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Subject area is on "Unemployment at a national level" Using the Phillips Curve Theory using the graph for the Phillips curve Including a literature review, a contradictory view, and areas for future research

What is unemployment at the national level? It is people who are actively looking for a job and can't find one, people who are of legal age and are able to work. So children retired, people who were looking for work and give up, or people have a low wage job who are looking for a better job are not considered as part of the unemployment rate. Is it possible to ever have a zero percent unemployment rate, or will there always be more than a zero percent unemployment rate? Even when we look at science fiction such as Star Trek, their basic needs are met, such as food, shelter, and clothes, but their unemployment rate is not at zero but at 1%. We notice that the Phillips Curve shows us that a high unemployment rate creates low inflation, and the inverse is the same low unemployment rate creates high inflation

Unemployment can mean different types. Knowing who is employed, the Bureau of Labor Statistics (BLS), determines employed personal are "All persons who did any work for pay or profit during the survey reference week. All persons who did at least 15 hours of unpaid work in a family-operated enterprise. All persons who were temporarily absent from their regular jobs because of illness, vacation, bad weather, industrial dispute, or various personal reasons." (Arnold 2018) to still calculate the civilian labor force, we now have to look into the unemployed personal

The unemployed personal that are tracked the BLS is the Job loser, the ones who were fired or laid off, which is the most common. The job leavers are employed personal who quite to find a better position. Reentrants are personal who were once part of the labor force and returning; these could be people who decided to go back to school or stay at home parents. Finally, the New entrants, are new to the civilian labor force and who have never worked a full- The Effects of Unemployment 3 time position for more than two weeks. All are counted as part of the Unemployed. When added with the employed, they create the Civilian labor force, and now we are able to measure the unemployment rate

Within the recent months of 2020, we can see the Phillips Curve working like it is intended. From January to February, the unemployment rate was between 2.5% to 5%. Then the pandemic started to happen, and business started to close down. The country is placed in a stay at home orders; the unemployment rate reaches close to 15%. "Labor force participation=Out put per capitaLabor productivity. It follows that at both the sectoral and macroeconomic levels, the participation rate rises if growth in output per capita exceeds labor productivity increases. This decomposition can be used to analyze job growth (positive or negative) over time" (Taylor, 2020)"

With unemployment rising, we start seeing the inflation rate to slow down, creating that inverse that the Phillips Curve theory predicts. "Policy makers concluded from the Phillips curve that simultaneously lowering wage inflation and unemployment was impossible; they could do only The Effects of Unemployment 4 one or the other. So the combination of low wage inflation and low unemployment was unlikely. This was the bad news. The good news was that rising unemployment and rising wage inflation did not go together either. Thus, the combination of high unemployment and high wage inflation was also unlikely." (Arnold 2018) This is all due to the fact that with a high unemployment rate, there is no spending. If there are is no spending, the economy is not growing as well.

The effect on this on the National level from the immediate effects of unemployment is the increase in claims. "The American UI system was created in 1935 in the wake of the Great Depression and was intended as a partial replacement of income for the unemployed and as a tool to stabilize the economy and prevent a breakdown of labor standards" (Luigjes, 2019) These standards where created so that the unemployment rate increase and keep inflation high. They are five main reasons for the federal stat UI system one is to provide temporary [artial wages for people who were involuntary unemployed, second to prevent spreading of employees during layoffs, third to promote the return of work, forth limit the time business have during downturns of combine purchasing power, and lastly the establish employment through experience rating. But in other countries such as Nigeria, their economy has suffered. "Being in employment does not always guarantee a decent living, and youth continue to exhibit larger working poverty rates than adults. Among young workers in low- and middle-income countries, more than one in three were living in extreme or moderate poverty in 2018. Many youths in developed countries are also living in poverty despite having a job." (UN 2019) Even though they might have a job, the The Effects of Unemployment 5 rate of inflation is so high at around 12.4%, and it's hard to keep up with its economy. Even with an increase in wages, it still not enough to keep up with the country's inflation. How is it possible that Nigeria has a high unemployment rate and a high inflation rate. It was said that inflation and unemployment could not be either low or high, but in Nigeria, the country has a high unemployment rate and high inflation. In Nigeria, high inflation and unemployment rates have coexisted overtime. Recently, it was announced that Nigeria has fallen into a recession since the country recorded a negative growth rate in 2016. Coupled with the double-digit inflation rate, one can safely say that Nigeria is experiencing stagflation, which is a condition that was reported a few years ago...High inflation and unemployment rates have the tendency to negatively impact the economy, including reducing the welfare and happiness of the people" (Abu, 2019) It is possible for inflation and unemployment to be high it is called stagflation, it is an unlikely occurrence when both inflation and unemployment are high. The country's stagnation produces high unemployment due to the GDP growth reversing; instead, this is what causes the inverse on the Phillips curve is a negative GDP.

It is possible for unemployment to drop but not likely to drop to zero, the data shows that even with a good economy, there is still needs to have some type of economic inflation. With the increase in inflation, the lower unemployment, and the higher GDP growth there is. With in the United States, the economy is having a slow growth. The economic structure of the United States is at a contraction state, and soon will be back at a recovery state in the business cycle. The more we start seeing in the second quarter, the United States will begin to see a decline once again in unemployment and an increase in inflation. The Phillips Curve can start predicting as more and more business we start seeing many more unemployed to receive jobs once again and more spending on products and goods, which increases inflation.

references

Abu, N. (2019). Inflation and unemployment trade-off: A re-examination of the Phillips curve and its stability in nigeria. Contemporary Economics, 13(1), 21-34. doi:10.5709/ce.1897-9254.296

Alam, M. R., & Gilbert, S. D. (2019). Importance of real and nominal shocks in us macroeconomic and exchange rate fluctuations. Journal of Developing Areas, 53(4), 129- 138

Arnold, R. A. (2018). Economics (13th ed.). Cengage Learning. FRED Economic Data. (2020, July 10). Fred Economic Data. https://fred.stlouisfed.org/series/LRUN64TTUSM156S

Gadhia, L. J. (2020, April 29). Op-Ed: Britain needs an economic model to guide the lifting of the coronavirus lockdown. https://www.cnbc.com/2020/04/29/coronavirus-ukbritain-needs-an-economic-model-for-lockdown-easing.html

Nigeria Inflation Rate | 1996-2020 Data | 2021-2022 Forecast | Calendar | Historical. (n.d.). Trade Economics. Retrieved July 11, 2020, from https://tradingeconomics.com/nigeria/inflation-cpi

Luigjes, C., Fischer, G., & Vandenbroucke, F. (2019). The US unemployment insurance scheme: A model for the EU? Intereconomics, 54(5), 314-318. doi:10.1007/s10272-019- 0844-x

O Leary, C. J., & Barnow, B. S. (2016). Lessons from the american federal-state unemployment insurance system for a european unemployment benefits system. (). Kalamazoo, MI: W.E. Upjohn Institute for Employment Research. doi:10.17848/wp16- 264

Taylor, L., & mer, . (2020). Where do profits and jobs come from? employment and distribution in the US economy. Review of Social Economy: Social Coordination, 78(1), 98-117. doi:10.1080/00346764.2019.1672883

Tarpley, L. G. (2020, April 8). Unemployment insurance provides money for people who lost their jobs, and currently anyone who qualifies gets an extra $600 a week. https://www.nytimes.com/2020/03/17/your-money/unemployment-insurancecoronavirus.html