Category: Economics

What is the best way to grow jobs and reduce the unemployment rate?

Write my unemployment essayGovernmental intrusion into a natural economic cycle may look like a threat to the economic stability. Capitalism boosts competition between small businesses, and that is how a free market economy works. Theoretically, free markets promote a sustainable growth of 2-3% that can create about 150,000 jobs monthly. But the real market conditions may differ dramatically. Bubbles and busts of the business cycle may create new jobs and swipe them as fast, which is not the growth we need. To assure a greater stability, the government shall regulate business environment with effective fiscal and monetary policies.
The easiest way to create new jobs is to launch expansionary monetary policy. It increases the money supply and reduces taxes allowing consumers to take cheaper credits and businesses to expand. The Federal Reserve can also apply quantitative easing for borrowers and lower the rate on the discount window. These measures are effective only before the recession.
Government spending is a sure way to create new jobs, but not all spending is equally efficient. According to the University of Massachusetts, construction of roads, bridges, and other basic infrastructure can create maximum jobs. Unemployment benefits also help to create a maximum of new jobs. If the unemployed have some money to spend, the economy always wins.
Payroll tax cuts also allow consumers to spend more money. It allows either to reduce prices or to increase wages for employees. Companies can also buy more supplies or hire more workers. Economists argue that a payroll tax cut given to new employees can create almost as many new jobs as the unemployment benefits.

How did the NAFTA agreement affect business in the United States?

Write my NAFTA essayPresident Bill Clinton once said in his speech that the North American Free Trade Agreement was the way to create “jobs of tomorrow”. The agreement between the US, Canada, and Mexico was intended to enhance economic integration of the three economies through cutting taxes on exports and imports between them. These tariffs are trade barriers protecting economies from excessive exports that may hamper domestic production. But the protectionist policy is not always good for international partnership. Thus, President Clinton decided that the US joined the agreement to improve relations with its closest neighbors.
More than 20 years after NAFTA came into effect, the treaty is blamed for the damage it caused to blue-collar jobs in the US. Because many jobs were outsourced to Mexico for its cheap workforce, the low-income American workers saw their salaries reduced by 17% at the end of the 1990s. Some workers lost their jobs later because automation and computerization made human force irrelevant. On the one hand, trade between the three countries rose from $290 billion $1trillion by 2016, which is a huge political and economic success. Besides, NAFTA helped the US automobile sector to become competitive on the global scale due to the cross-border supply chains.
Whether positive or negative, NAFTA made the Mexico-US relationships very integrated. In case the agreement is broken, new jobs will be created at a great cost for economic sectors and domestic consumers. People got used to buying cheap exported products for decades. Separating both trade sectors may inflict a bigger fiscal deficit in the US.