. Regulations and taxes may have an especially strong impact on smaller companies since they have less access to capital markets than larger enterprises.
When fewer small businesses start and when larger firms curtail expansion, jobs that otherwise might be created never come to be. Regulations sometimes overlooked in their impact on unemployment are those dealing with occupational licensing. If individuals cannot use their cars as cabs, sell homemade sandwiches on street corners, or move furniture without the appropriate licenses, their job opportunities become limited. Licensing boards control practitioners in the relevant occupations, and these practitioners often use their licensing powers to restrict the number of entrants to their occupations. An overall assessment of licensing will consider the screening services provided by the boards and the increased cost of licensed goods and services as well as the inhibiting effects of licensing on employment. I 've made it through the process to obtain a license for a business. It is not comfortable. Several policy decisions are necessary like the location of the zones. The specific taxes and regulations from which the business would be exempt, and the duration of the exemptions. In general, fewer jobs related within them.

I also believe that there should be government programs to help provide jobs. Two of the largest programs, forerunners of the present CETA programs, were the Neighborhood Youth Corps, providing work experience, training, counseling, and education to high school drop-outs, and the Manpower Development and Training Act training unemployed workers on the job and within the classroom. Whether or not these programs are successful fully depends on the increased earnings participants received as a result of their programs, a question that economists have not yet answered decisively. Other criteria by which these programs might be judged or given less attention. These include the alternative uses for the resources to government training programs and the number of jobs that would be created with alternative allocations of resources. Using the federal government as an "employer of last resort" is another method of reducing unemployment. In addition to the taxpayer costs of this program, it is important to note that the number of jobs created by the federal government may severely overstate the economy-wide net employment gains.
Federal grants to state and local governments may fund already existing jobs and shift the financing burden from state and local to federal taxpayers. Public employment jobs may also discourage workers from applying for private sector work where they may be sorely needed. Goods and services may go unproduced because of taxes; therefore, labor and capital would be away from the private sector. Finally, policy makers should bear in mind the difference between efficient use of labor and reducing the Bureau of Labor Statistics ' measured unemployment rate. If all unemployed individuals are assigned to unproductive jobs, thus lowering measured unemployment, would anyone be better off? If so, why not only define recipients of unemployment insurance and welfare payments as "employed"? Although, this policy may save certain jobs, it restricts consumers in their choice of foreign goods and allows them to purchase only domestic products, which may be more costly. This discussion of economic growth, basic employer and employee incentives, and policies designed specifically to combat unemployment indicates that there is an extensive program of anti-unemployment policies, each with issues. Although individual policy makers will differ on the value they place on the goals that can be achieved under various policy options, they should be aware of the trade-offs in possible policy decisions. Also, the minimum wage, by appearing to guarantee a certain level of earnings, are often thought to be an anti-poverty program. Unfortunately, by reducing employment opportunities, the minimum wage may promote poverty (Red, R). Examining the overall results of policies emphasizes. The point that a policy should be judged by what it actually accomplishes rather than by what its proponents intend or hope it will accomplish. It is important to keep in mind that some unemployment can be productive.

The economy works most smoothly not when workers take any work, but rather when jobs and workers are well matched. Increasing the duration of unemployment and searching longer for work will allow individuals to find jobs for which they are best-suited. Quits and fires also can be viewed as productive by severing mismatches between jobs and workers. Finally, new entrants and reentrants to the labor force need time to adjust to a new or at least somewhat unfamiliar labor market.

References
Alexandria, Red; Washington Times
Stone, Jack and McCaw, Joe; Unemployment: The Shocking Truth of Its Causes, it has Outrageous Consequences and What Can Be Done About It.
Vedder, Richard; Out of Work: Unemployment and Government in Twentieth-Century America
U.S. Department of Labor, Bureau of Labor Statistics Employment and Earnings, Vol. 28, No. 4, April 1981. www.cbsnews.com http://dir.alabama.gov/uc

References: Alexandria, Red; Washington Times Stone, Jack and McCaw, Joe; Unemployment: The Shocking Truth of Its Causes, it has Outrageous Consequences and What Can Be Done About It. Vedder, Richard; Out of Work: Unemployment and Government in Twentieth-Century America U.S. Department of Labor, Bureau of Labor Statistics Employment and Earnings, Vol. 28, No. 4, April 1981. www.cbsnews.com http://dir.alabama.gov/uc