Unemployment in the United States discusses the causes and measures of U.S. unemployment and strategies for reducing it. Job creation and unemployment are affected by factors such as economic conditions, global competition, education, automation, and demographics. These factors can affect the number of workers, the duration of unemployment, and wage levels.
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👉 Unemployment in the United States in the context of American economy
The United States has a highly developed diversified market-oriented mixed economy. It is the world's largest economy by nominal GDP and second largest by purchasing power parity (PPP). As of 2025, it has the world's ninth-highest nominal GDP per capita and eleventh-highest GDP per capita by PPP. According to the World Bank, the U.S. accounted for 14.8% of the global aggregate GDP in 2024 in purchasing power parity terms and 26.2% in nominal terms. The U.S. dollar is the currency most used in international transactions and the world's foremost reserve currency, backed by a large U.S. treasuries market, its role as the reference standard for the petrodollar system, and its linked eurodollar. Several countries use it as their official currency and in others it is the de facto currency. Since the end of World War II, the economy has achieved relatively steady growth, low unemployment and inflation, and rapid advances in technology.
The American economy is fueled by high productivity, well-developed transportation infrastructure, and extensive natural resources. Americans have the sixth highest average household and employee income among OECD member states. In 2021, they had the highest median household income among OECD countries, although the country also had one of the world's highest income inequalities among the developed countries. The largest U.S. trading partners are Mexico, Canada, China, Japan, Germany, South Korea, the United Kingdom, Taiwan, India, and Vietnam. The U.S. is the world's largest importer and second-largest exporter. It has free trade agreements with several countries, including Canada and Mexico (through the USMCA), Australia, South Korea, Israel, and several others that are in effect or under negotiation. The U.S. has a highly flexible labor market, where the industry adheres to a hire-and-fire policy, and job security is relatively low. Among OECD nations, the U.S. has a highly efficient social security system; social expenditure stood at roughly 30% of GDP.
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Unemployment in the United States in the context of Social Security Act
The Social Security Act of 1935 is a law enacted by the 74th United States Congress and signed into law by U.S. President Franklin D. Roosevelt on August 14, 1935. The law created the Social Security program as well as insurance against unemployment. The law was part of Roosevelt's New Deal domestic program.
By 1930, the United States was one of the few industrialized countries without any national social security system. Amid the Great Depression, the physician Francis Townsend galvanized support behind a proposal to issue direct payments to older people. Responding to that movement, Roosevelt organized a committee led by Secretary of Labor Frances Perkins to develop a major social welfare program proposal. Roosevelt presented the plan in early 1935 and signed the Social Security Act into law on August 14, 1935. The Supreme Court upheld the act in two major cases decided in 1937.