How changes in economy influences career choices among the citizens
Career is one of the many choices that individuals are faced with in the course of their lives. While factors such as educational attainment, parental influence, personal interests and financial prospects provide a greater bearing in swaying one’s decision, macroeconomic factors equally play a significant role in the choice one makes. Dynamism of these macroeconomic components make career choices seasonal as well as permanent based on the magnitude of their influence to the prevailing economic circumstances. These factors involve the GDP growth rate, the business cycle, unemployment, inflation, fiscal policy and level of unemployment, monetary policy, interest rates and demographics. Jenny’s career choice will involve a combination of all these factors wrapped up into one.
Changes in the economy and the resulting job market, influences once choice of a career. Economic changes are synonymous with changes in the GDP. A rise in the rate of GDP implies that the economy has expanded and future prospects of getting a job in whichever field is high. Basically, a better performing economy characterized by the high rate of GDP and better living standards has a lesser bearing in the career choice. This is backed by the fact that there are better job incentives in most of the careers if not all. Medicine or any other course will be a good choice in such circumstances for Jenny. A lower rate of GDP implies that the economy is performing dismally. Certain careers will remain vital despite the harsh economic situations. Medicine, is one that she should make her decision on. The demand for medical practitioners will still be high despite these circumstances and jenny should pursue it. Courses such as medicine are able to withstand both the harsh and smooth economic times. It’s therefore advisable that choices involving such course are relied on. Jenny’s long term career choice will be motivated by how crucial and central that course is in the pursuit of economic growth particularly highlighted by the growth rate in GDP.
Unemployment, inflation and changes in the business cycles are significant in making career choices. Firstly, the level of an employment prevalent in a certain career will determine individual choices in whether or not to pursue it. Unemployment may vary from one career to another and subsequently have a huge impact on its pursuance. Careers that are marred with high rates of unemployment will witness low number of people pursuing them. Based on the employment and unemployment statistics posted by the American Medical Association (AMA), it puts medicine as the sole career with zero unemployment rate. This in effect means that based on data, Jenny’s decision to pursue medicine will be sustainable both in the short term and the long term. Inflation; the level of inflation determines ones career choice by virtue of the increasing price levels of consumer goods. The increase of food prices from 2.5% to 3.5% from in 2013 according to the Bureau of the Economic Analysis contributed to a shift in the career choices. People opted for careers that pay more. Medicine, law and engineering flooded. Jenny should stick to medicine because it is able to pay her enough to withstand the increasing prices in the basic commodities. A macroeconomic component such as inflation is primary for the career choice. It is both sustainable in the short term and long term despite the unforeseen increase in prices. Business cycles; the relative expansion and contraction of economic activities have a greater bearing on the career choices. A slump in an economy is characterized by unemployment which stems from the fact that many careers are not able to live up to the demands of an economy at such times. Consistent with the GDP performance, a slump in an economy will tend to put pressure on traditional careers like medicine and engineering as well as law to meet the strict demands of an economy at such time. It therefore goes without saying that such courses will be highly pursued during tough economic times. During the boom, the economy is performing better and career choices made will reflect efforts made to rectify and reevaluate the economy. Such careers such as economics, statistics will be highly preferred to normalize the situation
Monetary policies involves Federal reserve controlling the private and public sectors by regulating federal funds rate that takes into account lending institutions charge one another for short loans. This scenario creates borrowing rates for the consumers and producers hence establishing demand. These policies could either be expansionary or contractionary. Expansionary policies increase money supply and hence increasing economic growth which creates job opportunities hence expanding on the career choices. With job prospects on the cards, careers will be a lot more valuable. Easier career choices because of the job availability will result during this period unlike during contractionary policies. A wide range of careers will provide better choices because of the good economic performance. Both expansionary and contractionary policies will be effective in choosing medicine while other careers will still be better choice during expansionary policies. Interest rates; interest rates have a profound effect on spending. Lower interest rates will necessitate more borrowing to make more purchases. This gives consumers more money to spend and spread all throughout the economy. Businesses benefit from this as it increase disposable income. Opportunities open up in an economy as a result of this. Effectively, career paths are launched on this platform. Career choices made during this period are more likely to succeed than in the times of higher interest rates. Banking careers will be successful during this time and so this puts Jenny in a situation that her choice in medicine wouldn’t be bad either.
Fiscal policy and unemployment; the interaction between unemployment and fiscal policy develops a dynamic economic model in which unemployment can rise but still regulated by tax cuts and increased public spending. Expansionary fiscal policy will increase aggregate demand which eventually causes a higher output. This leads to the creation of jobs. Just like the monetary policies, fiscal policies require the wholesome public spending to offset unemployment. Significance of career choices is heightened by successful built on government spending since it opens up different sectors of an economy providing a wide range of opportunities. Career choice will be based on what policies the government will take. Choices will be more accommodating when tax cuts are effected. Medicine will provide a better proposition to take during such government cut taxes because it increases individuals spending through availing more disposable income. The rate of an employment in an economy directly affects career choices. Firstly, career choices are made based on the existing absorption by the job market. Careers that involve prompt absorption into the labor force are generally preferred. This eventually brings forth the issue of employment and unemployment. With the American Medical Association stating that medicine is the solely career that doesn’t involve a single unemployed person, Jenny’s desire to pursue it becomes more than justified based on the unemployment index. Careers will therefore be decided on based on their ease of getting employed. The long term viability of the career chosen will be guided by economic performance that is responsible for reducing unemployment.
Demographics; the composition of the population in terms of factors like age and educational attainment. Composition of the population is crucial in establishing career path that an individual will choose to follow. This will also involve the number of people pursuing that particular course. Demographics pose a serious threat to this because of the exploding population. Dynamism of the population has also dawned on the career paths because it is common now that some careers that were long held with respect and awe have been phased out by the demographical changes. The changing cultural orientations have necessitated this a great deal. This has made it more difficult to tell the sustainability of a career in the near future. Making a choice on a certain career will demand all these factors come into play. The number of people pursuing that particular career is significant since it helps to foresee the situation in the near future. In line with the demographics, career choices such as Medicine are traditionally viable and therefore pursuing it will be fulfilling.
There is a thin line separating the activities that lead to economic boom and economic slump. The former is significant in opening up various previously untapped areas of the economy as well as improving on the existing ones. This will effectively create career paths and make it easier to make a choice when deciding on a career to pursue and its successful perspective as revealed in the analysis. To realize this, the following activities should be recommended:-
The interest rates should be lower so as to increase the consumer purchasing power. This will bring about an increase in the consumer borrowing to make more purchases. Consumers get a lot of money to spend in the economy. If consumer spending goes down, there will be less demand for products and services and hence prices will not rise rapidly. This is one of the safest ways to inject economic growth. With this comes the opening up of the economy, job opportunities are created and sustained through constant variation of the interest rates. Career opportunities will be generated from it. Enhancing demographics opportunity through improvement of productivity of workers, higher savings and better education attainment will go a long way in installing a benchmark for career development opportunities. It is through this that a higher working population can be harnessed. Putting more of the working-age population to work to reap greeter benefits. In line with demographics, diversity of the population needs to be addressed in terms of enough awareness to learners seeking to pursue certain courses since the traditional view that certain careers guarantee satisfaction creates labor shortages in other fields.
1. Bob McTeer (2013), the role of foreign trade on GDP, Forbes
2. Grace Cheng (2016), why interest rates are so important, GET.com
3. Michael Schmidt (2016), a look into the fiscal and monetary policies, Investopedia
4. Ramaa Vasudevan (2016) Dollars and sense, Real world economics
5. Ron Crouch (2012), the changing demographics of the United States and their schools, CENTER FOR PUBLIC EDUCATION