An Economic Problem for Dummies! Todays problem: Unemployment.

Ever since the recession hit in the late naughties, i feel so compromised calling it that, unemployment levels have been going through the roof. This is due to, primarily, the recession making jobs harder to find. There was little increase, overall, in the increase of the flow of workers out of jobs, with the marginal increase due to companies laying off potentially unnecessary employees to help restrict spending. This means that jobs were especially hard to find and this is was because growth in companies slowed considerably as firms didn't want to make any moves and decided that, assuming their economic position was sound, they didn't need to make any larger profits and they would be better off maintaining their current revenue levels by having pay cuts and some layoffs of unnecessary jobs. It is also found that the majority of layoffs in the early recession went into jobs without any long periods of unemployment, as employers were unwilling to risk employing new workers.

So that explains the initial rise in unemployment but things aren't currently looking much more positive. But why is that? Growth has for the most part resumed, if at a slow pace, and we are no longer in recession, yet the percentage of jobless people continues to rise. In America 14million people are officially jobless and with 11million working for less than they would like, you have the equivalent of Texas being either unemployed or underemployed.
Despite the general world wide unemployment conundrum some countries, like Germany, the place to be in these times of hardship, have actually recorded lower unemployment rates than before the downturn happened. So that's something to feel good about. Maybe, eventually, we can all be in Germany's sound state. You can feel better about this situation now.
Just kidding! Since the joblessness of current times is actually an especially dangerous kind. A disproportionate number of those out of a job are the youthful. Doesn't seem too bad right? Wrong, youth joblessness increases that chances of lower wages in the future and greatly increases the likelihood of future unemployment. Plus, nowadays, those out of a job will remain unemployed for considerably longer times, it's becoming chronic, with the average time period for unemployment now being 40 weeks, up from 17 before the downturn. This brings with it detachment from the work place and other bad side effects.
Unemployment is hampering our economy damaging finances, increasing social volatility and reducing growth rates. So it's pretty important to fix it. But how? It won't be easy, although that's a given other wise I wouldn't have to be writing this article.
The main cause of the current unemployment is severity of the recession and the instability of the recovery so one primary concern should be to encourage growth as a growing economy will need to support its growth with more jobs, which will help decrease the unemployment rates. The governments will need to agree with the bond markets to put in measures to bring the deficits into their control in order to help secure growth. It's also been proved, by the almighty German economy, that shortening work hours, by using subsides, encourages firms to keep employees as well as subsidising the use of certain, new capital goods, as it will encourage the spending on them from firms and thereby increase the jobs in capital's production. It has however been proved that subsidies in green capital goods do little to help the joblessness. Alas, raising the retirement age would leave more space for growth, for the short term at least, so, for the sake of the economy, you should work longer. Although this would be unpopular with the electorate, so politicians seem reluctant to do this.
In conclusion, this sad situation although a potential long term headache that could damage the economy in many ways, is potentially solvable and it should be many of the governments' prime focuses as it is currently holding the economy back.