Common Causes of Unemployment in the United States

Unemployment is one of the many factors associated with a declining economic condition within the country manifested by recession, or the continuing decline of national economic output. Although an increasing unemployment rate will be discovered later months after a recession is announced, it is also an indirect cause for recession. How does unemployment take effect? There are many possible reasons. Some of them are outlined below.

1. Technology. Many US companies today, as a result of the technological revolution, have replaced human labor with machineries, equipments, and computers. A large company that used to employ thousand s of employees to improve mass production may be cut down into hundreds because of the speed and accuracy that these modern facilities can create.

2. Human Population. As the number of people needing jobs increase there is no guarantee that the same number will be provided by employers as new jobs. It is also taken into account that with recessions occurring for example, and with some employees losing their jobs due to layoffs plus the number of new graduates every year, the unemployment rate will naturally go up.

3. Outsourcing. Many US firms have now hired the skills of employees outside the country specifically South Asia in which salaries are lower than the requirement if they hire the services of American jobseekers. Some of these companies will even place their main offices or headquarters in Asian regions.

4. Global Competition. It is now a fact that many US firms have began facing fierce competitions with firms from all over the world. Countries like China, Australia, Canada and the UK have made their marks in different industries. Some companies from outside the US have even rescued losing companies in the country by investing on them.

These are just some of the reason for unemployment in the US.