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Unemployment: An Economic Condition

By sansad Dec 22, 2010 1525 Words
Definition
An economic condition marked by the fact that individuals actively seeking jobs remain unhired. Unemployment is expressed as a percentage of the total available work force. The level of unemployment varies with economic conditions and other circumstances.

Unemployment describes the state of a worker who is able and willing to take work but cannot find it. As indicated by the unemployment rate and other yardsticks, unemployment is an important measure of the economy's strength. A high unemployment rate generally indicates an economy in recession with few job opportunities, while a low unemployment rate points to an economy running at or near full throttle. A low unemployment rate has its downside for stock prices, however: it may be a harbinger of higher interest rates that will slow both an overheated economy and the rise in equity values. In recent years, there's been much controversy over what the true level of U.S. unemployment is. Some economists have relied more on the government's "establishment survey data," which emphasizes the number of new jobs, rather than "household survey data," which is used to compute the headline unemployment rate. Moreover, new technologies and lifestyle changes, which are increasing the number of temporary, contract, and self-employed workers, are making it more difficult to define what unemployment is.

Economy of an individual is at the utmost priority of every democratic as well as welfare state. Since the dawn of human history, individual needs have been prioritized by every human being. These individual needs can be met by proper sources of employment. After the transformation of the world from a feudal to an industrial society, the needs of an individual have risen sharply, giving due importance to finance.In Pakistan, due to gigantic rise in population, individual finances have been disturbed a lot. This is because of rising unemployment. The major cause of unemployment in Pakistan are following.

The first cause of unemployment or joblessness in Pakistan is worsening law and order situation. Owing to this negative social phenomenon, foreign direct investment is sliding down to the bottom. According to the economic survey of Pakistan, in the current decade FDI was minimum last year. Also investors are loosing confidence in the political and economic system of the country therefore they are reluctant to invest in any new business venture. Resultantly, new jobs are not generating while the job seekers are rising continuously in the country. Secondly, Agriculture is account for the maximum job provision in the country. Agriculture sector is facing severe challenges of water shortage, climatic changes and technological backwardness in recent years. These factors have hit the per acre yield negatively which caused loosing of jobs of several people. In 2009-10, agriculture showed a growth of only 2% against the target of 3.8% while nearly 62% of Pakistan population is living in rural areas, and is directly or indirectly linked with agriculture for their livelihood. Thirdly, Industry is also a heaven for educated as well as semi-educated labour force in the country. Pakistan industry is short listing its labour because of gradual decrease in demand as well as acute energy shortage. Energy shortfall crosses 5500 MW at time causing severe damage to production capacity. Fourthly, World economic depression coupled with American war against Terror has also put negative impacts on our economy. It has not only doubled our expenditures on military front but also defaced Pakistan’s image in international arena. These factors have put international investment in Pakistan at risk. Therefore, Pakistan is not attracting new investment causing unemployment in the country. Fifthly, United States of America spent 368 billion in 2007 on research and development whereas Pakistan’s attention towards this sector is the least. By spending on education and research, we can create more specialized fields thus generating more jobs. In the 2010 budget, Pakistan has earmarked only 2% of its GDP on education which is the lowest in whole of the region. Sixthly, Population increase is also a cause of unemployment in Pakistan. Till 2010, Pakistan’s population is 173.54 million wheras most of the population is unable to survive in the financial race because of illiteracy. In Spite of these factors poor governance, deep rooted corruption, faulty educational system, lack of quality educational institutions and feudalism are also aggravating the situation further. Finally, we can hold the government responsible for the its poor performance in financial sector. Poor governance have marred the performance of our economic sector by every side and government has taken only cosmetic measures to redress the problem. Dr. Ishrat Hussain suggestions to improve the governance have been put on the backburner.

Unemployment

*****

Introduction

***** of ***** a) The four components (Cyclical, Structural, frictional and seasonal *****) b) Increased productivity *****) Globalization, *****

Unemployment Statistics a) ***** Unemployment Rates b) State wise Comparison

4) Effects of Unemployment

Okun's Law (Relation between GDP and Unemployment)

Unemployment and National Debt

5) Unemployment Benefits

Unemployment Insurance

Extended ***** (TEUC)

***** Adjustment Assistance (TAA)

Personal Reemployment ***** (PRA)

6) Personal Effects of Unemployment

Financial Strain

Psychological effects

Effects ***** family

7) Conclusion

*****

Thesis high rate of unemployment ***** a negative effect on the national economy and greatly affects the living standards of the people. Apart ***** the ***** of ***** and the consequent ***** downslide, unemployment also has negative psychological implications and damaging ***** on the family structure.

Introduction

***** is ***** of the major economic problems affecting a nation. The ***** States, one of the vibrant ***** in ***** world currently suffers from a ***** unemployment crisis with more than 8 million people in the civilian ***** without jobs. After a decade ***** continued and consistent growth (1990 to 2000), ***** saw a growing ***** and a booming economy, there started a period of recession. Unemployment ***** reached a recent high of 6.1% in June 2003. The loss of productivity and the ***** unemployment ***** have created additional strain on ***** already deficient federal budget, which in turn has resulted ***** higher burden for the tax paying citizens. Let us analyze the underlying causes ***** unemployment, the unemployment ***** and ***** offered by the government and ***** effects of unemployment ***** the individual as well as ***** national ***** as a whole.

Causes of *****

There ***** several causes for unemployment situation in any market driven *****. According ***** economists ***** and Phelps, any nation at any given ***** of time, would continue to have a certain "natural rate" of unemployment. As per their *****, an increase in total demand does not just result in a ***** in unemployment rate but also creates an ***** in inflation. Likewise a decrease in total demand will result in an increase ***** unemployment rate and ***** inflation. There always exists a periodic oscillation in aggregate demand and hence a ***** flux ***** unemployment *****, which is referred to as ***** unemployment. [Paul Krugman].

Economists have studied that an increase ***** productivity and an increase in the labor force will both worsen the unemployment situation. As economist Heilbroner *****, "On the domestic front, they include a technology of ***** automation that has ***** severe employment strains ***** all advanced countries..The result is prospective increasing dependency on government-financed programs of unemployment relief or public works." [Heilbroner, 120]. Furthermore unemployment situation can be worsened by government policies such as price control, monopoly ***** to companies and ***** extensive government spending. [Judd W. Patton] The emerging Globalization phenomenon also has a ***** effect ***** our national economy. ***** initiated layoffs are observed to be on ***** rise ***** the last decade. Outsourcing of jobs to ***** developing countries is one

Essay

Outline the causes of both unemployment and inflation. Explain policies available to the government to combat these two economic issues.

Unemployment and inflation have many different causes and the levels of have had severe fluctuations over time. Unemployment and Inflation can be caused by many different things but normally they follow the business cycle with high inflation in times of boom and high unemployment in times of recession. The government can use two different policies to either expand or contract economic activity resulting in low or higher inflation or unemployment.

Inflation is caused by many different things, all resulting back to an upswing of the economy so most of the time inflation in high in recessions and low in booms. Inflation is measured by the CPI which measures the changes in the price of a fixed basket of goods and services acquired by household consumers, so you can see how much you can get for your money and measure inflation. There are threemain causes of inflation: Increase in consumer demand (demand-pull inflation) , increase in the cost of producing goods (cost-push inflation) and increase in the price of imports (imported inflation)

One cause of inflation is demand-pull this happens when demand for a product becomes faster than business can increase there output this means that there will be shortages which will forces the price up and your purchasing power down. Demand pull inflation normally occurs when the economy is growing quickly

Another cause of inflation is cost-push inflation. This is when the increase of the price of something used to make the product increases meaning that the products price will be forced to increase. For example when oil rises all the products that are made with oil are forced to increase like petrol and plastic. Other inputs such as business cost and wage increases also affect to cost-push inflation.

Imported inflation is when an increase in another country will mean the all.

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