Good Example Of Essay On Full Employment

Every economy has a unique structure, and this structure has a capacity to produce. The capacity of production determines the number of businesses and the number of available jobs. Thus, an economy has a capacity to produce a certain number of jobs for the people. If the economy can produce the highest possible jobs or close to the highest possible, and almost all the people who are willing to work can find jobs, we might claim that the economy provides full employment. Full employment does not mean every individual who is willing to work can find a job. Fewer people might not find jobs in a full employment situation.
Fewer people might still be unemployment when the economy is at the full employment level. The fewer unemployed people exist thanks to frictional unemployment, and frictional unemployed people are relatively fewer people. Some people would like to find a new job that might satisfy them relatively more, or they might be getting an education break to change their industry. Consequently, if frictional unemployment is not large, then even we might claim that it is healthy for the economy to have some frictional unemployment. Another unemployment definition is structural unemployment. Structural unemployment occurs due to a structural problem in the economy. For instance, if an economy loses trust of the agents in the economy or the financial sector cannot distribute the financial resources to the productive sectors, even if everything is perfect in the economy, the economy might have crisis and high unemployment. The structural unemployment increases during crises because crises cause from a structural problem in the economy.
Natural rate of unemployment has increased up to 6% after the economic crises started in 2008 because the agents in the American Economy have lost their trusts in the economy, and they preferred not investing or not consuming. Thus, the economy has faced a relatively deeper crisis, and the economy could not produce enough available jobs for the people who are willing to work. Consequently, the American Economy could not achieve full employment after 2008. In the recent two years, the American Economy has started recovering from the crisis and producing relatively more jobs.

The American Economy is facing a Structural Unemployment

The crisis started in 2008 has created some permanent negative influences on the American Economy, and I might claim that the American Economy will face a structural unemployment and subsequently a high unemployment rate in the following years. There are three main reasons behind this: 1) loss of trust in the economy, 2) unstable or weak financial markets, and 3) loss of advantage in the international trade.
The financial crisis has made many people pessimistic about the American Economy and many people believe that the American Economy will be the same again. In another word, many Americans are expecting a transformation in the American Economy, and without observing what will happen to the American Economy they are hesitant to invest or buy real estates.
Secondly, the financial markets in the American Economy were producing a large capital for the new businesses before 2008, and it was comparatively easier to receive loans from the financial institutions. The crisis in 2008 has weakened the financial markets, and the new legal regulations are making relatively harder to get loans in the economy. Thus, it is comparatively more difficult for the people to finance their business through getting loan.
Thirdly, the American Companies have lost their advantages in the international trade to the other large developed countries and the developing countries. Therefore, these companies cannot create enough jobs for the American citizens. Consequently, these reasons cause a structural unemployment in the economy and the natural rate of unemployment increases.