Unemployment is when people able and willing to work are not able to find a job. This article focuses on the problems of unemployment and recession faced by Greece. The type of unemployment which is identified in Greece is Demand Deficient Unemployment. This occurs when there is insufficient demand in the economy to maintain full employment. If demand falls, firms sell less and therefore reduce production. If they are producing less, this leads to lower demand for workers. Either workers are fired or a firm cuts back on employing new workers. Demand deficient unemployment is related to the General Theory of Money which was introduced by J.M. Keynes. It is also called Keynesian Unemployment.
Main factors of demand deficient unemployment are
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Which means that employee’s wages can move up easily but don’t move down easily, since they are resistant towards wage cuts. If firms did manage to cut wages, this would lead to a further fall in consumer spending and aggregate demand, causing more unemployment.
Unemployment doesn’t only affect individuals; it also affects society and the economy as a whole. There are usually increased crime rates in places where there is higher unemployment. Increased borrowing by govt. Tax revenue will fall because there are less people paying income tax and VAT. Also the govt. will have to spend more on unemployment benefits people will not be able to support their families or themselves due to no income and ongoing expenses. Lower GDP for the economy, the economy will be below full capacity this is inefficient and will lead to lower output and
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The Keynesian theory of unemployment emphasizes the argument that if monetary and fiscal policy does not keep demand at a high enough level, then the economy is less likely to be able to sustain a high rate of employment. A growing economy creates jobs for people entering the labour market for the first time. And, it provides employment opportunities for people unemployed and looking for work. However, not every increase in aggregate demand and production has to be met by employing more labour. Businesses may decide to increase production by making greater use of capital inputs such as extra units of
First, I will discuss the time period between 1973-1974. Because the unemployment and inflation rates are higher than normal, we can assume that the aggregate-demand curve is downward-sloping. When the aggregate-demand curve is downward-sloping, we know that the economy’s demand has slowed down. When the economy’s demand has slowed down, businesses have to choice but to raise prices and lay off workers in order to preserve profits. When employers throughout the country respond to their decrease in demand the same way, unemployment increases.
explain it and to devise a cure for it. A person named John Maynard Keynes came
Keynesian school of thought has been widely in application in the modern day. The markets have frequently veered off the rail and necessitated governments to interfere (Fazzari, and Variato, 1994). John Maynard Keynes is one of the most influential economists of the modern day. In his book on the general theory of employment, we realize that the private sector decision making sometime leads to imperfections in the market and, therefore, there is a great need for the governments to interfere to correct them (Keynes, 1937). Some of the imperfections that we witness in a market controlled by the private sector include monopolies, unemployment, black markets, cartels as well as hoarding. There is thu...
However, the social and personal costs of unemployment are more extensive. These include factors such as poverty and debt, family tensions and breakdowns, homelessness, shame and stigma; of which can lead to increased social isolation, and an increase in the possibility of criminal activity (McClelland, A., & Macdonald, F.,
Economic growth focuses on encouraging firms to invest or encouraging people to save, which in turn creates funds for firms to invest. It runs hand-in-hand with the goal of high employment because in order for firms to be comfortable investing in assets such as plants and equipment, unemployment must be low. Hereby, the people and resources will be available to spur economic growth.
...t have a job previously, creating a surplus of people needing a job. Meaning that the employers are willing to decrease demand, and make less people do more work.
Employed individuals also have weak spending power due to job insecurity and fear of potentially losing their jobs. When people buy fewer goods and services, businesses become less profitable, ultimately having negative economic impacts. In addition, the unemployed do not contribute to the income generation of the economy, and also claim benefits from the government. This results in the government needing to obtain more money through tax to provide for the increased benefit claims. Overall, they create an additional cost for the economy, deferring the costs able to be spent in future developments or other
Keynesian Economics was developed and founding by John Maynard Keynes. He believed and wrote in his book “The General Theory of Employment, Interest and Money” that it is essential for the Government to play a vital role in economic stability. Keynesian theorist believe Government spending, tax hikes or tax breaks are vital in economic success. Keynesian assumptions include: Rigid or Inflexible Prices, Effective Demand, and Savings-Investment Determinants. Rigid or Inflexible Prices suggest that wages increases are easier to take while wage decreases hits resistance; likewise, a producer will increase prices yet when needed will be reluctant to decrease prices.
Through the monetary policy, the government limits the supply and circulation of money. By doing that, they are taking money away from all people. Although it affects all people, it especially affects the already poor factory workers. Businesses do not want to lose money for themselves. So, if the government cuts the money circulation, the businesses will cut the wages of the workers even more than the already are.
The disparities between the two views of the economy lead to very different policies that have produced contradictory results. The Keynesian theory presents the rational of structuralism as the basis of economic decisions and provides support for government involvement to maintain high levels of employment. The argument runs that people make decisions based on their environments and when investment falls due to structural change, the economy suffers from a recession. The government must act against this movement and increase the level of employment by fiscal injections and training of the labour force. In fact, the government should itself increase hiring in crown corporations. In contrast the Neoliberal theory attributes the self-interest of individuals as the determinant of the level of employment.
Here are some key points and ideas about exercises we could do in class. PLease contact me if you have any questions. I think we could have the speaker and do the mock interview I suggested toward the end of this e-mail. Shana Cohn CLASS DESIGN Important points, class discussion questions and activities. Part I Job Analysis defined: Identifying lists of activities or tasks associated with the job. Determining the skills needed to perform the job successfully. A well-designed job analysis can help to create a work environment where expectations are clear and future problems can be alleviated through communication. Some detailed benefits of job analysis include: 1. It provides uniform guidelines for dealing with employment selection, compensation, performance standards, and the skills needed for any given position. 2. It lays a foundation for gaining a competitive advantage by identifying training needs for the incumbent employee or an employee entering into the organization. 3. A successful job analysis draws clear boundaries between the employer and employee regarding qualifications, job responsibilities, lines of authority, and ways of preventing or dealing with grievances. 4. It allows employers to hire qualified candidates by linking applicants' skills to the job analysis. Employers can also prove that their requirements for selection are related to the job. The ADA defines a qualified applicant as "one who can perform the essential functions of the job." A job analysis provides the employer with justification of why they chose a particular applicant. Other areas to note: 1. The most common reason for a job analysis is to gather information for job descriptions. The job description should focus on results and outcomes instead of how to accomplish the job, because each person attains results in a different fashion. 2. Preparation for the future is key to dealing with a changing workplace. The job analysis should integrate issues the organization may confront in the future, such as turnover and technology advances that could change its structure. 3. Forecasting HR needs is critical to the success of the organization. These should be assessed with past trends, evaluating the skills of incumbent positions, and being aware of changing skills and requirements. Some questions/activities regarding job analysis: A class activity would be a case study that involves a new person hired into an organization where a job analysis is not utilized. The following questions serve as a guideline for the types of issues that could arise without a clear job analysis.
People need money to purchase all kinds of goods and services they needed every day and sometimes, for goods or services they desire to own. To fulfill that, they have the essential need to earn money. In order to earn money, they must work in either in fields related to their interests or to their qualifications. However, people will meet different challenges during their jobs-hunting sessions, such as many candidates competing for a job vacancy; salaries offered are lower than expected salaries and economic crisis or down which causes unemployment. Unemployment is what we will be looking into in this report. Dwidedi (2010) stated that unemployment is defined as not much job vacancies are available to fulfill the amount of people who want to work and can work according to the current pay they can get for a job they chose to work as. There are four major types of unemployment: frictional, structural, cyclical and seasonal unemployment.
In December 2007, the United States of America experienced a very scarce yet appealing setback. In fact, because of this specific dilemma between 200,000 and 500,000 were left unemployed and without a stable home. The national Bureau of the Economic research defined this nationwide downfall as “The great recession”. According to the U.S Bureau of labor statistics the unemployment rate has not made a drastic improvement since the start of the great recession. Unemployment has become that is still rising today with a slow rate of change. Unemployment is usually expressed as a number or as a percentage of a larger number. Although it has been ambiguous who has to be included in the percentage, there are members of society without a job, for whom it is certain that should not be added. Officially the unemployed are the people who are registered with the government as willing to work and able to work at a going wage rate but can’t find suitable employment despite an active search for work. In the article “why long-time employment can’t get back on track”, the author begins speaking on a ...
One of the most life changing effects of unemployment is the loss of income. Especially if they are a single parent of if they have a large family to support. Having no money means eventually having no food, no clothes, no shelter, and no car. It also prevents one from doing many things and activities, even though their amount of leisure time has increased. One might not have money to go to the movies, play on sports’ teams, or do any other recreational things. Being unemployed for a long enough time leads to a lot of debt. Any money that has been saved ends up getting spent rather quickly with all of today’s living expenses. Twenty thousand dollars may seem like a lot of money to some people, but with no income that money gets spent before you know it.
Lower GDP for the economy also one of the consequences of unemployment in current time. High rate of this issue implies the economy is operating below full capacity and inefficient so that it will lead to lower output and incomes. Because people who are searching for their work usually will spend less in purchasing goods and