Unempoyment varies greatly over time, making it difficult to manage the population. In this section, we take a look at the Unemployment Rate for the United States from 1951 to 2019. Accurately understanding the fluctuations of the Unemployment Rate is essential for making effective policies to reduce the number of unemployed. We begin by discussing the average rate, and how it compares to other countries.
The average Unemployment Rate in the US is roughly 5.8%, which is slightly lower than a number of other countries (usually around 9-10%). This shows that there is always a certain level of unemployment, as 5.8% of the labor force are unemployed and looking for work.
The Unemployment Rate does not remain constant over time, as it can move from as low as 3% to as high as 11% over the time period. These fluctuations are known as Business Cycles, and are associated with recessions. In the US, we have seen various recessions, from the red recession in 2009 to the authorization of the early 80s and the oil shocks in the 1970s. Each of these recessions causes a big spike in unemployment, with an official recession when the unemployment rate increases by a lot.
Understanding the fluctuations in the Unemployment Rate is key to forming effective policies to reduce unemployment. By analyzing the data, we can recognize that an average rate of unemployment is present and the rate can vary significantly over time. This is why it is important to recognize the cause of these fluctuations andtry to find ways to alleviate it.