Causes of Unemployment Unemployment refers to a situation where a person of working age is not able to find work but is willing and able to be employed. Unemployment often occurs, even within a healthy economy. Millions of people across the world are willing and able to work but are unable to find unemployment in order to sustain their needs. This essay will examine the three major causes of unemployment namely recession, the lack of necessary skills, and poverty. One of the major causes of unemployment is recession.
This data collection should allow this study to acquire an acceptable level of trustworthiness, even when taking into considerations some limitations that may occur. Section 1: Introduction Introduction Unemployment as an economic problem exists in each countries and it is often a measure of the health of the economy. It is known as waste of scarce economic resources and as a result it decreases the future growth potential of the country’s economy (Riley, 2005). It is essential to understand the factors which causes the unemployment and its relation and impacts to other economic issues. For instance, of the causes are considered the extreme unemployment benefits, excessive minimum wage and hiring cost, too high real wages level, the disparity between the unemployed labour and job offers on the market in terms of skills and many others reasons (Bell, 2000).
First of all, the country is in a huge debt and does not have any revenue to use for government spending. They need to ask European Union (EU) to borrow money, but they lost their confidence among the countries, so no one is willing to lend. Secondly, those policies that to address unemployment problem are only effective in the short term to maintain inflation and increase employment rate. However, it will result in a recession if these policies are continuously used. Thus, in the long term, the government should attempt more on interventionist supply side policies such as investment in human capital, new technology, infrastructure and industrial policies.
An individual may be frictionally unemployed because of the search time between people searching for desirable jobs and businesses looking for desirable workers. Understandably, some people may not take their job offer and similarly, businesses may not hire their first interviewee. Economists believe that some frictional unemployment will always be present in economy where people are constantly losing or leaving their jobs. Sometimes, people can be structurally unemployed because they lack the skills needed to perform a particular job. There might also be a mismatch between jobs available and skills of the unemployed.
Frictional unemployment Frictional unemployment is transitional unemployment due to people switching between jobs, either because they have been made redundant or are looking for new employment. It may also be called ‘search unemployment’ as it relates to the time taken to search for new job. Frictional unemployment
Educated unemployment or underemployment is due to a mismatch between the aspirations of graduates. To have a higher position and higher salary, but the quantity of student is getting higher, it will cause unemployment. The secondary effect of this is that the days when having a degree alone would get you a job over. Record number of college applicants across the nation, resulting in more college grads, and thus, more competition for the limited number of jobs available on the market. Graduate unemployment is unemployment among people with an academic degree.
The unemployment rate is rising every day and the something needs to be done to stop this. Many youth are unemployed because they have just come from high school and they do not have enough work experience to get a job. Adults are more likely to be unemployed because of physical and mental health challenges. Adults also tend to be unemployed because of cyclical, structural and frictional unemployment. Unemployment also goes into hand with homelessness and panhandling, because there is not enough jobs people are ending up homeless and looking for other ways to get money.
If it is caused by the time it takes to find a new job or a graduate student looking for his first position, then it is called frictional unemployment. The second and more harmful unemployment type is the cyclical one which is induced when the "overall demand for goods and services in an economy cannot support full employment" like in a case
A low level of unemployment is one of the main macroeconomic goals of every country. This is because a low unemployment rate is a sign of improved health of an economy. Unemployment (or joblessness) is defined as people of working age who are without work, available for work and actively seeking employment . Unemployment rate is the number of people who are unemployed expressed as a percentage of the total labour force . Statistically, the number of unemployed people in 18-member Eurozone drop for about 22, 000 in March when compared to February.
The first problem that causes unemployment is seasons, in a farmer’s case; they’re unemployed all year, except on time of good harvest. Moreover, in a teacher’s case, a teacher is unemployed during the summer vacation. It leads to poverty because there’s no stable income. In addition, being unemployed leads to lack of stable income which causes poverty. Nearly 33% of households where no-one is at work are at risk of poverty while the rate for households where two people are working is just 5% (EAPN).