Unemployment Benefits

Economic Policies


The following paper will provide an analytic view on two articles: The Gujarat Model and Unemployment, both found in an online magazine The Economist.


The article Unemployment written by Atlanta gives its audience an insight into the huge problem of unemployment that is facing thousands of Americans. The countrys policies are not adept enough to improve the livelihood of its citizens and solve problems caused by the unemployment. The countrys policies do not seem to be alleviating the situation even with the continued efforts by both the Republicans and Democrats to try salvage the situation. It was not a sound judgment for Americas policy makers to eradicate the extended unemployment-insurance benefits. Policy makers did not seem to consider the Americans interests since the solution implied the short term alleviation to its budgetary constraints (Atlanta 1). Enacting of such crude policies is more likely to create a situation where thousands of Americans become de-motivated and unsupportive of their governments system.

Even though some people would argue that reducing or completely abolishing the extended unemployment-insurance benefits would lower the rate of unemployment, this is absolutely not guaranteed. Atlantas article Unemployment gives evidence of unemployment levels remaining higher at 7% in late 2013 as compared to the 5% level when the recession began in 2007. It is worth noting that the extended unemployment-insurance benefits were still in existence before the recession hit. In the economy, millions of dollars that trickle down to the citizens of a country ultimately find their way back into circulation through supply and demand of consumer goods (Atlanta 1). Eliminating such benefits only tends to lower the purchasing power of consumers hence downgrading the overall performance of the economy.

Evidence suggests that cutting off the benefits extended to the unemployed has had the negative effect of increasing the number of unemployed citizens. Analysts also proves that todays industry policies are a stark contrast to how industries operated long ago (Atlanta 2). Decades ago, industries used temporary lay-offs and later recalled its workers after the economy stabilized. However, today, industries employ permanent lay-offs with no option of rehiring its ex-workers. This suggests a negative change in the economic status of a country since it means that the number of long-time unemployed workers will rise to unprecedented levels. The result is an unfavorable economic environment for even investors since labor is more de-motivated and demoralized.

Sound policies should be at the core of economic changes especially in taking care of the unemployed. Countries should create ways of providing the unemployed with skills that would help them contribute to the overall growth of the economy. Such skills can be acquired through job training, seminars and workshops on topics such as investment and entrepreneurship. When employees leave their salaried 9-5 jobs, they should be acquired enough business skills to integrate them into the economic cycle. This would foster financial independence so that they would not have to rely solely on unemployment benefits to sustain their lives. In the end, their participation in generating income away from their jobs would bolster the overall economy of the country.

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The Gujarat Model

This second article by Ahmedabad is about the Indias Economy in relation to The Gujarat Model, a world-renown model that helped shape Indias prosperity. The following discussion briefly explains how Modi-nomics was forged in one of Indias most friendly business state. Mr. Modi Indias prime minister is well known in the country and highly honored. When one enters one of the big and friendly towns, he/she probably meets big billboards with the pictures depicting Mr. Modi. While serving as the chief minister in this region, he set up friendly relationships between the neighboring countries, and thus, India have gained many benefits for being in friendly relationships with others (Ahmedabad, 1).

An upcoming event where Mr. Modi will give a speech will be visited by more than 125 dignitaries from different countries. It is a big affair called the Gujarat Summit 2015. Over the years, it keeps on growing and becomes richer every day. It has a rising GDP and availability of jobs for the industrial unemployed people. It has developed quickly than India itself. Mr Modis influence is so great that when he vied for leadership, Indians readily voted for him and wanted him because of his good leadership qualities to take India to the heights that Gujarat has reached. People believe that he can well serve them because he had started his career in the business world by working in the textile industry; thus, he knows how to run a business successfully improve the economy of India (Ahmedabad, 2).

Indias rainfall is not reliable, which makes its citizens engage in commerce due to the geographical and climate conditions. Due to such a disadvantage, it was wise step for India to look for alternative ways of sustaining its economy. The presence of a long coastline enhanced Indias trade and, in this case, international trade. Nearly a quarter of Indias exports and imports pass through the ports. When Mr. Modi was in watch over Gujarati, the GDP rose drastically from the year 2001 to 2012 though Mr. Modi cannot claim all the credit for the growth in GDP. Other states in India also did well, but achieving business success in India is a challenging goal. At first, Mr. Modi aimed at alleviating poverty. Initially, many states lacked electricity, but Mr. Modi ensured that even the rural areas had access to electricity, and currently, there is no house without electricity (Ahmedabad, 3).

Also, water supply is established, and the population has access to safe domestic water. Due to the continuous emphasis on infrastructure, there has been the presence of land to open up industries such as Tata motors, which was the first to set up a vehicle assembly in the country. Other factories such as Ford have followed suit. India ranks behind in the World Bank ranking of growing business countries, but Gujaratti keeps on growing and factories spring up very often because permits and licenses are issued quickly, without delays. It was very wise of him cut corruption first; Mr. Modi incorporated IT into governance. Introduction of the e-governance and the provision of services to the civil servants helped curb corruption among government leaders (Ahmedabad, 2).

Alliances and foresight are the key ingredients to the sustenance of great economies. Mr. Modi recognized these all well as evidenced by his focus on infrastructure and attracting of investors to his country. Implementation of IT in the governance of the country made him gain recognition among other world leaders who have changed their countries (Ahmedabad, 3).

The leadership of Mr. Modi led to the creation of the term The Gujaratti model, and his tactics to make decisions for the success of his state made him widely known. Leaders from other countries, especially developing nations, need to emulate the foresight of Mr. Modi and push for policies that would lead to the rise of the economic state of their countries.

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