Every government struggles with unemployment, inflation, and
recession/depression, and each government must enact policies to combat these
problems. In the United States, both unemployment and inflation have been fairly low
(5 percent or lower) for much of the past two decades. But even low unemployment and
inflation affect and undermine economic growth. The following chart summarizes the
economic problems faced by states.
STATES’ ECONOMIC PROBLEMS
|
Unemployment
|
Inflation
|
Recession/Depression
|
| Not everyone who wants to work has a job. | The price of goods increases. | Economic failure or collapse occurs in many sectors of the
economy. |
Unemployment
Unemployment occurs when there simply are not enough jobs for
everyone who wishes to have one. Every economy has some unemployment because
people leave jobs (by choice or against their will) and are usually unemployed
for a time before they find new employment. Others are unemployed for longer
periods.
Example: Analysts measure
unemployment as a percentage of the work force who cannot find jobs. What
counts as high or low unemployment is, to some extent, relative. In the
United States, analysts consider a rate of unemployment above 5–6 percent to
be high, even though many western European countries frequently have
unemployment rates above 10 percent.
