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Although the United States has one of the highest economic indicators globally, thousands of Americans are unemployed across the country. Despite the official national records, an actual level of unemployment is persistently high and can be a severe threat if government officials will not adopt necessary measures. Acknowledging the severity of the unemployment rate and understanding its causes is especially crucial during the pandemic aftermath.
Firstly, current economic downfall caused by the COVID-19 pandemic can be the primary reason for the increase in unemployment rates. In April 2020, the unemployment rate in the US had reached 14.8%, the highest rate observed since 1948 (Congressional Research Service [CRS], 2021). Crucially, the unemployment rate for this COVID-19 recession was much higher than the rate for the Great Recession, a 10.0% (CRS, 2021).
Hence, this substantial difference indicates that unemployment caused by the current recession will take much longer time to recover. Secondly, oil price uncertainty can be another reason for the high unemployment threat. Research has found that oil price uncertainty magnifies the rise in the US unemployment rate (Kocaaslan, 2019). Due to pandemic and oil price war between Saudi Arabia and Russia, in 2020, the price of Brent crude oil fell by 30%, the most significant drop since the Gulf War (Devpura & Narayan, 2020). In addition, more governments and companies are moving towards green energy, leading to oil price volatility. Thus, the uncertainty caused by such factors can exacerbate the unemployment rate.
To conclude, the abovementioned reasons are only a few factors that might cause a high unemployment rate in the US. Nevertheless, these reasons indicate that there is a threat of a high unemployment rate in the future. The problem is much more acute for gender and racial minorities and economic sectors such as hospitality and leisure. Hence, during and in the aftermath of a pandemic, government officials must embark on a policy to alleviate unemployment.
References
Congressional Research Service. (2021). Unemployment rates during the COVID-19 pandemic. Web.
Devpura, N., & Narayan, P. K. (2020). Hourly oil price volatility: The role of covid-19. Energy RESEARCH LETTERS, 1(2), 15. Web.
Kocaaslan, O. K. (2019). Oil price uncertainty and unemployment. Energy Economics, 81, 577583. Web.
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