Unemployment refers to an economic condition in which individuals actively look for jobs and remain jobless. According to Bureau of Labor statistics, California has the second highest unemployment rate in the nation. “It has hit the highest point in nearly 70 years starkly underscoring how the nation’s incipient economic recovery continues to elude millions of Americans looking for work” (Jacobs, 2012). The rate of unemployment is 12.4 percent, 3% higher than the national rate. It is estimated that more than 2.3 million Californians are unemployed.

There are various reasons that have contributed to the highest rate of unemployment. One of them is economic recession. California has never come out of recession. If things go terrible on a national level, they become tragic in the Golden State. It has affected all the financing companies, which in turn made them cut off their expenses in order to increase their income by decreasing their employees due to many workers who were laid off their jobs (Rugaber, 2011). Many companies have given more work to the existing employees and delayed hiring new employees. California’s recession was also caused by a large cyclical downturn in the construction industry with its contribution coming from a large downturn in foreign trade related to the worldwide recession (Tucker, 2008). Another reason that has led to high unemployment is the steep declines in construction spending leading to more people being unemployed.

It is important to study the problem of unemployment so that one can plan for the future by starting own business in order to generate his /her own income and become self-employed. The methods one should use to collect data are direct observation, questionnaires and interviews.