GECON200-Topic #2: Jobless Recovery and Credit

First off. When writing your blogs, do NOT simply restate or summarize one of the articles that I give you to look over. You are supposed to be forming an opinion, and trying to defend your opinion using facts that you obtain from an article. If someone else has already used your statistic, you should NOT just use it again. You’re supposed to be finding information here in related articles. On to the topic…

There is a fair amount of discussion lately about what is called a jobless recovery. This would be a situation where we experience growth, but not through the addition of new jobs. As an article by FoxNews points out, there is substantial competition for most of the available jobs in the economy. Bloomberg also discussed the facts about job competition in the U.S. The unemployment rate has climbed even further, to 9.8% most recently, while underemployment is near 17%.

Additionally, many newly jobless consumers are facing stricter credit requirements from their credit cards and other lenders. There are also many new rules for lenders to prevent ‘predatory lending practices’ which will almost certainly lead to restricted credit to borrowers.

Questions you might try to answer:

  • If you believe our economy is on track for a jobless recovery, what remedies do you suggest we use to produce new jobs. 
  • How can the U.S. government help to solve the underemployment problem.
  • What role do you believe the new credit laws, along with the contraction in credit, will play in our jobless recovery. Do you believe these credit card ‘rights’ are necessary and are they being implemented at the right time?

I would like your statements to be as subjective as possible, or in jargon terms, positive and not normative in nature. Also, remember, I want you to keep your descriptions short, basic, and related to classroom content. Read other students comments before posting, and please leave your name with your posting.

33 thoughts on “GECON200-Topic #2: Jobless Recovery and Credit”

  1. As the United States begins a recovery from the current recession many people are worried that it will become a jobless recovery, where the economy will slowly begin to rebound but the opening of new jobs will occur at an extremely slow rate. The US is at a huge risk of facing a jobless recovery. Many companies which cut employees during the recession have managed to function without them, and in an effort to make a better profit while the economy improves again, they will try to continue to function at current numbers of employees. The companies also fear that as the economy improves, their numbers may not improve enough to support re-hiring many people who they had previously laid off. With as many as 6 qualified people competing for every 1 open position, competition for the few open jobs is incredibly high, and unemployment and underemployment rates are going to remain high, even as the economy rebounds. In order to create new jobs the government needs to step in, by using some of the money from the stimulus package. Creating new building or road projects and working on creating new technologies would open up jobs to a variety of different people with varying skills and trades. The government can also more programs like “cash for clunkers,” which created a big boost for auto sales. Better sales leads to extra income which gives companies the flexibility to hire more workers. These incentive programs also re-assure companies that their sales will pick up with the improving and they will need more workers to combat the increasing demand for their goods/services. Also, using money from the stimulus package to change tax policies so that they don’t take away huge amounts from new or struggling business would give businesses the chance to hire more people and be successful.K. Willnerhttp://fns.blogs.foxnews.com/2009/10/11/the-jobless-recovery/comment-page-6/?action=late-new

  2. According to the Bloomberg article, the unemployment rate is at the “highest level since 1983. (2)” This is common knowledge, however, these complications place great pressure on Obama and his administration to find remedies. The job market is believed to take years to recover (1). The US government has proposed the idea of adding an “$8,000 tax credit for first-time homebuyers and creating new credit for companies that add jobs. (2)” While this is wishful thinking, the stimulus had minor impact on the unemployment rate, and these proposals probably will as well. The most insightful thinking is the acceptance of reality, knowing that employers will lay off people as business declines and when it picks back up again, they will either require overtime or accept their maintenance of output (1,3). The federal government has authority over the medical, intelligence and defense sections that are prime areas in need of employees (3). They can effectively increase the hiring in these sectors, thus, lowering the unemployment rate. With advancements in technology, clean energy jobs are readily becoming available, especially with sungevity.com (3). This could be a remedy for unemployment and provides opportunity for many people once it is fully developed, and the government could advertise this program effectively.1)http://www.foxnews.com/politics/2009/10/09/job-competition-reaches-highest-point-recession/2)http://www.bloomberg.com/apps/news?pid=20601068&sid=aYZfOLKO2Zpk3)http://www.cnn.com/2009/LIVING/personal/09/23/howard.unemployment/index.html#cnnSTCText

  3. Underemployment persons are those who have been looking for a job and have stopped because they are discouraged or have resorted to a part time job because it’s all they can get. If we had this group in with the unemployed statistics the numbers goes all the way up to 15.8% in April of 2009 (www.washingtonindependent.com). The government needs to find a way to track exactly how many people are underemployed. As of now, we do not have a way to count those workers who have had pay or hour cuts recently (www.washingtonindependent.com). Gertrude Goldberg, chair of the National Jobs for All Coalition, states “By under-defining it you reduce the notion of a mass of people at risk in terms of tomorrow.” Basically, the government wants to keep lying to the nation as a whole so we don’t panic even more than we already are. I believe the government needs to take this situation more seriously, start counting just how many are underemployed, and let the citizens of America know what is going on.Laura Danaher

  4. Although many experts predict and fear a jobless recovery there are many steps being taken and can be taken to prevent this from happening. Our unemployment rate has reached an all time high and job creation action needs to happen quickly. According to the Bloomberg article Barack Obama issued a statement that he is “working closely to explore any and all additional options and measures that we might take to promote job creation”. This has been a concern and goal of his since his campaign election. Because so many people are losing their jobs they are picking up any jobs, even if it doesn’t fit them, to do what they can to get by. On the premise of creating jobs we should concentrate on hiring those that fit the job and get out of the structural unemployment hole. Concentration of producing new jobs should be with the future in mind, not working on creating them from the past. Technology is improving everyday which ultimately creates hundreds of potential job openings. On top of that with new credit laws puts our economy further into a pitfall. Having people unable to gain credit or open credit cards puts them more into debt and unable to find jobs or have the essentials to live their life. This contributes to making it harder for an individual to seek a job. When things might be at there worst these new credit laws come into place putting more pressure on the unemployment rate of our economy where prospective new “employer had rejected her after running a credit check”. Placing these new rules contradicts what the goal is, trying to create and fill jobs but not hiring because of a credit score when they are trying to get a job to fix it. It just becomes a never ending cycle.-Mary Kim>http://www.bloomberg.com/apps/news?pid=20601068&sid=aYZfOLKO2Zpk>http://online.wsj.com/article/SB125511860883676713.html?mod=rss_economy

  5. The U.S. is on track for a “jobless recovery” unless things change. (1) A reason that the unemployment rate increases and then is very slow to recover is, during recessions businesses become very possessive of their good laborers; they will also shorten hours providing less output. (1) Paul Krugman says that the reason we have had jobless recoveries in the past have been because The Fed has not been controlling the recessions, they have just been due to credit. Another theory is that firms used to believe that workers were their strongest assets. (1) Now the theory is that their workers are more “disposable,” and that the machines or organizations etc. are the most important assets. All of these reasons are predicted for the job loss. The question now is how to fix it. (2) President Obama thinks that through innovation we can create more jobs to help stimulate the economy, and prevent another jobless recovery. (2) Ways to help promote jobs is to ensure educated people, and increase technology, health care, and researching According to Obama. The government is working on trying to figure out the best ways to promote job creation, but so far has not had much luck. Job losses continue to climb though the rate has slowed down considerably. 1. http://delong.typepad.com/sdj/2009/07/we-are-live-at-the-week-with-the-jobless-recovery-has-begun.html2. http://www.cnbc.com/id/32952155L. Burton

  6. The state of our economy is no longer news to any of us, and neither is the fact that every day it is harder and harder to find suitable jobs. What many people do not know, however, is that the rebound of our nation's economy will not be equally paralleled with a rebound of the job market. This is not something that can solely be solved by the stimulus package. Our country is currently attempting to climb out of a recession, but our standard of living as a whole has not been compromised. Today's society, in general, has not seen the extremes that were experienced by those of the "Great Depression". As the economy begins to look up, Americans are more and more determined to gain back to luxuries that they had before. Many baby boomers and older citizens who may consider retiring, are reevaluating their situation, and staying in the labor force. This is interfering with the amount of opportunities for younger generations seeking first time jobs. Aside from an effective fiscal policy, the government also needs to address the issue of social security and health care very soon, because all of these issues are interrelated. If companies have more experienced staff, why would they hire new trainees? If everyone had health care, and companies would not have to provide health insurance to their employees, would they hire more workers? If the government provided health care to students attending college, would more low-skill workers seek higher education? Would this reduce structural unemployment? I think that the government needs to address all of these issues as quickly as possible, or there will indeed be a jobless recovery. e.parr

  7. With unemployment and underemployment rates at record highs, it is clear that immediate government action is imperative. However, dealing with current unemployment is not the only area where immediate intervention is needed. It is estimated that there are approximately 6.3 unemployed workers vying for every new job opening (1). As firms in the United States are less motivated to hire new employees, our employment crisis worsens. Indeed, “layoffs are slowing…[but] hiring has yet to begin” (1). According to Ben Bernanke, “economic growth [alone] probably won’t be strong enough to ‘substantially’ bring down unemployment”- it is the jobless rate that Americans need to be concerned about (2). So, what can our government do to create new jobs? As we already know, human capital is of extreme importance when dealing with employment. By providing currently unemployed Americans with training and education, they will be more eligible to find a job that matches their skills. The government should sponsor projects that create new jobs, such as roadside work and cleanup. The government could also give grants to firms so that they can afford to hire new workers (3). Policy must be made as soon as possible to prevent further economic downturn.(1) “Job Competition Reaches Highest Point Since Recession.” Fox News.com, October 6, 2009http://www.foxnews.com/politics/2009/10/09/job-competition-reaches-highest-point-recession/(2) Schlisserman, Courtney. “U.S. Job Openings Fall to Lowest Level in at Least Nine Years.” Bloomberg.com, October 9, 2009. http://www.bloomberg.com/apps/news?pid=20601068&sid=aYZfOLKO2Zpk(3) “gcse economics – the big picture: unemployment – remedies.”http://tutor2u.net/economics/gcse/revision_notes/big_picture_unemployment_solutions.htmLauren Trani

  8. Thousands of people are waiting for job opportunities to arise from employers who can only offer so many openings. During this recession, “Employers have cut a net total of 7.2 million jobs” (FOXNews). The only way to lower such a high employment rate of 9.8 percent (npr) is to create more jobs. The president and his economic advisory are trying to find ways to “promote job creation” (Bloomberg). In order to really create more jobs, the US can chose to improve technology that can create better products that consumers would want to buy, thus increasing consumption and the demand for more products. With a higher demand for products, more jobs can be created in factories and businesses. This is only one solution that can decrease the unemployment rate, even if only but a small percentage. D. Chithpravongsahttp://www.foxnews.com/politics/2009/10/09/job-competition-reaches-highest-point-recession/http://www.npr.org/blogs/money/2009/10/unemployment_continues_stubbor.htmlhttp://www.bloomberg.com/apps/news?pid=20601068&sid=aYZfOLKO2Zpk

  9. In recovery from our recession many economists wonder what would be the best way to avoid a jobless recovery. However what many people don’t realize is that we are about to enter a robotic revolution. As stated in an article called Robotic Nation by Marshal Brain many, many jobs are being replaced by kiosks and automated self service systems. In the next several decades we will have to figure out how to deal with the fact that our society will lose a massive amount of jobs to this new technology. As stated in Moore’s Law the processing speed, memory capacity, hardware, and number and size of pixels in our digital electronics is growing in exponential numbers. The fact of the matter is that our technology will continue to grow at an amazing rate, to the point where our entire labor force could be replaced by automated machines. In order to cope with the job losses we will need to create a new series of jobs in the United States. First off many schools should start to teach technology to kids at a younger age. This way when they grow older they can be engineers for these automated machines and eventually help to create new technology. Also we need to train people on how to repair these machines in order to help keep our system running at a smooth pace. Overall we need to create a new job market that is more educated on how to operate these new machines. Lastly it is important that the government puts a tax on new automated technology this way they can pump that money back into the economy. In a capitalistic society people need money to consume, and with fewer jobs in the future the only way to get this money is through taxes. Marco Romaniellohttp://marshallbrain.com/robotic-freedom.htm

  10. The United States is in desperate need of trying to alleviate unemployment in today’s society. “Employers in September cut 263,000 jobs, many more than the predicted 180,000”, proving that job cuts are even worse then originally believed (2). With this being said there needs to be drastic measures taken in order to produce job availability. According to Shierholz, to get back to pre-recession levels in two years would require more than 500,000 new jobs per month, a pace of job creation that hasn't been seen since 1950-51” (1). Although this goal may currently seem unrealistic, setting goals and trying to produce a plan to begin with seems like a practical start. Obama says that he is exploring ways to create more jobs, which might initially create a jobless economy but will hopefully open the job market in the future (3). With this being said the current unemployment rate is still extremely high and an immediate plan of action should go into effect in order to turn the economy around and provide jobs for Americans. (1) http://www.foxnews.com/politics/2009/10/09/job-competition-reaches-highest-point-recession/(2) http://www.npr.org/blogs/money/2009/10/unemployment_continues_stubbor.html(3) http://www.bloomberg.com/apps/news?pid=20601068&sid=aYZfOLKO2Zpk

  11. I believe that the unemployment issue in today’s society will not be resolved until the economy is stable and back to normal. Although Obama implemented a stimulus package of $757 billion, nothing has really changed since then. Apparently it was not enough money to get businesses hiring employees again. The government needs to create some sort of incentive in the mean time to make companies, businesses, etc. want to offer new job openings. As mentioned in the Fox News article, House and Senate leaders are contemplating offering new credit to businesses that create new jobs. Other than offering new credit and more money to businesses as incentives, I don’t know if there is any hope in ending unemployment and underemployment issues until the economy has recovered. Businesses cannot afford to keep those who are unemployed employed in a time like this. Some things that may help would simply be creating new businesses. People need to work for these new businesses thus creating jobs. The government could also create a committee to brainstorm job ideas for those unemployed, even if it is a small, petty job that can give people some sort of income until the economy is restored. Those two ideas I think would be the only alternatives in the mean time, and even that may not work.Michael Warrenhttp://www.foxnews.com/politics/2009/10/09/job-competition-reaches-highest-point-recession/

  12. It's obvious that our economy is in a slump. However, it is slowly improving. But as the economy improves, the job market is not. We continue to see the number of unemployed and underemployed citizens rise. The number of unemployed Americans doubled from the beginning of the recession to 14.9 million in August, according to the Fox News article. Because the unemployment rate is going up this also means that, essentially, you are competing with more people when applying for a job. There are about 6.3 workers competing for each job opening(Fox News Article). Compare that to 1.7 workers competing in December 2007, when the recession began. As for a solution, Obama says he is "exploring any and all additional options and measures" to improve the job market. We need more jobs to be created so that we can get out of this economic slump and start the improvement of the job market.Janna Lee

  13. Although our economy is reaching its highest point in recession there are some ways that could help produce new jobs such as reducing the amount of working machinery. Citizens need acquire the right skills to help work machines, as well as companies reducing the amount of machinery. I also agree with President Obama’s approach towards the “new consumer agency to protect Americans against financial abuses.” I appreciate how the proposal would be “looking out for the financial interests of ordinary Americans,” and believe that it would help provide citizens a mission statement to follow. Another big issue is the fact that people don’t know how to budget, such as Karen King in the article “The 'Democratization of Credit' Is Over — Now It's Payback Time.” If the legislator developed a required course on budgeting for citizens it may help reduce the number of number people in debt. http://www.foxnews.com/politics/2009/10/09/obama-urges-congress-create-consumer-protection-agency/?loomia_ow=t0:s0:a16:g2:r1:c0.089604:b28221338:z0Obama Urges Congress to Create Consumer Protection AgencyErica Winchester

  14. Our economy is in a state of turmoil due to the ever increasing number of people fighting for jobs. "The number of job seekers competing for each opening has reached the highest point since the recession began, according to government data released Friday (1). In order for these job seekers to be able to find more jobs, our government needs to come up with a better border policy plan. A huge reason why jobs are so hard to find is because illegal immigrants have been crossing the border in order to find jobs to support their family. The problem with this, according to the Director of Research at the Center for Immigration Studies, is that the number of unemployed Americans has increased by 2.3 million, while the number of employed illegal immigrants increased by 2.3 million (2). Illegal immigrants are decreasing the demand for labor while they are increasing the supply of labor for firms that hire immigrants. In order for more jobs to become available, the government needs to crack down on firms giving out jobs to illegal immigrants, thus increasing the supply of jobs available. Our government needs to force suppliers of labor to increase their pay and treatment of workers to attract more Americans so the oppurtunity costs for Americans working in construction and food preparation buisnesses are not so high (2). This will in turn slow or even stop the process leading to jobless recovery.-Ryan Oliver1)http://www.foxnews.com/politics/2009/10/09/job-competition-reaches-highest-point-recession/2)http://www.cis.org/articles/2005/sactestimony050405.html

  15. While the so-called “democratization of Credit” may have been the reason behind economic collapse, it is sad to see that the children are being scolded for the faults of careless parents. Credit card “rights” seem to be so logical and necessary that it makes one think how much money the politicians have been receiving from such lobbyists. In a free-enterprise, it is true that people should be free to make their own mistakes. However, having allowed the credit companies to build the debt of so many Americans (whom they knew could not pay and thus suffer from high interest), it does not seem right that the lenders must now pay for a scheme made up by the credit companies. The credit card “rights” should have been implemented from the beginning, and if now, the companies should not be given such a gap to punish their lenders before the new law is put into practice. The U.S. government has once again protected the interest of big companies by sacrificing the lives of the weak. Victoria Jeon

  16. While fears of a jobless recovery are rightly held, the reasons for such a phenomena occurring at this time in the U.S. economy cannot simply be pushed onto the recession. The traditional model of U.S. economics understood market rises coinciding with unemployment drops. However, with businesses finding productivity rises after laying off employees coupled with the fact that more than 500,000 new jobs need to be created every month for 2 years to return to pre-recession levels, it is hard to imagine that such a recovery will happen simply over time. With the traditional connection between market stability and employment severed, we cannot simply assume that employment will rise once the economy returns to normal. With technological advances, streamlining of the U.S. economy in general, shifting employment models and trends, and the changing form of jobs (telecommunication, 4-day weeks, etc); people need to understand that job careers will no longer be the same in the U.S. The jobless recovery may be a continuing trend and underemployment may stay at 10%. People will have to change their thinking about jobs—such as seeking many part-time, freelance type jobs over a full-time, stable job. The face of American careers may be changing. Nicole A. Kim

  17. The only “Recovery” of significance in this “Jobless Recovery” of 2009 is the recovery in the U. S. Stock Market. One of the few positive-news driving forces that has been pushing up the U.S. Stock Market this year is an increase in Corporate Earnings. However, the increase in “earnings per share” of common stock has been driven up primarily because of employers who have been laying off (or firing) workers at a frightening pace because consumers are not buying as many of the goods and services that were acquired annually over most of this decade. As those workers are laid off, employers are no longer responsible for paying the cost (or corporate expense) of the salaries of these former employees. So, for a short period of time, the reduction in the corporate expense of salaries is greater than the reduction of gross income. In other words, the total income of the company is falling, but for a brief period of time the business expense of salaries drops by even more. As a result, the net income of the company goes up, but only for a brief period of time. This reduction in the number of employees will virtually always result in the production of fewer items of goods or services for the company to sell next year than last year. Therefore, any employer who continues to cut a great many jobs will sooner or later reduce the amount of goods and services to sell, and then reduce the gross and net income. Eventually, that employer who is still laying off employees to further reduce costs will run out of employees. When that happens, the employer has no one to produce the products, corporate income falls to zero, and the company goes out of business. This problem is being worsened because consumers expect that their taxes will go up on both the state, and especially on the Federal level. This fact has also been recognized by employers, because employers expect both their corporate and personal taxes to go up. Employers might consider hiring new employees in normal times if and when their business begins to grow. Unfortunately, when the government is promising to end the corporate and personal tax cuts passed under President Bush, employers will often decide to sit on whatever cash they have because they expect their business expenses to go up as soon as those tax increases go into effect.

  18. The US economy is currently facing what economists call a jobless recovery. A jobless recovery is “an upturn in which the economy and corporate profits advance but virtually no new jobs are created to compensate for years of layoffs.” (1) Since the beginning of the recession in 2007, the number of unemployed persons increased from 7.6 million to 15.1 million and economists fear the job market will take years to recover. (2) “The financial fallout from the biggest recession in 60 years is likely to be so costly and so pervasive that new-job creation is likely to be virtually nonexistent for years to come.” So far the larger companies are gradually recovering due to inventory reduction and major cost-cutting. Although the bigger companies are getting healthier, the smaller companies are suffering. Smaller businesses also provide most of the new job creation in the US. Smaller businesses cannot even find enough capital to start up. (3) Not to mention the housing bubble which has clearly popped. Something the government could do is use its power to restrain its tax collections so people who run small and large businesses have a chance to hire more people. Cassandra Lenski1)http://www.moneymorning.com/2009/06/10/jobless-recovery/2)http://www.bls.gov/news.release/empsit.nr0.htm3)http://www.realclearpolitics.com/articles/2009/09/05/the_jobless_recovery_98175.html

  19. Beginning in the late 1970s, federal legislation enabled low-income Americans to live beyond their means by borrowing as much as the rich gaining, "'…access to the same credit instruments as middle-class and mainstream Americans," and with the implementation of the new credit laws it will be much harder for low-income families to get credit cards. Riskiest borrowers such as low-income families are more likely to default or be delinquent in home mortgages. Although I feel that these credit card 'rights' are in fact necessary, I feel that this is not the time for them to be implemented because the unemployment late has reached 9.8% and is expected to continue to rise. The credit card 'rights' are necessary because some consumers are still having considerable difficulties maintaining their credit debts and scores. What is happening currently, however, is that in order to make up for their upcoming losses in February, credit card companies are charging customers more now. "Banks and credit issuers are looking at their own debt and trying to collect as much as they possibly can," says the president and chief executive of the American Financial Services Association, Chris Stinebert. This is just making things worse because credit card companies with increased interest rates and fees are slamming consumers. Instead of helping consumers, the new credit laws (which ironically have yet to be implemented) are hurting more than helping.-S. Scharf

  20. As economy begins its slow climb out of the recession, many unemployed workers will stay unemployed. This is due to the fact that many businesses are not willing to take a substantial risk with hiring new workers. The possibility of a jobless recovery forces us to consider the options in order to avoid this crisis. Something that can be done, and has been done, is to simply throw more money out to businesses. However, this bailout method has failed in the past. Another possible solution is for the government to invest money in the “green" movement. Not only is this a smart solution for our environment, but many unemployed workers could find new jobs in the newly created areas of work. According to Juan Somavia, the head of the Geneva-based International Labour Organization,“Investments in energy efficiency, clean energy technology, and in renewable energy have enormous potential to create productive and decent work.” These new jobs would also pull in both skilled and unskilled workers. This plausible solution would not only benefit our deteriorating environment, but also our deteriorating economy.http://www.worldwatch.org/node/5404Ryan Waldron

  21. People are afraid because they do not have options. And until options become available the economy will not recover fully. People are afraid of losing their jobs because we are in a recession and companies are tightening their belts by cutting jobs. But people are not just afraid of losing their jobs but their inability to find a new job. There are on average 6.3 people vying for the same job, overcrowding at job fairs, and a decrease in the need for companies to hire workers to keep up production (Fox News Article). So more and more people are working twice as hard for the same paycheck with the overwhelming feeling of be happy that you have a job because in the current job market it is hard to find a job. The high rate of under-employment, 17% currently, (Fox News Article) shows that many people are willing to take jobs just to have a paycheck and not be unemployed because the job market is in such shambles. In order for the economy to recover fully the government is going to have to step in so that companies start hiring again. Unemployment is high and hiring is low so until there is more a balance between those wanting jobs and jobs available there is going to be longer recession. The government should work to make a tax credit for companies that create jobs and hire people to fill the positions. Because, once someone stops being unemployed and has a job their income can be used to purchase goods and facilitate economic recovery. With close to 10% unemployment that is 10% of the population that is not spending money on goods and services; that promotes jobs in the US and abroad.Sara Dolinger

  22. The US government needs to continue with its intervening and socialistic agenda by establishing programs and legislation that will create jobs for Americans. With no improvements in sight, (the jobless rate will “still probably be above 9 percent by the end of 2010,” Bernanke said) (Bloomberg), the US government must once again step in to save the private sector. The rate of job openings in August held at 1.8 percent, matching July’s reading as the lowest in records dating back to 2000 (Bloomberg), the best way to improve this statistic is to look at America’s history. With all the references to “The Great Depression” it would be wise to copy some of the ways that the US got out of the depression. The US government should copy the New Deal and create programs for social improvement like the Civilian Conservation Corps. New legislation or grants could come from the government like those that were given to the Public Works Administration. Even ridiculous “bridge to nowhere” jobs should be started, anything that gives people the opportunity to work and to learn new skills. Companies and Congress must swallow the initial cost of creating new jobs by understanding that once more people are working they will consume more and therefore speed up this recovery. While “the number of unemployed Americans doubled from the beginning of the recession to 14.9 million in August” (Fox News) the US government and the private sector must create any type of job for an American workforce desperate for work. Kyle Winter

  23. It appears that the United States is indeed on the way to a "jobless recovery" and that it will be years before the economy is completely turned around. However, Americans must learn from the mistakes that were made over the past decade and not repeat them. The prosperity seen in the mid 2000's was not real wealth, just the appearance of wealth sustained by sky rocketing home prices and credit card debt. America must begin manufacturing goods again. Our economy can't be based on debt. New credit card laws are desperately needed to keep high risk borrowers from taking on more debt than they can ever repay. If this means denying credit to some people so be it.W. Carter

  24. The biggest problem our economy is now facing is not losing your job, but finding a job once you are unemployed. While our economy may be headed toward a jobless recovery, a stimulus package might seem like the best alternative (1). Obama recently reported there was a “…record U.S. budget deficit for the fiscal year ended September of $1.4 trillion…it was the biggest U.S. fiscal shortfall since World War Two…” (4). The funds for a stimulus packages aren’t really there. Before we all lose hope, there have been recessions, such as the 1990-91 and 2001, where the jobless recovery fixed itself. Now instead of sticking to old habits, “…in the more recent recessions, it seems that we have more employers using this as an opportunity to change what they are doing in a more basic way…” (2). Employers are closing facilities that are incompetent and ultimately improving their own business model. For example, “… Ebay Inc. said Wednesday that it would lay off several dozen employees as part of an internal restructuring…” (3). This might be fueling the jobless recovery, but in the long run will be more effective at stopping underemployment. The credit card crisis is probably the most important factor in fueling the situation we are in now (2). Because credit card companies aren’t giving out loans as frequently as they used to, new businesses can’t take place of others that didn’t survive the past recession. Our best bet is to turn around this situation. “…the Obama administration is working on measures to help small businesses get easier access to credit…” (4). If this is actually followed through, then small businesses can hire people who are looking for work and the unemployment rate can fall as we recover, instead of not moving.Courtney Walker1)http://www.foxnews.com/politics/2009/10/09/job-competition-reaches-highest-point-recession/ 2)http://www.npr.org/templates/story/story.php?storyId=113847257 3)http://www.washingtonpost.com/wp-dyn/content/article/2009/10/15/AR2009101500617_2.html 4)http://www.washingtonpost.com/wp-dyn/content/article/2009/10/18/AR2009101801111.html

  25. I believe in order to get the economy on its way back upwards there must be a more strict immigration law put in place. Because the economy and unemployment are so low, employers are hiring people who can work for the lowest wages. Most of these people are illegal immigrants. This will not solve everything though. The government needs to lower interest rates. By lowering interest rates businesses would be more tempted to barrow money for projects. This would create more jobs. Also another possibility would be to give tax breaks to companies that create jobs. If a company creates 100 jobs they get 2% off of there taxes.

  26. In my opinion, the increased unemployment rate is the direct result of the government’s active stimulus packages in response to the current recession. The added funds funneling into these large corporations are allowing them to sustain a level of growth to test their productivity under a decreased labor force in their individual corporations. The companies can operate under an ideal productive measure as set forth by the CEO’s under strict hiring freeze limitations. I believe that the government needs to take a more active approach in creating new jobs to enhance a more credible and trustworthy means of production such as our nations struggling higher education elements and the growth of inner cities where unemployment is a central concern. Creating more positions in education at any level including state and private colleges will make education more affordable and allow more young adults the chance to remain out of the labor force and receive a higher education for more skilled positions. The more individuals seeking education will drive more interest in skilled positions and open up more entrepreneurship opportunities that will help our struggling economy and unemployment rates. During the Great Depression in the 1930’s the government established programs such as the Civilian Conservation Corps to stimulate growth and create more jobs for young adults. The Obama Presidency can implement similar strategies to promote a greener earth and benefit our inner city populations with multiple skilled and unskilled job opportunities.

  27. In my opinion, the increased unemployment rate is the direct result of the government’s active stimulus packages in response to the current recession. The added funds funneling into these large corporations are allowing them to sustain a level of growth to test their productivity under a decreased labor force in their individual corporations. The companies can operate under an ideal productive measure as set forth by the CEO’s under strict hiring freeze limitations. I believe that the government needs to take a more active approach in creating new jobs to enhance a more credible and trustworthy means of production such as our nations struggling higher education elements and the growth of inner cities where unemployment is a central concern. Creating more positions in education at any level including state and private colleges will make education more affordable and allow more young adults the chance to remain out of the labor force and receive a higher education for more skilled positions. The more individuals seeking education will drive more interest in skilled positions and open up more entrepreneurship opportunities that will help our struggling economy and unemployment rates. During the Great Depression in the 1930’s the government established programs such as the Civilian Conservation Corps to stimulate growth and create more jobs for young adults. The Obama Presidency can implement similar strategies to promote a greener earth and benefit our inner city populations with multiple skilled and unskilled job opportunities. C. Powles

  28. I do not believe that our economy is on track for a jobless recovery. During the economic downturn, Americans have lost 7.2 million jobs. In my opinion, this is far too large a number for the economy to recover without the addition of new jobs. It is not a coincidence that the economy has worsened as more jobs have been lost. I support the government’s attempts to stimulate the economy, but I think that they need to look at the long term costs vs. benefits for any stimulus packages given. For instance, creating thousands of jobs at a company that will only go on to fail again is not a wise use of government funding. We need to create jobs that will last and provide workers with permanent employment; otherwise we will fall into another recession. I also think the government needs to further regulate credit and lending practices. While people should be responsible for borrowing wisely, this is not always the case. Stricter credit regulations could help prevent another recession, as well as better preparing Americans in the event that they should become unemployed.Brandon Lawlorhttp://www.foxnews.com/politics/2009/10/09/job-competition-reaches-highest-point-recession/http://online.wsj.com/article/SB125511860883676713.html?mod=rss_economy

  29. It’s no surprise that the pressure is building on Obama to stimulate job creation and dig our economy out of this recession while preventing jobless recovery. According to the Fox News article, “the number of unemployed Americans doubled from the beginning of the recession” and “is expected to worsen”. The likely solution to this growing dilema of cyclical unemployment would be for immediate government action. They need to attack the root of this issue and boost the economy to lead to increased consumption, increased income, and greater opportunities for needed workers. In order to begin this domino-like effect, we need to temporarily and lightly increase taxes on high demand goods. Also, if we rely less on imports and focus on creating an inner-country based system of goods, we could create more jobs in the United States that we usually rely on foreign locations to produce, potentially increasing our net exports. By putting more emphasis on our education systems, this would strengthen human capital and create a broader range of skills to reduce frictional and structural unemployment. In order to engage in this process, the unemployed must be willing to slightly lower their reservation wage in the beginning keeping in mind if this system is successful, their wage will gradually increase. To double our output, it is essential we double physical capital as well as the amount of labor. By promoting saving and investment as well as policies that support research and development, we would promote economic growth.S. O'Connor

  30. The current recession has resulted in unemployment, and more importantly our country is on track for a jobless recovery. In recessions firms let go of employees, finding ways to be just as productive without them they don’t rehire (1). This economic state will continue unless the government intervenes. One suggested method is a “payroll tax credit”; employers would now pay less wage per employee allowing them to hire more workers (2). The government should also be more proactive in job creation. They should expand public organizations and agencies, preferably focused on clean energy and green environment as they return long term yield. This is feasible by “weed(ing) out unnecessary and over-funded government programs”(3). These actions would make for progressive movement, and best possible means to solving the unemployment and jobless recovery crisis. 1 http://www.foxnews.com/politics/2009/10/09/job-competition-reaches-highest-point-recession/2 http://www.foxnews.com/politics/2009/10/09/job-competition-reaches-highest-point-recession/3 http://www.sequimgazette.com/let/articleDetail.exm/Index/article/2009-05-19_Letters_to_the_editor__May_20__2009/Will Kidwell

  31. In response to Victoria Jeon’s earlier stated points, I believe that lenders are also faulty in the credit crisis. She seems to put all of the blame on the lenders for lending out money to people that cannot pay back their credit. However, it was not the credit companies that built the debt of Americans, but the Americans that built their own debt. People knew that they were spending money that they could not pay back. This is evident in the case of Ms. King in the Wall Street Journal article which states, “Out of college and working at the shoe store, Ms. King kept up a busy social life, eating out several times a week and going to movies — even as the collectors called.” She continued to spend on credit even when she knew she was in trouble. Everyone was buying on credit, instead of being fiscally responsible by not buying without the ability to pay back their debts. Instead of looking to the government to place stricter laws on the credit card companies, it is more democratic to educate Americans about credit and the consequences of overindulgence. This country was founded on the idea of self responsibility, not government responsibility. The limits on credit card companies would just be another useless law that would build the size of the government. A Younghttp://online.wsj.com/article/SB125511860883676713.html?mod=rss_economy

  32. The unemployment rate has gone up 1.7% since the recession started in December 2007 and since then over 7.2 million jobs have been cut (FoxNews). Although companies are finding ways to become profitable again with fewer employees, this is only a good thing for those with steady jobs. The worst part about this is the 17% underemployment rate because these are the people who are trying their hardest to work to support their families and are just scraping by if they’re lucky. I feel bad that I’m worried about not finding an internship this summer when there are single moms out there trying to get as many hours as possible at a grocery store to provide for their children. Our economy, especially with our nation’s continued reliance on technology, is headed down a road where skilled labor becomes more and more employable. The government should try to create jobs that reward the educated or encourage people to acquire more skills, or human capital; this may help cut back on a wider group of people receiving unemployment benefits. Zach Pandl said it perfectly, “We’re not going to signal the all-clear on the jobs market until we see hiring pick up.” (Bloomberg). In saying that, I believe that the Feds and Obama administration are moving in the right direction to creating more jobs and encouraging consumer spending with stimulus packages and the cash-for-clunkers plan. The credit card article was very eye-opening because this is a cyclic problem that most people don’t realize is as prevalent as it really is. People borrow money so that they can afford necessities or investments. When the job market is as bad as it is, it’s nearly impossible to earn the money to pay everything back, thus leading into more debt. These bad credit scores are now affecting peoples’ job opportunities and future borrowing. I think these laws are implemented at the worst possible time. The article states that “by June 2009, banks were closing credit-card accounts at a rate of 14% or 15% annually, double the rate of a year earlier” (Kalita).-Nate Solow

  33. According to the Fox News article, to close that gap and get back to pre-recession levels in two years would require more than 500,000 new jobs per month. Since this doesn’t seem very likely because of the severe economic problems the United States is currently facing, it appears that it economists are correct when they fear the job market will take years to recover (1). Although the government attempted to help the economy and decrease the unemployment rate with the stimulus package, they really didn’t help the economy very much. The lack of success of the stimulus package can be seen in the increase of the unemployed, which has increased to 9.8% in September from the 9.7% in August. (2) The ongoing problems with the economy can also be seen in companies not hiring. For example, “many employers are unsure about whether the economy can continue to grow once the impact of government stimulus fades and aren't likely to hire until that uncertainty eases.” I think the government should stop borrowing so much money from other nations in attempt to help the economy, because obviously it hasn’t really been helping that much.(1) http://www.foxnews.com/politics/2009/10/09/job-competition-reaches-highest-point-recession/(2) http://www.npr.org/blogs/money/2009/10/unemployment_continues_stubbor.html

Leave a Reply

Your email address will not be published. Required fields are marked *