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Labor Market Movements

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Analyzing Unemployment

1. Determinants of labor market movements

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Macroeconomic shocks

The US GDP is below the sustainable levels, and the non-profit sector is left at the mercies of donors and economically challenged sponsors. The financial crisis of 2000 and the ongoing great recession are in many ways reminiscent of the Great Depression of 1930s. The history of events seems to be repeating itself considering the number of lost jobs due to business closures and cutbacks. In the same manner, the entry-level workforce after college has trouble finding jobs because large companies, which make up the macroeconomic environment vibrant, are not hiring any more. The situation is worse for those with least experience, for many companies are cutting off the less-experienced categories of employees and retaining the long-tenured workers, which results in a major employment imbalance (Gillespie page).

The situation on the non-profit sector gets tougher than in the for-profit sector in that partial and full closures have been an issue for the better part of the 21st century. As the problem of unemployment is reaching new heights, the average annual salary of employees is comparatively low, with some people earning less than $15,000 per year. Given that a large portion of the population is of retirement age, the problem of retirement savings is of paramount importance. Most companies have had to withdraw or cut back on their retirement benefits in response to global macroeconomic shocks. This, to an average citizen has done more harm than good, for people are not willing to retire sooner, therefore, distorting the labor market development (Gillespie page).


The groups of people mostly affected by poverty in terms of income poverty and associated health challenges include the aging that are approaching the retiring age, non-English speakers, and children. Whether, for citizens or investors in the United States of America, the spoken language is a contributing factor to the type of life one would lead. Children are dependent of their parents for education and provision of other basic needs. Diet, clothing, and quality education are necessary for healthy development of children. Failure to achieve all these renders masses of children as poor (Brewer, Browne, Joyce, and Sibieta page).

The most widely observed groups of people living in the US and considered relatively poor live below the 60% household incomes of the modern-day median. A study carried out between the beginning of 2009, and the end of 2010 showed that the number of people living below the poverty line was declining without consideration of raising the number of renting and buying of houses. The ministry of labor of the US announced that a drop in the relative poverty from 19.4% to 17.1% within the period of 1996-97 had been achieved while an increase had been registered from 17.1% to 22.2% from 1997 to 2010. Whichever way the statistics from labor ministry indicate, the issue of health seemed to be constant as many as 17% of Americas citizens struggle with health issues in terms of settling bills and consulting doctors for their medical conditions. These problems are associated to the factors originating from income distribution. Unemployment is a part of the determinants of the labor market movements and is responsible for the health and child poverty highlighted herein.


The non-profit sector is operating on debt hence promoting budgetary deficits due to the high cost of maintenance. The Canadian Organization for Economic Cooperation and Development (OECD) reported in September 2010 that the economic stimulus that the government was ready to cash out was not a solution to the negative economic drift Canada assumed. The economic stimulus package is reported to serve as a boost for stock market and increase the money in circulation. Liquidity problems, on the other end, would hit the low class since employers are not willing to hire and consumers are faced with spending difficulties (Rainwater, OHiggins, & Smeeding page number).

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The 2010 Even Income Distribution Plan was aimed at fostering economic balance between the rich and poor. The economy as outlined in the plan is a variable whose strength is not defined by taking from the rich and giving to the poor, but rather increasing opportunities for all. If the Canadian index for wellbeing is to change any time soon for the better, the balance between gaining and spending should be even, argued the government (source of the quotation?). What we have witnessed for the last few years or so is a downward movement of the economy leaving fewer opportunities on the socio-economic domain. Reflecting the Canadian perspective of the problem to the US economic status, it is clear that institutions, both business and financial, support each other and the economy as a whole. This in return affects the labor market movements through the opportunities created and destroyed (Rainwater, OHiggins, & Smeeding page number).

2. Unemployment rate and nonfarm payroll forecast for November

Considering that the US index for wellbeing lies majorly between the for-profit and non-profit sectors; there is an existing problem in that the for-profit and non-profit sectors do not balance in terms of input and output volumes. There is no way sustainable GDP growth can be achieved if the profits made by for-profit sector are used to tend to non-profit sector. Analysts have assessed the economic situation in the US through the foreign policy and discovered that the government is selling securities rather than producing goods and services. With the urgent need for new jobs and securing a better future, how can the sale of Treasury securities to other economies help the citizens? In this case, to forecast the unemployment rates and nonfarm payrolls an analysis on the margin of change between for-profit organizations and the fiscal offset not for-profits organization contributes to the economy and the determination of the GDP.

3. Assess Labor Market Prospects For 2013.

With current data indicating a 7.6% unemployment rate and slow GDP of 3%, the 2013 labor market prospects cannot be forecasted accurately. However, with regards to ongoing great recession, the unemployment problem is likely to stagnate at the same level. This is because organizations are adapting to a long term recovery plan by distributing risks and creating opportunities for themselves. However, assuming that the annual growth in employment rates is 1.2%, the annual growth of new job seekers is about twice that rate. This means the amount of income per household is likely to increase slightly in 2013, but the collective unemployment rate would be considerably stagnated around 7.0 % and 8.0%.

4. Policies to Resolve Unemployment Rates

The growth of average annual income for every citizen would probably push up the standards of living. The mechanism that works to the advantage of the US citizen is one that aims to put up a fair income distribution procedure. An example of such is a declaration through policy that puts standard threshold payroll for workers and protection of volunteer workers in terms of professional benefits like health care and Medicare.

The government should reflect on the amount poor citizens earn per year and implement a minimum wage. The living cost as high as it is getting, the index of wellbeing should be regular through transfer of funds, priorities, and resources from the sufficiently able ministries, projects, and government undertakings. This would create platforms through which the GDP can be improved. The result of this undertaking would be to stabilize the position of job creating organizations; hence, creating an environment that welcomes foreign investments aims at stretching the window of employment.

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