Unemployment Rate Due to Corona Virus
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The article “How Bad Is Unemployment?’Literally Off the Charts’” by Nelson, Casselman and Ela was published In New York Times on 8th May 2020 and covers the issue of unemployment rate in the U.S that has been caused due to the corona virus pandemic. The unemployment rate in the U.S is at 14.7%. (Nelson, 2020) The most affected job industries are the hospitality and leisure areas, tourism, airlines, construction, manufacturing and education.According to research done by economists, the level of unemployment in the future seems to continue to rise. (Nelson, 2020) The demand for employees by employers seems not to increase in the future. This is largely due to the consumer demand. Most businesses do not foresee consumers’ demand for their products. In the restaurant sector, for example, after the corona virus crisis, consumers will not be in a position to splurge their money on expensive meals as they are not sure of where their next income will come from. For this reason, employees of restaurants or such sectors are not provided with job security. They may continue staying unemployed. If at all there might be any job opening, individuals will rush to get into employment even at the prevailing low wage rate so that they may be able to pay bills.
The unemployment rate of 14.7% shows the percentage of population which is jobless or unemployed in relation to the whole population. It helps in identifying which sector of the economy needs to be improved in order to provide more employment opportunities for the unemployed and at which wage rate. The article also shows the percentage of individuals who are on temporary layoffs and not who are permanently unemployed. The rate has increased from 20% to 78.3%. This is a sharp increase in temporary unemployment. It signifies a major economic recession which will adversely affect the economy of the whole state. It will lead to a decrease in the Gross Domestic Product (GDP) of the whole state.
When the unemployment rate is high, it negatively affects the whole economy. When most of the individuals, who are providers of labor, are not employed, the productivity level of the country reduces. Production processes are slowed down leading to a decrease in the revenue or profit that the country ought to generate. When the unemployment rate is high, individuals tend to lose their source of income. The standard of living continuously tends to rise making it very expensive and not affordable for individuals to keep up with. Individuals may end up living in debt due to the extra loans that they took out or the exhaustion of their credit cards. When these particular individuals manage to get some extra source of income, they opt not to pay off their debts but instead pay off their bills and provide for their families. Unemployment also leads individuals not employing their skills into production. Individuals who are naturally gifted with skills may end up not exploiting their skills in the industries which may also lead to a decrease in productivity. High levels of unemployment rates may also lead to social crimes. Individuals may opt to perform crimes such as robbery and drug related crimes which are detrimental to the society as a whole.
Unemployment rate was used in this article to compare the proportion of the whole population which is unemployed. It helped to bring into perspective an approximation of the whole population which is not getting paid the minimum wage rate. The article also chose to use percentages to identify the proportion of the population which was temporarily laid off and is yet to resume their various job descriptions. The percentage changes also brings into clearer perspective whether there is an increase or decrease in the unemployment rate. It is easier for the reader to understand the trend of unemployment in the country or state. It also makes it easier to forecast future trends in unemployment based on the past percentages provided.
References
Nelson, D., Ben, C., & Ella, K. (2020). How Bad Is Unemployment? ‘Literally Off the Charts’. The New York Times.