Problem Of Unemployment Essay

Unemployment

Unemployment is when a person is actively searching for employment but is unable to find work. Unemployment is sometimes used as a measure of the health of the economy. They often call that the unemployment rate. This is the number of unemployed people divided by the total number of people living in that country.

Employment

The officially registered working population. So everyone who works at least 12 hours a week in the formal sector and is between the age of 15 and 65. This is the employed people divided by the total number of people living in that country.

The result of unemployment

The consequences are first decrease of costumer spending. People who are unemployed can buy less and consume less (because usually a social-security

There will always be some frictional unemployment in an economy because it isn’t easy to find a job you like and want to work for a long time.

~Voluntary Unemployment. – This is when people choose to stay unemployed instead of taking a job which is available. Frictional unemployment can also be voluntary unemployment when they choose to wait until they find a better job.

Here are 3 possibilities to solve structural unemployment:

1

By training of the working population increases in labour productivity, new products and new markets are could be developed.

2

By starting doing things in a different way the total production costs can be decreased. Then the international competitive position could be better, and then the sales to labour could increase. Also by improving the products can it increase. In both situations the companies have to take the initiative themselves but the government can give subsidies too.

3

To further the labour motivity, the government can choose to make the moving costs and the transport costs deductible. Companies can pay those costs by their own for example.

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