Unemployment: Unemployment and Small Businesses Essay

Submitted By castro2193
Words: 895
Pages: 4

Ivan Castro
4/21/14
9 AM
Mr.Miller
Essay 4, Draft 3

A report from the economic news report had a house hold survey states “In March, the number of unemployed persons was essentially unchanged at 10.5 million, and the unemployment rate held at 6.7 percent. Both measures have shown little movement since December 2013. Over the year, the number of unemployed persons and the unemployment rate were down by 1.2 million and 0.8 percentage point, respectively.” The Bureau Labor of Statistics states that in 2012, the unemployment rate has increased. This problem is just not occurring in one place, it is a nationwide issue. Many individuals have been affected due to this; in addition, many individuals are suffering. A few of these solutions may help reduce the unemployment rate: creating or saving small businesses, reimburse some part of minimum wage paid to American workers, crack down on immigration. By saving small businesses they can help reduce unemployment rate, giving more jobs to people who really need them. Economists, Ben Shalom Bernanke, and organizations like the Small Business Administration have repeatedly made the point that small businesses are and have been the primary engine of job creation in America. Having said these saving small businesses can help unemployment greatly. Companies with work forces under 500 create nearly half of private non-farm GDP. Large companies have had easy access to capital markets even with the depressed economy. Lingberry states "Give employees the benefits they value, and they'll be more satisfied, miss fewer workdays, be less likely to quit, and have higher commitment to meeting the company's goals"(lingberry 33) They have been able to take advantage of historically low-interest rates to stockpile capital. By contrast, banks have been reluctant to fund small operations that have little or no cash and uncertain prospects and usually a relatively small number of customers. The idea that the federal government should shoulder some of the risk of small business loans has been proposed several times, but no legislation has been passed to support small business bank aid on a wide-scale basis. Without a well-funded small business sector, unemployment is unlikely to improve. The part of the work force that usually has no savings and no visible means of withstanding a long period of unemployment is the lower class, those who live at or below the poverty level. An article of the unemployment statistics theory was that “Raising the minimum wage from 7.25 and hour to 8.50 an hour would inject an amazing 9.5 billion extra in spending power helping the economy out greatly. These workers are often paid only the minimum wage and receive no or the most modest benefits. The government could choose to reimburse some part of the minimum wage paid to each American who is compensated at this level. This would give many workers who are among the lowest paid in the country a chance to keep their jobs. It would allow many modest-sized businesses that pay people the minimum wage an opportunity to avoid layoffs or find capital to bring on new people. There is an extent to which the argument that undocumented workers from abroad take American jobs is reasonable. “In 2012, there were 25.0 million foreign-born persons in the US labor work force, compromising 16.1 percent of the total ”(BLS). The truth of that is hard to refute. It is equally hard to say that immigrants, even those with illegal status, should be sent back to the nations they came from immediately and without any provision for their economic futures. The immigration debate has become more violent as the recession has…