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... ured goods grows and remains high, employment in the secondary sector remains high as well. There is also a third, or tertiary sector of employment comprising such activities as the service trades, teaching, administration, scientific research, medical care, art, and tourism, as well as other pursuits that are not carried on in factories. Technical progress in those areas is slight, compared to that in the primary and secondary sectors, and so the activities in the tertiary sector require a large number of people. In countries with high living standards, the demand for products of the tertiary sector keeps increasing; thus employment in that sector increases more rapidly than in the others.15 The US Department of Labor recognizes nine major industry groups including: services, retail trade, government, manufacturing, finance, insurance and real estate, wholesale trade, transportation and public utilities, construction and mining. The Department of Labor takes each division and analyzes its employment and unemployment rates as seen in the chart below.16 Industry Employment in 1998 Employment growth from 1990 to 1998 Unemployment Rate in 1999 Overall Unemployment Rate in 1999 Services 35.0 million 39.6% 4.0% 4.2% Retail trade 22.3 million 18.2% 5.7% 4.2% Government 19.1 million 10.1% 2.2% 4.2% Manufacturing 18.8 million 18.8% 3.6% 4.2% Finance, Insurance and Real Estate 7.2 million 15.6% 2.3% 4.2% Wholesale trade 6.8 million 17.1% 3.1% 4.2% Transportation and public Utilities 6.8 million 18.8% 3.0% 4.2% Construction 5.9 million 39.6% 7.0% 4.2% Mining 0.6 million declining 5.7% 4.2% The services sector is the largest industry, in number of establishments and number of employees. The section accounts for 38.6 percent of all establishments.
The service industry in an industry that provides a service rather than goods. This industry also showed a high amount of growth from 1990 to 1998, equal only to construction. Construction also had the highest unemployment rate in 1999, probably due to frictional unemployment as many construction workers often find themselves between projects, and are thus counted as unemployed while between jobs. The great decrease in employment in the agricultural sector is an important phenomena in modern history. People who leave agriculture must not only give up their means of livelihood but also their residence and their way of life. This migration from a rural culture to an urban industrial one has involved many millions of people.
For a long time the migration was chiefly toward the factories; as recently as 1930 it was imagined that the world of the future would be one huge factory, but this has proven untrue because, though the output of factories has continued to grow, factory employment has not increased. Employment in this sector in the United States reached its peak in the period from 1920 to 1970 at about one third of the labor force. Since then the expansion in employment in the US Has been in the tertiary sector; service trades, teaching, research, medical care, art, and tourism. Without that expansion technological progress would have led to much greater unemployment or to much reduced working hours. Since the beginning of the industrial revolution people have feared new machinery would lead to unemployment, with machines replacing people in their work. This fear often led to violent attacks on machinery, as in England in the 18th and early 19th centuries.17 There are two kinds of technological progress. First there is intensive progress, which involves an increase in the efficiency with which people exploit nature. Intensive progress results in a reduced need for workers.
Another kind of progress, called extensive progress enlarges the exploitation of nature. The discovery of raw materials enlarges the framework of the economy, and the industrial development based on it creates new types of employment.18 The invention of a new product, such as the automobile has the same effect. In France more than 1,400,000 people make their livings from the automobile, for example, whether as factory workers, garage mechanics, or drivers.19 Intensive progress allows people to satisfy their existing needs with less labor; extensive progress, on the other hand, satisfies needs that either did not exist or were not satisfied previously and creates new jobs. However, the two types of progress do not automatically balance each other. In an economy that is not highly developed, technological progress in agriculture may allow the population to consume more food. In a more developed economy, one in which the standards of living are already at a high level, the same progress does not lead to increased food consumption; the end result may harmful with lower farm prices and unemployed agriculture workers. In a period of general technological progress, employment is likely to be unstable because production must adapt itself to the changing demands of the market.
A dynamic economy requires a work force that is mobile enough to move out of sectors in which technological progress has reduced the need for labor and into sectors in which labor is in short supply. This migration is not pleasant for those involved, since it is inevitably accompanied by some degree of unemployment or underemployment. 20 Outside of the basic category of unemployment there are various degrees of non employment and underemployment. A period of inclement weather can put day laborers out of work, and they often receive no aid of any kind. In the rural areas of many countries there are large numbers of people who may be called underemployed because they do not have full-time work even though they are fully recognized as part of the labor force. In modern industrial societies the statistics of employment sometimes conceal substantial amounts of underemployment.
This is because the unemployed may be brought into factories where they are not needed and have insufficient work to do. If the economy is a competitive one, each firm or enterprise has an incentive to keep its own operations efficient enough so that it makes a profit, and this tends to prevent the hiring and maintaining of surplus workers. 21 Since the end of World War II the governments of most of the developed countries have become committed to a program of reducing unemployment and underemployment. In France, for example, the constitution explicitly charges the state with assuring full employment.22 The Charter of the United Nations makes full employment a major objective of its members. Governments have followed various policies in pursuit of full employment. One general approach is to try to improve the quality of the labor supply.
Another is to try to alleviate the effects of unemployment and underemployment. A third approach seeks to maintain economic activity at a high level through monetary and fiscal policies. Finally, there is the method of economic planning attempted in France, where the government planning commission sets targets for the various sectors of the economy that are linked to forecasts of manpower, in the belief that the difficult and complex problems of employment and unemployment cannot be separated from other problems of economic and social development. The first consistent efforts to deal with the instability of employment caused by technical and economic progress involved providing information on the state of the labor market and on the qualifications of those seeking work.23 Public employment services developed, particularly during the 1930's, which, on the basis of this information, were to direct applicants more efficiently to existing jobs or to help them prepare for occupations and careers in which labor needs seemed likely.24 Most of the large industrialized nations now have such agencies, which are designed to bring together the two sides of the labor market. The rapid progress of technology has required a raising of the qualifications of workers: the number of skilled laborers has increased more than that of the unskilled, technicians more than skilled laborers, and engineers more than technicians. In response to this trend, many governments in industrialized nations have endeavored to either provide or subsidize training programs for those members of the work force who might be able to benefit from them.25 The use of monetary and fiscal policies to keep the economy functioning at a high level of employment has been undertaken in a number of countries since the Great Depression.
In periods of recession or of growing unemployment the government may increase demand by expanding the money supply or by increasing its own spending. This approach has some success in the United States during the 1960's when a major income tax reduction, tax incentives for business investment, and a large increase in federal expenditures brought the unemployment rate down to 3.5 percent in 1969. In the years that followed, however, the United States was faced with serious inflation, and government policies that were undertaken to stabilize prices had the effect of causing unemployment to rise.26 All of the developed countries try to soften the impact of unemployment through unemployment compensation. Unemployment insurance pays benefits to qualified workers who are unemployed and looking for work. Unemployment payments are intended to provide an unemployed worker time to find a new job equivalent to the one lost, without major financial distress. In the United States, the unemployment insurance program is based on a dual program of federal and state statutes. The program was established by the Federal Social Security Act in 1935.
Much of the federal program is implemented through the Federal Unemployment Tax Act. Each state administers a separate unemployment insurance program with minimum guidelines established by federal statute. Who is eligible, the amount they receive, and the period of time benefits are paid are determined by each state.27 Bibliography: WORKS CITED Lineberry, William P. The Challenge of Full Employment. The HW Wilson Company. New York. 1962.
Denk, James. "The Downsizing of America." The New York Times. 1996. Tiffany, Cowan, and Phyllis Tiffany. The Unemployed. Prentice Hall, Inc. NJ 1970. Malabre, Alfred L.
America's Dilemma: Jobs vs. Prices. Dodd, Mead and Company. NY. 1978. Simon, Paul. Let's Put America Back to Work. Bonus Books. Chicago.
1987. Cahn, William. A Pictorial History of American Labor. Crown Publishers, Inc. NY. 1972. Bureau of Labor Statistics.
"Industry at a Glance." Online. Internet. Available: 25 June 2000. "The Whitehouse at Work." Online. Internet. 8 January 1999. Available: Bureau of Labor Statistics.
Monthly Labor Review. "Economic Outlook" November 1999. Online. Internet. Available: The New Encyclopedia Britannica. Encyclopedia Britannica Inc. Chicago. 1990..
Research essay sample on Unemployment