Unemployment Persuasive Essay Example

off when their jobs are replaced by more cost-effective technology. Additionally, various factors have contributed to the rise in unemployment rates in the United States starting from 2007.

The financial crisis in the United States, caused by excessive credit card usage, has led to higher unemployment rates. The country's economy relies on its GDP, which is determined by consumer spending. In recent years, American consumers have increasingly opted for credit card purchases, resulting in a significant amount of goods being bought on credit. According to a May 2010 report from the Federal Reserve, consumer debt reached $2.5 trillion with 576.4 million credit cards in circulation as of March that year. This widespread use of credit negatively impacts the economy and has resulted in substantial debt and bankruptcy among lenders. Consequently, this crisis has had far-reaching effects across various sectors, including an increase in bankruptcies and widespread job cuts and layoffs. Additionally contributing to high unemployment rates in the United States is the real estate bubble crisis.

The severe crisis in the banking industry and lending sector resulted in significant losses. This crisis was triggered by various issues such as refinancing, second mortgages, irresponsible lending practices, and unnecessary property valuations. The combination of defaulted mortgage loans and a limited number of buyers in the real estate market led to foreclosed properties being sold at lower prices. Moreover, banks incurred extra costs due to short sale procedures. As a result, banks faced further strain and numerous major financial institutions filed for bankruptcy. One notable example is Lehman Brothers' bankruptcy filing, which resulted in the loss of $600 billion worth of assets.

The Lehman Brothers and its associates

experienced major losses and significant liquidity issues. Numerous corporations and companies associated with the bank declared bankruptcy and initiated lay-offs. This crisis is also known as the subprime mortgage crisis of the United States. Besides banks and lenders, the automotive industry was severely affected. Many banks and lenders providing car and auto loans suffered from the mortgage crisis as well.

Due to the financial crisis, individuals faced challenges in securing loans for purchasing new vehicles. This led to a decline in automotive production and subsequent lay-offs. The unstable economy of the country also affected international trade, foreign exchange, and oil trade. The decrease in fuel trade resulted in higher fuel costs, which further impacted the decline in automotive sales. This downturn not only affected direct automotive companies but also other businesses associated with the industry.