Introduction
The term "unemployment" is used interchangeably with "economics." One may not think of unemployment rates without thinking of the economic growth rates of a particular nation. The fact that unemployment is related to economic growth yields two distinct definitions of the term "unemployment." First, unemployment may be considered as a situation in which a person or people of the working-class and would like to be in full-time employment fail to secure a job (Pettinger, 2019). In this definition, no job specification is mentioned, and the unemployed person is actively seeking any available at any reasonable wage scale. However, another situation of unemployment may occur in the case of specialization and wage deals. Thus, unemployment may also be defined as a situation where a person of the working-class chooses not to take the available job at a going wage rate or because the job is not in line with their areas of specialization (Pettinger, 2019). Such people are considered unemployed because they are actively seeking for a career in their areas of professionalism and of the satisfying wage scale.
Unemployment rates rise and decline in economic scales. For instance, the rise in the commercial growth rates lead to industrialization and, subsequently, many job opportunities for the unemployed. Besides, the rise in economic growth raises the demand for production labor. Consequently, the production companies offer a good wage for their workers and thus reducing unemployment due to low wage deals. Also, consumption is a critical component of GPD. Therefore, for the economy to be healthy, a nation needs to offer sufficient labor prices for the employees. In other words, each citizen should be provided with the job of their areas of specialization and excellent wages. Low wages and high economic prices lower both the consumption rates and labor demand. More specifically, a decline in the economic growth results in high unemployment rates and negative impacts on the GPD.
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Figure 1 : showing a fall in AD and lower output (Y1 to Y2), and subsequently, higher unemployment rates (Pettinger, 2019).
An overview of the current unemployment rates in the United States economy for the last ten years indicates a significant economic overhaul. For instance, there was a severe financial crisis in 2008, leading a 7.3% unemployment rate, and a 0.1% drop in the GDP (Amadeo, 2019). In 2010, the nation registered 9.3% of the unemployment rate and a 2.6% rise in GDP following the Obama tax cuts (Amadeo, 2019). In 2016, the nation recorded 4.7% unemployment rates and a 1.6% rise in GDP following the presidential race (Amadeo, 2019). The country realized the lowest unemployment rates of 3.9% in 2018 and a 2.9% rise in GDP as a result of Trump's tax cuts (Amadeo, 2019).
Table 1: showing unemployment rates from 2008 to 2018 (Amadeo, 2019).
| Year | Rate Of Unemployment | GPD Growth | Reason |
| 2008 | 7.3% | -0.1% | Financial crisis |
| 2009 | 9.9% | -2.5% | Jobless benefits extended |
| 2010 | 9.3% | 2.6% | Obama tax cuts |
| 2011 | 8.5% | 1.6% | Debt ceiling crisis. End of Iraq war. |
| 2012 | 7.9% | 2.2% | Fiscal cliff |
| 2013 | 6.7% | 1.8% | Stocks up |
| 2014 | 5.6% | 2.5% | Normal unemployment |
| 2015 | 5.0% | 2.9% | Natural rate |
| 2016 | 4.7% | 1.6% | Presidential race |
| 2017 | 4.1% | 2.4% | Dollar weakened |
| 2018 | 3.9% | 2.9% | Trump tax cuts |
It is worth noting that in most cases, the unemployment rates continue worsening even after economic growth experiences significant improvement. This is because firms may not hire workers until they are confident that there is a stable upward trend in economic growth. This paper focuses on the unemployment rates among young college graduates in the United States. Primarily, the paper conducts a study about the past trends regards the unemployment rates among young college graduates, offers an overview analysis of the current status, and proposes possible solutions to mitigate the college graduate unemployment issue.
Data
The Bureau of Labor Statistics, United States Department of Labor, indicates that there has been a gradual drop in the unemployment rates for college graduates in the United States for the last ten years. The unemployment rate for college graduates was 4.9% in August 2008, 8.7% in August 2010, 6.7% in August 2012, 5.3% in August 2014, 4.2% in August 2016, and 3.5% in August 2018 (TED, 2018). In general, there has been a slight drop (1.4%) in the college unemployment rates for the entire period of ten years (from 2008 to 2018).
Figure 2 : United States Unemployment Rates by Educational Attainment for Persons Aged 25 Years and above (TED, 2018).
In order to understand how the unemployment rates and economic growth rates are related, it is vital first to establish their current trends for the last ten years. The primary parameter that may be used to measure the United States' economic growth is the gross domestic product (GDP). The factors of GPD include nominal GPD, the real GPD, and the GPD growth rates. The nominal GPD is used in the comparison of the United States’ debt, and subsequent adjustment for inflation (Amadeo, 2019). The real GPD, on the other hand, takes out the inflation effect (Amadeo, 2019). The GPD may also be compared with the United States' major economic events to establish the best practices for the promotion of the nation’s economic growth.
Table 2: Showing the United States GPD from 2008 to 2018 compared with significant events (Amadeo, 2019).
| Year | Nominal GDP (In Trillions) | Real GDP (In Trillions) | GDP Growth Rate | Reason |
| 2008 | $14.713 | $15.605 | -0.1% | Financial crisis |
| 2009 | $14.449 | $15.209 | -2.5% | Stimulus act |
| 2010 | $14.992 | $15.599 | 2.6% | ACA.Dodd-Frank |
| 2011 | $15.543 | $15.841 | 1.6% | Japan earthquake |
| 2012 | $16.197 | $16.197 | 2.2% | Fiscal cliff |
| 2013 | $16.785 | $16.495 | 1.8% | Sequestration |
| 2014 | $17.527 | $16.912 | 2.5% | QE ends |
| 2015 | $18.225 | $17.404 | 2.9% | TTP. Iran deal |
| 2016 | $18.715 | $17.689 | 1.6% | Presidential race |
| 2017 | $19.519 | $18.108 | 2.4% | Trump tax cut |
| 2018 | $20.580 | $18.638 | 2.9% | Deficit expenditure |
The unemployment rate among young college graduates is a historical issue. For instance, the unemployment rate among the United States young college graduates was 2.58% in February 1998, 3.33% in May 2007, and 3.62% in September 2018 (Swaminathan, 2019).
Figure 3 : showing unemployment rates for both college graduates and other groups (Swaminathan, 2019).
Statistics indicate that unemployment among college graduates is at a higher risk as compared to the other groups of the citizens of the united states (Swaminathan, 2019). For instance, while unemployment for all workers stands at 3.7%, unemployment among college graduates is 3.8% (Swaminathan, 2019). Further data shows that while the overall united states, unemployment dropped to 3.6% by June 2019, the unemployment rate among the college graduates remained at 3.8% (Swaminathan, 2019).
Figure 4 : Showing the relationship between unemployment and debt crisis
Analysis
Data shows that unemployment among the united states college graduates is a historical issue. From Figure 2 above, it can be deduced that there is a slight change in the overall unemployment rates from August 2008 to August 2018. For instance, the United States college graduate unemployment rate was about 4.9% in 2008, and 3.5% in 2018 (TED, 2018). This translates to an overall slight drop of 1.4% from 2008 to 2018. However, the united states college graduates' unemployment rates vary from year to year. The unemployment rates rise significantly from 2008, picks its maximum stretch in 2010, and drops gradually from 2010 to reach its point of minimum in 2018.
From Table 1 above, the unemployment rate was relatively high in 2008 (7.3%) as a result of the financial crisis witnessed in the united states in that period (Amadeo, 2019). The united states unemployment rate was highest in 2009 (9.9%) after the extension of the jobless benefits (Amadeo, 2019). The unemployment rate dropped slightly in 2010 (to 9.3%) following the introduction of the Obama tax cuts (Amadeo, 2019). The unemployment rates continued to drop gradually in the subsequent years due to various events and major government acts that were initiated at the respective times. For example, the end of the Iraq war in 2011 made the unemployment rate drop from 9.3% to 8.5%. The united states recorded the lowest rate of unemployment in 2018 (3.9%) (Amadeo, 2019). This is the period marked by the end of the presidential race and the initiation of the Trump tax cuts.
Further analysis also indicates that there is a close relationship between the rates of unemployment and GPD growth. For example, the united states experienced high unemployment rates in 2008 (7.3%) when the GPD growth was as low as -0.1% because of the financial crisis witnessed within the nation (Amadeo, 2019). The united states experienced the highest unemployment rates in 2009 (9.9%); a time when the country also experienced the lowest GPD growth rate of -2.5% (Amadeo, 2019). In 2010, the nation experienced a drop in the unemployment rate (from 9.9% in 2009 to 9.3% in 2010), and at the same time the nation also recorded a significant improvement in its GPD growth (from -2.5% in 2009 to 2.6% in 2010) following the Obama tax cuts (Amadeo, 2019). Besides, the united states recorded the highest GPD growth rate of 2.9% and the lowest unemployment rate of 3.9% in 2018 after the initiation of Trump tax cuts (Amadeo, 2019).
Also, data analysis shows that the high unemployment rate among the united states college graduates is a vital contributor to the hiking student debts (Swaminathan, 2019). For instance, most of the united states students get their educational, financial funding from loans. The loaning institutions give the students loans with the hope that the students will be able to pay back the loans on completion of their studies, and after they are employed. Unfortunately, a large of college graduates fail to secure a job of their profession on completion of their studies. This means that a large number of college graduates end up opting for self-employment opportunities. For this reason, the high education loaning institutions may not be in a position to track the students’ source of income, and hence fail to get means of forcing the graduates to pay their education loans.
Consequently, most of the college graduates fail to pay back their loans, leading to a soaring of the students' debts. Figure 4 above shows the relationship between college graduates' unemployment rates and the rate of student debts. Relating the data in Figure 4 above and the data recorded in Figure 3 above, one may deduce that the high level of the current united states students' debt is as a result of the current unemployment rates among the united states college graduates. For example, in 2018, the United States college graduate unemployment rate was 3.8% leading to a total student debt of $1.6 trillion (Swaminathan, 2019).
Conclusion and Solution
Based on the data analysis, one may draw various conclusions about this study. First, the rate of unemployment is inversely proportional to the rate of GPD growth. Data analysis has shown that the unemployment rates in the united states decrease with an increase in the GPD growth rates. For instance, the extension in the jobless benefits in 2009 led to a -2.5% GPD growth rate 9.9% unemployment rate (Amadeo, 2019). Also, the initiation of Trump tax cuts in 2018 led to a 2.9% GPD growth rate and hence, a 3.9% unemployment rate (Amadeo, 2019). Secondly, political events have a significant influence on the GPD growth rates, and subsequently, unemployment rates (Odiorne, 1964). Poor politics lead to low GPD growth rates, hence high unemployment rates (Odiorne, 1964).
From this study, data analysis has shown that poor political ideologies led to the extension of jobless benefits in 2009, leading to a -2.5% GPD growth rate and a 9.9% unemployment rate. The right political ideologies of 2018 led to Trump tax cuts resulting in a 2.9% GPD growth rate and a 3.9% unemployment rate. It can also be concluded that unemployment rates among young college graduates are a national issue. There is, therefore, the need to address unemployment rates among young college graduates at the national level before it worsens. Finally, a significant improvement in economic growth may not always translate to a substantial reduction in the unemployment rates. This is because firms may not hire workers until they are satisfied that there is a stable upward trend in economic growth.
From the conclusions drawn in this study, this paper proposes that the best method of mitigating the unemployment rates among young college graduates is through initiating great political ideologies in the united states. This paper has established that politics and leadership are the primary determiners of the GPD growth rate. For instance, the initiation of both Obama tax cuts and Trump tax cuts in 2010 and 2018 respectively led to increased GPD growth rates, and hence reduction in the unemployment rates. Besides, great political ideologies lead to fosters peace and security within the nation. Peace and security attract both domestic and foreign investors with the nation, hence offering substantial job opportunities for the working class. Therefore, since the united states is a democratic nation, all citizens need to be educated on the importance of electing leaders who are capable of demonstrating the best political ideologies to help in addressing the high unemployment rates among young college graduates in the united states.
References
Amadeo, K. (2019). U.S. GDP by Year Compared to Recessions and Events: The Strange Ups and Downs of the U.S. Economy Since 1929. (Online). Retrieved October 1, 2019; from https://www.thebalance.com/us-gdp-by-year-3305543
Amadeo, K. (2019). Unemployment Rate by Year since 1929 Compared to Inflation and GDP : U.S. Unemployment Rate History (Online). Retrieved October 1, 2019; from https://www.thebalance.com/unemployment-rate-by-year-3305506
Bureau of Labor Statistics, U.S. Department of Labor: The Economics Daily. (2018). (Online). Retrieved October 1, 2019; from https://www.bls.gov/opub/ted/2018/unemployment-rate-2-1-percent-for-college-grads-3-9-percent-for-high-school-grads-in-august-2018.htm?view_full
Odiorne, S. (1964). Unemployment as a Political Issue. 13(1): 13-16. Available on https://www.jstor.org/stable/40718879
Pettinger, T. (2019). Definition of Unemployment: Economics Help Blog. (Online). Retrieved from https://www.economicshelp.org/blog/2247/unemployment/definition-of-unemployment/
Swaminathan, A. (2019). Recent College Graduates Face A 'Concerning' Unemployment Trend: "For the first time ever, recent college graduates are more likely unemployed than the base U.S population." (Online). Retrieved October 1, 2019; from https://www.huffpost.com/entry/new-college-graduates-unemployment-rate_l_5d66a635e4b063c341f95140
