Question

You must complete a one-page minimum discussion with your overview of the article and your opinion.

The topic for discussion is unemployment. You must post an article related to unemployment or the different types of unemployment; cyclical, frictional or structural.

• Explain the article
• Explain how it relates to what we are learning
• Explain your opinion about it, support with real-life experience
• Include link to article

Answer 1

The current downturn is a result of a conscious decision taken by authorities to contain the health crisis and the virus led to a complete shutdown of trade, industries, and organizations inducing an economy into supply shock. The lockdown led to increased unemployment around the world .Oil , airline and small businesses were the first to be negatively impacted.

The US till recently was having a 3.4% unemployment which was a 50 year low but the shutdown led to increased unemployment as around "6 million claims were observed at the end of March." In June around "17 million were still unemployed and as per reports around 33 million had filed for unemployment benefits" till recently.Majority of the unemployed are young workers or below 30 years of age and this is has been seen predominantly in retail and food industries .The impact is higher on adult women as 40% of women are working in high risk sectors. Even the once employed have had cut in hours and wages. This hit has been predominantly on Hispanics where around 61% of Hispanic households have lost their income followed by 43% of blacks.

The federal is providing benefits of $600 as weekly benefits but this not enough to ensure the economy gets back on the road .The authorities should soon start building up the economy by focusing on domestic production and reducing the reliance on imports and by providing firms with fiscal packages and tax cuts. This package would induce firms to produce hence increase demand which will directly improve employment.Unlike the other crisis which impacted aggregate demand first, the health crisis led to a complete shutdown inducing an economy into supply shock hence the prolonged duration of the shut down put the economy into demand shock. The economy due to the experience of the past recession know how to deal with a fall in demand but the current situation is a fall in supply .Hence the long term impact of COVID on the economies and unemployment will depend on the policies implemented and regulations during the phased opening up as economies.