A Brief Note On Unemployment And Its Effect On The Workplace Essay

A Brief Note On Unemployment And Its Effect On The Workplace Essay

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1. Labor is an important factor of production for all firms. The most recent unemployment rate is estimated at 7.7%% (February 2013). Economists have identified three types of unemployment. Which type would affect your firm?
Frictional unemployment that occurs because it takes time for employers and workers to find each other, would not affect Microsoft too much. Microsoft is a major technical company with employment opportunities across the world. For this reason most people who are seeking employment in the technical field would probably apply for a job with Microsoft, thus giving Microsoft “the pick of the litter”. It would be the people that Microsoft didn’t hire who would become frictionally unemployed (Rittenberg & Tregarthen, 2014).
Structural unemployment results from a mismatch between worker qualifications and the characteristics employers require would be the one that would have the most effect on Microsoft. Technology changes and advancements happen almost hourly. It would not be beyond reason to expect that a change in technology could cause Microsoft to either have to lay off employees who have just become obsolete, or to struggle to find employees with current qualifications (Rittenberg & Tregarthen, 2014).
Cyclical unemployment in excess of the unemployment that exists at the natural level of employment, would affect Microsoft, but not more or less than it would affect any other company or organization (Rittenberg & Tregarthen, 2014).

2. Think about other employment issues such as outsourcing. Do you think your firm would benefit from outsourcing?
Yes, Microsoft would and does benefit from outsourcing. A majority of Microsoft’s products are software based. This means that most of the customer service is...


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... & Tregarthen, 2014).

Unfortunately, until the economy improves a bit, Microsoft will not be able to increase their profit margins enough to encourage them to drastically increase their hiring rate. The unfortunate part is that unemployment is a part of a vicious cycle. People who are unemployed don’t purchase as many products; companies whose products aren’t being purchased, don’t make profits; lack of profits prevent companies from hiring the unemployed (Barnes, n.d./ Rittenberg & Tregarthen, 2014). Production of Microsoft products will more than likely remain the same in the next year. The demand for the kind of products Microsoft provides generally stays the same over time. Microsoft primarily depends on the fact that their software products will become obsolete and customers will have to purchase the new version (Barnes, n.d./ Rittenberg & Tregarthen, 2014).

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