Unemployment]0888888
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Unemployme nt
Unemployment
Ammad Ahmed Ch. (06108036) Mughees Khalid Butt (06108005) Mustafa Khalid Lone (06108006) Umair Sohail Butt (06108056) Usman Ilyas (06108058)
Definition of Unemployment
•Unemployment occurs when labor, a factor of production, is not being fully utilized due to the unavailability of suitable jobs. It is strictly defined as a situation where people who are willing and able to work cannot find employment.
History Of Unemploymen • From the beginning of our history, politicians have often called for full employment as a national goal, yet full employment has also been seen as a cause of inflation and so is undercut by decisions by the Federal Reserve in order to prevent inflation. Unemployment changes over time in terms of causes, makeup, degree of severity, and possible solutions, and over the last decade unemployment has both been reduced and has also changed its makeup in terms of the kinds of industries experiencing unemployment and the proposals for solving the problem. The highest job losses in the last decade have been in traditional bread-and-butter industries such as manufacturing, and this is seen as part of a shift in the economy to the new information age paradigm as workers are moved from manufacturing jobs to a service economy.
Types of Unemployment • Classical unemployment (disequilibrium unemployment) • Transitional Unemployment • Frictional unemployment • Structural unemployment • Technological unemployment • Regional unemployment • Seasonal unemployment
unemployment (disequilibrium unemployment)
An extreme view on unemployment is that there is none. The classical and extreme monetarist view of labour markets is that the labour market is like any other market. If the quantity demanded for labour is too low, then the price (wages) must fall until the market clears.
Transitional Unemployment
• A teacher in an international school might end his contract in one school and be starting at another school at the end of the long summer vacation. For eight weeks they may not be working. This sort of unemployment is called transitional unemployment
Frictional unemployment • Unemployment due to time lost in changing jobs rather than a lack of job opportunities. Frictional unemployment would not be reduced significantly even if there were on increased demand for workers, but might be reduced by improving the information available to job seekers about vacancies. •
Some people may lose their jobs by being made redundant or by quitting voluntarily. This group may not as yet have another job to go to and it might take time to find another job.
Cyclic Unemployment
• The portion of unemployment that is due to the business cycle and thus rises in recessions but then disappears eventually after the recession ends.
Structural unemployment
• Structural unemployment is so called because it is caused by the changing structures of industry in a country.
Technological unemployment
• This sort of unemployment is caused by change in technology and can lead to a reduction in demand for workers with particular skills.
Regional unemployment • Often industries are concentrated in a particular area of a country so that when structural and technological unemployment comes, it creates pocket of unemployment in one area
Seasonal unemployment
• This occurs when demand for labour is high at certain times of the year. The tourist industry is notoriously seasonal. School holidays and weather patterns mean that demand is higher at certain times of the year. With the increased demand for holidays comes an increased demand for labour and vice versa.
Rate Of Unemployment • Formula :
Total unemployed --------------------------------------- x 100 % Total working population
• The current rate of unemployment is at somewhere around 6.5 percent with substantial underemployment. The question is asked if components such as frictional, structural, cyclical, voluntary, or involuntary unemployment exist.
Rate Of Unemployment In Asia Countries
2000
2001
2002
2003
2004
Afghanistan
n.a.
n.a.
n.a.
n.a.
n.a.
Azerbaijan
1.2
1.3
1.3
1.4
1.4
Iran
14.3
14.2
12.8
11.8
10.3
Kazakhstan
12.8
10.4
9.3
8.9
8.0
Kyrgyzstan
3.0
3.1
12.5
9.9
n.a.
Pakistan
7.8
7.8
7.8
8.2
8.2
Tajikistan
2.7
2.3
2.5
2.4
2.0
Turkey
6.5
8.4
10.3
10.5
10.3
Turkmenistan
2.4
2.6
2.5
2.5
6.0
Uzbekistan
0.4
0.4
0.4
0.3
0.4
Unemployment Rates world wide
Unemployment Compensation
• Unemployment Compensation is an amount received by an unemployed worker, originating from the state. Unemployment Compensation is classified as a type of social welfare benefit.
Why compensate unemployed ? • The unemployed are a burden on the economy they have to be provided for atleast that much that can satisfy their basic needs. • Another premise behind the system is that unemployed workers will find an optimal job where their skills can be put to use in the interest of the economy as well as their own, rather than simply taking the first job that comes along and filling their days with that work. The unemployment insurance in effect makes it one's full-time job to find the most suitable job within a reasonable
Effects of unemployment
• Increase in crime rate • Economic impact • Social impact • Burden on government
Crime And Unemployment • Unemployment has direct relation with crime rate. Increase in unemployment results in increasing crime rates. With people unable to find jobs they find criminal ways of making money. However, the overwhelming abundance of research directed at crime and unemployment views the issue from the starting points of poverty, education, and unemployment as the causatives.
Economic impact • From Okun's law we know that for every 2% fall in GNP relative to potential GNP, the unemployment rate rises by 1% point. High unemployment is a symptom of waste — for during recessions, when unemployment is high, the economy is not producing up to high level. When economy is not producing sufficiently, we can say that we are unable to use our full resources for production purposes. Economy will not grow as fast as it can if become able to produce at high level.
Social impact • However large the cost to economy of unemployment, a recounting of Rupees lost does not adequately convey the human, social and psychological toll that periods of persistent involuntary unemployment bring. It is apparent that recessions and the associated high unemployment are extremely costly to the economy. • Understanding the sources of unemployment has proved one of the major challenges of modern macroeconomics. Voluntary unemployment may be or when qualified people chose not to work out the going wage rate unemployment occur. The key element in understanding involuntary unemployment
Social impact • The upward creep in the natural rate arises mainly because of demographic trends particularly the higher proportion of teenagers in the labour force. In addition, government policies are also increasing unemployment rate i.e. Golden Shake Hand, ban on jobs increasing unemployment rate. • It has resulted in major depressions for people and even has forced people to an extent to commit suicide.
Interviews
Efforts of Government of Pakistan • Banks & Business Finance institutions • Small Business Finance Corporation (SBFC) • Small and Medium Enterprises Development (SMEDA)
Efforts of Government of Pakistan •
The government is trying to reduce the unemployment rate. Under Prime Minister's Self Employment Scheme, different Banks and Small Business Finance Corporations are extending loans to unemployed youths and skilled professionals having diploma/degree and business experience. Loans ranging from Rs.10,000 to be Rs.500,000 for small business and from Rs.500,000 to Rs.5,000,000 for small industries etc. Small Business Finance Corporation is playing role in reducing unemployment. The liberal economic and fiscal policies of the government may reduce unemployment rate because they can create new job opportunities and business in the country. The government has announced an economic revival package to stimulate investment and industrial production and boost exports.
•
In addition, construction of additional motorways and setting up of industrial zones throughout the country would also generate new opportunities for employment in the country.
Suggestions •
Govt. should make efforts to push economic growth process.For this purpose Economic Revival Package should announce for the revival of industries sector, to stimulate production and investment.
•
Govt. should seriously try to boost exports through broadening the tax base and lowering tariffs.
•
Govt. should announce a package for the development of agriculture sector .
•
Beside this a number of fiscal and monetary measures should take to attract industrialists and particularly foreign investment.
•
More Technical and Vocational training facilities should be provided. In this way unemployed people will get the chance to enhance their skills and become able to earn reasonable income.
•
With a view to reduce educate unemployment, self-employment scheme should be encouraged in true manners.
A man willing to work and unable to find work, is perhaps the saddest sight that fortunes inequality exhibits under the sun. - Thomas Carlyle
•Questions and queries !
Unemployment
Ammad Ahmed Ch. (06108036) Mughees Khalid Butt (06108005) Mustafa Khalid Lone (06108006) Umair Sohail Butt (06108056) Usman Ilyas (06108058)
Definition of Unemployment
•Unemployment occurs when labor, a factor of production, is not being fully utilized due to the unavailability of suitable jobs. It is strictly defined as a situation where people who are willing and able to work cannot find employment.
History Of Unemploymen • From the beginning of our history, politicians have often called for full employment as a national goal, yet full employment has also been seen as a cause of inflation and so is undercut by decisions by the Federal Reserve in order to prevent inflation. Unemployment changes over time in terms of causes, makeup, degree of severity, and possible solutions, and over the last decade unemployment has both been reduced and has also changed its makeup in terms of the kinds of industries experiencing unemployment and the proposals for solving the problem. The highest job losses in the last decade have been in traditional bread-and-butter industries such as manufacturing, and this is seen as part of a shift in the economy to the new information age paradigm as workers are moved from manufacturing jobs to a service economy.
Types of Unemployment • Classical unemployment (disequilibrium unemployment) • Transitional Unemployment • Frictional unemployment • Structural unemployment • Technological unemployment • Regional unemployment • Seasonal unemployment
unemployment (disequilibrium unemployment)
An extreme view on unemployment is that there is none. The classical and extreme monetarist view of labour markets is that the labour market is like any other market. If the quantity demanded for labour is too low, then the price (wages) must fall until the market clears.
Transitional Unemployment
• A teacher in an international school might end his contract in one school and be starting at another school at the end of the long summer vacation. For eight weeks they may not be working. This sort of unemployment is called transitional unemployment
Frictional unemployment • Unemployment due to time lost in changing jobs rather than a lack of job opportunities. Frictional unemployment would not be reduced significantly even if there were on increased demand for workers, but might be reduced by improving the information available to job seekers about vacancies. •
Some people may lose their jobs by being made redundant or by quitting voluntarily. This group may not as yet have another job to go to and it might take time to find another job.
Cyclic Unemployment
• The portion of unemployment that is due to the business cycle and thus rises in recessions but then disappears eventually after the recession ends.
Structural unemployment
• Structural unemployment is so called because it is caused by the changing structures of industry in a country.
Technological unemployment
• This sort of unemployment is caused by change in technology and can lead to a reduction in demand for workers with particular skills.
Regional unemployment • Often industries are concentrated in a particular area of a country so that when structural and technological unemployment comes, it creates pocket of unemployment in one area
Seasonal unemployment
• This occurs when demand for labour is high at certain times of the year. The tourist industry is notoriously seasonal. School holidays and weather patterns mean that demand is higher at certain times of the year. With the increased demand for holidays comes an increased demand for labour and vice versa.
Rate Of Unemployment • Formula :
Total unemployed --------------------------------------- x 100 % Total working population
• The current rate of unemployment is at somewhere around 6.5 percent with substantial underemployment. The question is asked if components such as frictional, structural, cyclical, voluntary, or involuntary unemployment exist.
Rate Of Unemployment In Asia Countries
2000
2001
2002
2003
2004
Afghanistan
n.a.
n.a.
n.a.
n.a.
n.a.
Azerbaijan
1.2
1.3
1.3
1.4
1.4
Iran
14.3
14.2
12.8
11.8
10.3
Kazakhstan
12.8
10.4
9.3
8.9
8.0
Kyrgyzstan
3.0
3.1
12.5
9.9
n.a.
Pakistan
7.8
7.8
7.8
8.2
8.2
Tajikistan
2.7
2.3
2.5
2.4
2.0
Turkey
6.5
8.4
10.3
10.5
10.3
Turkmenistan
2.4
2.6
2.5
2.5
6.0
Uzbekistan
0.4
0.4
0.4
0.3
0.4
Unemployment Rates world wide
Unemployment Compensation
• Unemployment Compensation is an amount received by an unemployed worker, originating from the state. Unemployment Compensation is classified as a type of social welfare benefit.
Why compensate unemployed ? • The unemployed are a burden on the economy they have to be provided for atleast that much that can satisfy their basic needs. • Another premise behind the system is that unemployed workers will find an optimal job where their skills can be put to use in the interest of the economy as well as their own, rather than simply taking the first job that comes along and filling their days with that work. The unemployment insurance in effect makes it one's full-time job to find the most suitable job within a reasonable
Effects of unemployment
• Increase in crime rate • Economic impact • Social impact • Burden on government
Crime And Unemployment • Unemployment has direct relation with crime rate. Increase in unemployment results in increasing crime rates. With people unable to find jobs they find criminal ways of making money. However, the overwhelming abundance of research directed at crime and unemployment views the issue from the starting points of poverty, education, and unemployment as the causatives.
Economic impact • From Okun's law we know that for every 2% fall in GNP relative to potential GNP, the unemployment rate rises by 1% point. High unemployment is a symptom of waste — for during recessions, when unemployment is high, the economy is not producing up to high level. When economy is not producing sufficiently, we can say that we are unable to use our full resources for production purposes. Economy will not grow as fast as it can if become able to produce at high level.
Social impact • However large the cost to economy of unemployment, a recounting of Rupees lost does not adequately convey the human, social and psychological toll that periods of persistent involuntary unemployment bring. It is apparent that recessions and the associated high unemployment are extremely costly to the economy. • Understanding the sources of unemployment has proved one of the major challenges of modern macroeconomics. Voluntary unemployment may be or when qualified people chose not to work out the going wage rate unemployment occur. The key element in understanding involuntary unemployment
Social impact • The upward creep in the natural rate arises mainly because of demographic trends particularly the higher proportion of teenagers in the labour force. In addition, government policies are also increasing unemployment rate i.e. Golden Shake Hand, ban on jobs increasing unemployment rate. • It has resulted in major depressions for people and even has forced people to an extent to commit suicide.
Interviews
Efforts of Government of Pakistan • Banks & Business Finance institutions • Small Business Finance Corporation (SBFC) • Small and Medium Enterprises Development (SMEDA)
Efforts of Government of Pakistan •
The government is trying to reduce the unemployment rate. Under Prime Minister's Self Employment Scheme, different Banks and Small Business Finance Corporations are extending loans to unemployed youths and skilled professionals having diploma/degree and business experience. Loans ranging from Rs.10,000 to be Rs.500,000 for small business and from Rs.500,000 to Rs.5,000,000 for small industries etc. Small Business Finance Corporation is playing role in reducing unemployment. The liberal economic and fiscal policies of the government may reduce unemployment rate because they can create new job opportunities and business in the country. The government has announced an economic revival package to stimulate investment and industrial production and boost exports.
•
In addition, construction of additional motorways and setting up of industrial zones throughout the country would also generate new opportunities for employment in the country.
Suggestions •
Govt. should make efforts to push economic growth process.For this purpose Economic Revival Package should announce for the revival of industries sector, to stimulate production and investment.
•
Govt. should seriously try to boost exports through broadening the tax base and lowering tariffs.
•
Govt. should announce a package for the development of agriculture sector .
•
Beside this a number of fiscal and monetary measures should take to attract industrialists and particularly foreign investment.
•
More Technical and Vocational training facilities should be provided. In this way unemployed people will get the chance to enhance their skills and become able to earn reasonable income.
•
With a view to reduce educate unemployment, self-employment scheme should be encouraged in true manners.
A man willing to work and unable to find work, is perhaps the saddest sight that fortunes inequality exhibits under the sun. - Thomas Carlyle
•Questions and queries !
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