Impact on Unemployment on Standard of Living
Unemployment refers to the condition and extent of joblessness within an economy, and is measured in terms of the unemployment rate, which is the number of unemployed workers divided by the total civilian labor force. If unemployment rises in a country it will affect the country’s standard of living in a negative way, take Jamaican economy for example, approximately 65% of the labour is unemployed, so if 65% of the population is not earning an income /income is not being generated then there is going to be a fall out in the economy which will result in recession and also the GDP will decline.If unemployment continues to increase the standard of living will defiantly changed the way how individual(s) make certain decision.
In terms of how are they going to support themselves and families or what can they do to generate funds in their pockets. In the Jamaican economy unemployment levels are increasing dramatically . There are several causes behind this increasing rate. But the main reason for the high level of unemployment is technological progress.
In a fewer year far less working hours are needed to produced all the goods that are required, hence there will be less demand of labour.This can lead more to the raise of unemployment ratio. On the other hand, traditionalism, ignorance and over population etc are some other major cause that led to the raise of unemployment. Today, unemployment data are useful for a variety of reasons. The government use unemployment along with other labour market indicators for macro-economic and labour market management.
Data are also supplied to a range of international organizations such as the European Central Bank. In the social policy domain, unemployment is used as an indicator of relative hardship.Today, unemployment is the major crisis worldwide, to keep check on it is very much essential, it is you, who can change the word unemployment into employment. There are four major types of unemployment which will be discus in further details. Frictional unemployment are individuals that are temporarily unemployed while transiting between jobs or just entering the labour market.
This kind is typically short in duration but always present in a market economy. Structural Unemployment whenever an economy undergoes basic structural changes there is the possibility of some part of the labor force being thrown out of employment.The long term process of economic development and growth gives rise to variety of structural changes. Considerable changes in productive activity from traditional agriculture to modern industry; transformation of rural sectors into urban units; replacement of small scale and cottage industries by large scale manufacturing units; introduction of electricity or other sources of commercial energy in place of manual and animal power are some examples of structural changes.
The economy under the process of structural changes is in the condition of transition. Some workers are likely to become jobless during the process of transition. Moreover, the duration of such unemployment may also be fairly long depending upon the extent of corrective and restorative measures introduced to restrict the period of unemployment. What are the policies which a government may adopt to reduce unemplyment Increased Government Expenditure The Government can raise the level of its own spending.
This “fiscal pump-priming” directly increases aggregate demand and can have a multiplier effect on equilibrium national income. The government could raise current expenditure (for example raising pay levels in education and the health service) or expand spending on capital projects which add to the stock of capital (for example spending on new roads, new hospitals or other major infrastructural projects). Sustained economic growth provides a platform for more jobs to be created in the economy. Lower TaxationA reduction in direct taxation increases consumers’ disposable income and should boost household spending. The effect may be greater if taxes are cut for people on lower than average incomes.
These tax-payers are likely to spend a greater percentage of their disposable income. Lower interest rates A relaxation of monetary policy through lower interest rates encourages the demand for credit, reduces saving and increases consumers’ real ‘effective’ disposable incomes; all of which will boost consumption and demand.It may also encourage firms to invest, as the marginal cost of investment will fall. Remember that interest rates are not set by the government. The Bank of England now sets interest rates each month at the meetings of the Monetary Policy Committee. Depreciation of the exchange rate A lower value for the pound should lead to a rise in the orders of exports from UK firms and to a reduction of import penetration by making exports cheaper and imports more expensive.