Scource: CNN Money
In this article, it discusses the two opposing views of if the unemployment rate will ever return to its normal rate at about 5%. Back in 2008, the American Economy took a sudden dive into what we now call "the Great Recession." Stock Markets around the world were effected by this, the housing market went down, and the unemployment rate soared from 5% to 10%. In February of this year, the rate decreased 8.3%. Federal Reserve Chairman Ben Bernanke believes that the sudden rise in the unemployment rate was only due to the regular business cycle, and that by 2014, the rate will return to its normal numbers. On the other hand, Nobel Prize winning economist Edmund Phelps believes that due to permanent shifts in the job market, the return to a 5% unemployment rate is a "pipe-dream."
Based on the two viewpoints, do you think that the unemployment rate will return to its normal 5%, or do you think it will stay up at 8.3%?
It is hard to decide what I believe the unemployment rate will do in the future. Both viewpoints in this article have very good points. I personally believe that the unemployment rate will return to about 5% like Chairman Ben Berkanke said. I also agree that the sudden rise could be due to the regular business cycle. When we have guidance meetings about jobs we may want to do when we graduate from college, we usually talk about the predicted need of jobs in the future. In many cases, we talk about these rises in order to be able to get jobs in the future. Learning this information has made me realize that many new jobs are coming about because of technology. This fact alone makes me believe that the unemployment rate will return to 5% in the future.
ReplyDeleteI agree with what Michaela said that it is hard to decide. Because my clearest memories are recent, I know life mostly as living during the "the Great Recession" and can't picture anything else. I am used to the unemployment rate being high, and hearing about the bad economy. Therefore, I don't think that the economy will be changing significantly in the future. It is hard to come back from the crash in 2008 and it will take a lot longer than 2014. But, I also agree that this could just be one of the cycles that the economy goes through. Because I don't know much about the economy's history, I can't tell for sure. If it is just a natural swing, then I think it is more dramatic than it has been in the past which makes me think it might not ever go back to normal.
ReplyDeleteI agree with Kayla and Michaela that it is hard to decide whether the unemployment rate will go back down or if it will stay high. Since 2008, people have been struggling to get jobs because of the bad economy. I'm not sure if it will go back down because people are still really struggling to get jobs. However, maybe it is just due to the regular business cycle. People may start finding jobs again in a few years but you never know. Hopefully the economy will get better and people will find jobs. If I had to pick whether I thought the unemployment rate will stay the same or go down, I would pick that it would stay the same because of how our economy is. However, that does not mean it will be like that forever!
ReplyDeleteThis is a really tough decision to make, just like the students above me said. With the economy in the shape it is now, it is difficult to see it making significant improvements in the relatively short amount of time. A major factor that could affect what the outcome will be is the upcoming presidential election. If one of the Republican candidates just so happens to beat Obama, they may make big changes to the economy. These changes could be either positive or negative. If they made a really good change, it may boost the economy and lower the unemployment rate. So it is hard to make a decision at this time. But since I have to make a decision for this blog, I would have to agree with Edmund Phelps. I do not think the unemployment rate will drop back to 5% by 2014. I feel that that is too short of a time period for the rate to drop to 5%. I do believe it will drop to that rate eventually, but not in two years. I would suggest sometime by the end of this decade. I also do not think one of the Republican candidates will beat Obama in the presidential race. Whether it be Romney or Santorum, I just don't think they have what it takes to beat Obama. So there probably won't be major changes to the economy that could affect the unemployment rate too much.
ReplyDeleteI agree with Matt Dang. I do not think that the economy will fall back into its own just because time passes. It was said above that we are predicting the jobs that we will need, which is great as long as there are enough people to do them. With colleges becoming increasingly expensive, the number of people who cannot afford going to college to learn the skills needed for some of these jobs. So I agree that there will probably be more jobs in 2014 than now, but will there be enough people to do them?
ReplyDeleteLike others said this is difficult to decide. Like Kayla said all I really know is a bad economy because before the recession hit i really didn't know much about the economy. I like to think that the economy will get better because it will have a huge impact on me. However, I don't think 2014 is a realistic date for unemployment to go down. I think eventually it will go down though like Michaela said new jobs are being created all the time so this will bring the rate down but 3% is a pretty big drop and i dont know that it can be done in 2 years.
ReplyDeleteI agree with almost everyone above who said that this is an extremely hard decision to make. We all hope the unemployment rate will drop down to the normal 5% but who knows what's going to happen. Because it has decreased from 10% to 8.3%, I do think it is possible that it can go down even more, but there is also a chance of more people becoming unemployed as well. I'm not really sure how to answer this question because like I said, no one knows what's going to happen. There could be more jobs created within the next two years so that by 2014, the unemployment rate will be back to the normal 5%.
ReplyDeleteI feel that it depends and there is really no way to be able to judge what the future unemployment rate will be. Jobs are being outsourced out of the country because the amount that it would cost to employ those people out of the country is cheeper then in the country and that only make sense to do that at a busyness perspective. But on the other had never jobs here in the country are being made with new energy resources like natural gas. There are new jobs being made in the country and leaving the country. I feel that our unemployment rate could do anything at this point, i can get better, worse, or stay as it is.
ReplyDeleteI believe that it is possible for the unemployment rate to go back down to its normal 5%, but it might take a few years, because like Alex said no one really knows what exactly is going to happen and how long its going to take. It could happen, more new jobs are becoming available and i'm sure people are quickly taking them.
ReplyDeleteThis is question that is all about opinion and theories. Although both these been are greatly educated and intelligent neither has the power to predict what the future has to offer. If people could they would have known that the unemployment rate was going to increase 4 years ago. The past has shown that no one man can dictate how the American economy will be. Throughout Americas history the economy which is directly related to the employment rate has went up and down. In the 1930's we went through what is now known as The Great Depression, and who is to say that this will not recur in years to come. But I do believe that the unemployment rate may go back to the normal percentile if more jobs are created in the next couple years.
ReplyDeleteI agree with Alex and Kim and think that no one knows what is going to happen. I think the number could go back down to normal but there is a chance it could keep going up. It just all depends on the economy and how many jobs are available.
ReplyDeleteI agree with Evan. There is no way to tell how the unemployment rate is going to be this year. Also, I feel that unless our government makes jobs or somehow unemployed people get more encouraged to work, the unemployment rate will go up. I think that due to the fact that many jobs are going to people in other countries because they will work for a lower wage is a very big problem. Personally, I think that the unemployment rate will go higher in the next couple of years if new jobs aren't created.
ReplyDeleteTHIS DISCUSSION IS NOW CLOSED. COMMENTS AFTER THIS POINT WILL NOT BE ACCEPTED FOR CREDIT.
ReplyDelete