Causes of Unemployment Free Essay
Unemployment is the other term for joblessness. This term mainly refers to those people who have no job and actively search for it. Therefore, it is significant to calculate the unemployment rate in a particular area. The unemployment rate is calculated mainly by counting the jobless workers and the total number of people related to the labor force in the definite area. The labor force is a term that determines the number of people below retirement age, who are of so-called working age. The people of this category are expected to participate in the workforce or actively search for employment. There is a formula to calculate the unemployment rate in percentage. It is the following: UR = (UW/TLF)*100, where UR – Unemployment Rate; UW – Unemployment Workers; TLF – Total Labor Force.
From the economic point of view, there are a few major types of unemployment. They are Structural, Seasonal, Frictional, and Cyclical. Structural unemployment arises due to the absence of demand for the workers that are available in a particular labor area. Frictional unemployment appears as a result of workers’ moving between locations, careers, and jobs. Seasonal unemployment mainly depends on changes in the seasonal lack of demand for a particular kind of job (Santa Claus Stores in January). However, the structure of the economy differs from month to month. That is why seasonal unemployment turns out to be a type of structural unemployment. Cyclical unemployment occurs in the case the unemployment rate moves in the opposite direction to GDP (gross domestic product). In a case, the GDP rate is low or negative the unemployment rate is high.
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The major factors that define Rio Grande Valley’s economy are the binational job market and its proximity to Mexico. Nowadays, the economy of Rio Grande Valley is rapidly increasing. However, despite rapid job creation the area remains to be poor. According to statistics data, the unemployment rate has grown an average of 4.6 percent from 1997 to 2003. In 1997, the unemployment rate in Rio Grande Valley was above 20%. The constantly increasing population rate makes Rio Grande Valley lead the state of Texas in the unemployment rate. The main reason people cannot find a job in this area is a skills gap. The labor force pool cannot satisfy the jobs available. However, the lower Rio Grande Valley workforce development area is presented in Image 1. Observing statistical data it is compulsory to underline that the unemployment rate has been vibrating during the last 15 years. Admittedly, either in 1997 or 2014 the unemployment rate in RGV reaches a high point (see image 1). During the last decades, the lowest unemployment rate in RGV occurred in October 2007. The highest rate of unemployment in RGV took place in January 1997 and June 2011.
The unemployment labor force in RGV includes either young or middle-aged people. The lack of knowledge and professional skills creates a great problem for jobless people. Majorly, the main reason the unemployment rate is so high is that people of different ages do not have equitable education to find jobs in the work market. The most common type of unemployment in RGV is poor people who have no opportunity to get a good education and find a qualitative job. Moreover, universities graduates have few ways out. The first one is to stay in RGV and become a teacher. The second is to get a degree. Finally, the third is to leave the city. There are almost no vacancies for engineers, webpage designers, software developers, database administrators, etc.
To reduce the unemployment rate in Rio Grande Valley, it is compulsory not only to create new working places but educate people, give them particular skills and training programs to make them become pros in the definite job. The other step to decreasing the unemployment rate is to create a school program that would inform pupils on how to create a plan for further education and career realization. The next step relates to the state. It would bring advantages for the area if the government sets up and realizes some privileges for those who apply for a job. This process turns out to be costly and long-term, but sometimes the contribution brings great benefit.