Thursday, 12 March 2009

Unemployment

Unemployment occurs when a person is available to work and currently seeking work, but the person is without work.
What are the causes of unemployment?
Insufficient demand, because if the demand of goods is lower, the industry do not want recruit more people, also with the demand decrease , the supply will go down, and they do not need more labour because they may do not have enough money to pay the wages to their labour. For example the recession and reduce the inflation.
If a company need new skills for their new technologies, they may want to fire some workers who do not have the new skills.
The products of the company is not attractive to people, and also they do not have finance to produce a new products, they company face to bankrupt. People who work in this company will lose their job.
At a period time , the demand of a products of a company decrease. The company will redundancy .
Etc
From above we can see there are some types of unemployment:
Frictional unemployment
It means between two jobs, like change a job to another job.
Classical unemployment
when real wages for a job are set above the market-clearing level.
Structural unemployment
a mismatch between jobs offered by employers and potential workers..
Cyclical unemployment
when there is not enough aggregate demand in the economy.

1 comment:

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