The
current rate of unemployment in America is at a 7.8%. This situation affects
all American people dramatically. Since the mid-nineties we have been seeing a
trend to export jobs to different parts of the world. But the trend in this
decade has increased substantially. One of the main reasons is the loss of
competitiveness in our workforce. This decline in competitiveness will be
enhanced by the effects of financial crisis. The main strategies to focus on to
reduce unemployment rates are: stimulate grow up in small business; motivate
the construction sector and prevent the outsourcing.
To
reduce the unemployment rate reasonably low (5%), in the short term is utopian.
One of the sectors (according to the statistics), which generates more jobs are
small businesses and it is this sector that is most affected by the crisis.
Small businesses are called the work horse of America. At the present time this
sector doesn’t have additional fiscal stimulus. (Aspects that in my opinion
should be a priority.) Small businesses don’t have access to lines credit to
start new projects and they are receiving strong pressure from the bureaucracy
that operates at different levels of government. Logically these aspects make
it very difficult to create new jobs in the world of small business.
Another
element that dramatically disrupts the labor market in America is construction.
This industry has one of the highest unemployment levels and has been, in my
opinion, the most affected by the financial crisis. The recovery in this segment
of the economy will be very slow because the Real Estate market is saturated.
And demand is very low because is difficult to access a mortgage. The fuel that
drives the construction sector is the mortgage. The statistics shows, which for
every 100 properties sold only 3% are cash deals, the remaining 97% need a
mortgage.
To
complicate the situation, the tendency to export jobs to other countries such
as China, India, Pakistan and others will keep growing. Because production
costs in these countries are substantially lower when compared with costs in
America.
To
resolve this serious situation, it is crucial to create economic powerful
stimulus to speed the labor market. These efforts, (lower interest rates and
other programs relating to monetary and fiscal policy), take some time to
produce reasonable results. But what do us need in the meantime? The labor force needs to learn new skills, go
to school and prepare ourselves for new opportunities that soon will emerge.
