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Using Fiscal Policy to Improve Employment.

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Introduction

Nichol Ivanoski Econ. 2301.007 April 26, 2004 Using Fiscal Policy to Improve Employment Thesis Statement: Government spending, a form of fiscal policy should be implemented to help create or reform job training to improve the unemployment rate and thus decreasing government spending on unemployed citizens. There are many unemployed Americans that have given up on searching or training for jobs because they rely heavily on government support. Many of these people would face reality if in fact this support system faded. Maybe some would make it, but what happens to those who have grown accustomed to this "government benefit." The government must either improve or implement a new job training program that would ensure a smoother and more permanent transition back into the labor force. The American labor force consists of 146.7 million people. The number of unemployed persons is 8.4 million and the current unemployment rate in the United States sits at 5.7 percent. Both measures remain below their recent highest unemployment rate in June 2003, but it is still not the ideal percent for this economic giant. The United States is usually content with an unemployment rate that is between four and five percent (Appendix A). The recent increase in this rate has caused a rise in the cost of assistance needed. ...read more.

Middle

The 1963 amendments to the National Defense Education Act included $731 million in appropriations to states and localities maintaining vocational training programs. The Comprehensive Employment and Training Act (CETA), passed in 1973, approved funding for vocational training programs (including stipends for trainees) as well as for public service employment. The bill required that each public service employment program provide participants the opportunity to learn skills useful in the private sector. In 1982, Congress replaced CETA, which was expiring, with the Job Training Partnership Act (JTPA). The new law gave the states more control over how they distributed vocational training funds and ended federal funding for public service employment programs. JTPA training programs are administered by U.S. Department of Labor's Employment and Training Administration.1 It would be beneficial to today's labor force if fiscal policy was implemented, and created a more efficient system for the unemployed. Former policies were a great start, but they need to be updated and improved. It was the right idea to start job training programs, because many unemployed people in America lack the skills needed for certain jobs. This could be because they have not finished school. It could also be that technology is moving fairly quickly that it is hard to keep up with. ...read more.

Conclusion

4.0 3.9 3.9 3.9 2001 4.2 4.2 4.3 4.4 4.3 4.5 4.6 4.9 5.0 5.4 5.6 5.7 2002 5.6 5.7 5.7 5.9 5.8 5.8 5.8 5.7 5.7 5.7 5.9 6.0 2003 5.8 5.9 5.8 6.0 6.1 6.3 6.2 6.1 6.1 6.0 5.9 5.7 2004 5.6 5.6 5.7 Source: "Labor Force Statistics from the Current Population Survey." Bureau of Labor Statistics, U.S. Dept. of Labor. 18 April 2004. <http://data.bls.gov/servlet/SurveyOutputServlet>. Appendix B UI Benefits Information United States CYQ: 2003.1 Quarter Past 12 Months High Value: Qtr Low Value: Qtr Benefits Paid: (000) $11,966,591 $41,780,052 $12,116,798 2003.1 $860,035 1973.3 Initial Claims: 5,740,976 21,083,374 8,229,191 1975.1 2,671,661 1973.2 First Payments: 3,216,696 10,063,747 4,663,186 1975.1 1,074,462 1973.2 Weeks Claimed: 52,690,134 185,152,961 62,573,667 1975.1 18,445,892 1973.3 Weeks Compensated: 47,094,790 164,386,531 54,739,150 1983.1 15,351,045 1973.3 Exhaustions: 1,089,151 4,451,692 1,285,185 1983.1 332,910 1973.4 Exhaustion Rate: 42.9% 42.9% 2003.1 25.8% 1979.2 Average Duration: 16.4 17.5 1983.3 12.4 1975.1 AWBA: $263.07 $259.39 $263.07 2003.1 $52.64 1971.3 As % of AWW: 37.9 Avg. Benefits per First Payment: $4,152 EB and Loan Quarter Past 12 Months Extended Benefits(000): $72,775 $147,988 Outstanding Loan Bal(000): $1,679,161 EB First Payments: 41,553 74,158 Loan per Cov Employee: 13 EB Weeks Claimed: 246,132 530,498 EB Exhaustions: 17,348 37,871 Source: "State Benefits Data - 1st Quarter 2003." Employment and Training Administration, U.S. Dept. of Labor. 18 April 2004. <http://workforcesecurity.doleta.gov/unemploy/content/data_stats/datasum03/1stqtr/benefits.asp>. ...read more.

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