Impact of Unemployment in Economics

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Introduction
Unemployment is a huge challenge facing South Africa. There are many people who are looking for jobs but cannot find them mostly because of the slow economic growth rate in the country. South Africa faces structural unemployment where people loose their jobs due to introduction of new technology or relocation of the company, these economic disruptions have resulted in high crime rates, low production and income as well as lost human capital. The NDP has been put in place to solve the problem of unemployment, and if supported well there can be job creation because they promise on expanding work programme, reduce costs of doing business and support entrepreneurship. Body

South Africa faces the greatest challenge of a very high unemployment rate, which is highly influenced by the slow growth of the country hence resulting in slow employment growth as well (Parkin et al, 2010:449). Unemployment has been defined in two forms: a narrow definition and a broad definition. The narrow definition of unemployment is the official definition of unemployment and it states that an unemployed person is a person who is willing to work and is making an effort to find a job, Parkin et al, states that “To be counted as unemployed, a person must be available to work…must want to work and have made specific efforts to find a job or taken steps to start a business” (Parkin et al, 2010:495), but the broad definition of unemployment also includes the discouraged workers because they are people who are willing to work but have not been making an effort to find a job in the previous month mostly because they cannot find the jobs (Parkin et al, 2010:495). The business cycle of a country also influences the employment and unemployment rates, for example during a recession period there are high unemployment rate and during expansion there are lower unemployment rates (Lipsey et al, 1999:726). Unemployment is classified into three types; i) Frictional, ii) Structural, iii)...
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