Unemployment in Global Recession Scenario

Topics: Unemployment, Poverty, Economics Pages: 5 (2184 words) Published: October 21, 2008
Today, a global recession has become a biggest threat to world. Due to this global recession, it is a macroeconomics crisis. In last few years, unemployment has become a serious and top most problem in many part of the world. Also increased globalizations have put more employee job into risk. The under developing countries like India, china are facing their bad time. Emerging economies like China and India are affected by the negative influence of the US Subprime Market Crisis. By reducing the demand for labor we can bring economic downturn, but it tends to increase the unemployment level in the formal sector and bring the wages charge down. It means the poverty rate is increasing and as well as the unemployment is also increases at the same rate. Such both effects try to tend the unemployment and poverty in formal economics. Thus recession works into two ways, directly or indirectly. Directly, in this scenario it decreases the wages of employees and it creates more jobless employees it means more number of poor in formal economy. In directly in this scenario it brings wages down those already employed in formal economy. In other word when the economy is passing through in a recession scenario the GDP rate will be high. The goods, service and product demand would be low. When demand of the product would be low the consumer expenditure also will be low. When demand will be low the production will be low. It means less production less no employment required. It means a gap between supply and demand processes. Due this global recession all companies are very worried about the future thought out the world. They think they are also concerned whether they will be able to recruit and keep the best people to run their business. Unemployment rate is the per cent of civilian labour work force activity looking for work but unable to find a job. The unemployment consist of three types of people first who are fit for the job but are not getting a job, second are the people who have left one job and are seeking another job and there is a time lag in between this also adds in the unemployment rate and finally, the third type of people who not fit for the job they are seeking. The rate is compiled by the US department of labour in corporation with the labour department in all the states and released to the public on the first Friday of each month. The unemployment rate is affected by number of people entering the work force as well as the number of unemployed people an important part of labour department is payroll employment which covers data hours, earning and employment for non firm industries nationally by state and other major metropolitan areas. The unemployment is one of the most closely watched from all the government of the world because it gives a clearest indication of the direction of the economy. A raising unemployment rate will be seen by the analyst and the Federal Reserve as a sign of a weak economy which might call for a easing of monetary policy by the federal. Employment opportunities are in a declining stage in housing related industries, financial services and building materials are global in sight. Also believe that there is a twenty-five per cent chance of the longer, deeper recession brought on the failure of the larger financial institute toppled by bank mortgage based investment financial system would likely to cause credit to get even more tighter, strangling potential growth. Unemployment has now raised enough to send a reliable signal of recession strength in export, industries like aircraft technology and software and firms’ equipment will help keep the recession shallow and the stimulus package will help in keeping it short. Unemployment and Economy in worldwide

In worldwide unemployment is very high, still now 250 million people have unemployment across world, more than 140 million working people get money less than $2 per day. In the world wide day by day lot of people face...

References: 1. Journal on World Economic Situation and Prospects 2008,UN dept of public information,09 Jan 2008.
2. http://freedomfromhunger.org/landing/endhunger.php?orgin=gppoverty
3. http://www.nytimes.com/2008/08/24/business/24global.html?scp=4&sq=unemplymentinglobalscenarioin2008&st=cse
4. http://www.ilo.org/global/lang--en/index.htm
5. UN news centre article on 25 January 2007 http://www.un.org/news/
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