Question

Why will there always be at least some unemployment? Give an example of a public policy that affects the unemployment rate. Is it positive or negative? Why? In what ways do unions affect the natural rate of unemployment? How about human resource regulations, such as safety or age-based rules? Do all of these affect the cost of hiring employees? Should the affect of a regulation on employment be considered as a part of the adoption process? Why or why not?

Answer 1

Unemployment is an undesirable universal phenomina. It affects individuals, society and the country very badly. Unemployed people has to face physical and mental challeges in addition to the financial problems. It even helps increase the crime rate in society. It affects the gross domestic product (GDP) of a nation negatively.  

When a person loses his job, because of some or other reason, there is an immediate impact on his standard of living. Those who are eligible for unemployent benefits are getting governmental assistanc which is not helpful even to meet 50 % of his necessities.  Continuous unemployment will result erosion of their skill which they may have acquired by years of efforts.  

Aggregate demand, global competition, education, automation, demographics, etc. are the situations behind the creation of increased level of unemployment. High interest rates, global recession and global economic slodown are the additional factors which are added fuel to the fire.  

In order control the issues related unemployment the Government has adopted Public policies like

i. Unemployment Insurance

It helped the workers to earn a portion of their previoous earning, which only helped them to prevent looking for new jobs. It resulted more nemployment.

ii. Minimum Wage Law

As per this law, the minimum wages increased the unskilled workers equilibrium wage rate, quantity of demand for labour declined. Inshort , in order to help some group of people to come out of poverty, it forced others to become unemployed.  

In short, in total the policies adopted by the governement to support those who are unemployed did not have any positive impact .  

Trade unions are doing their maximum to protect those people who are already employed, by increasing their minimum wages and any addtional fiancial benefits if possible. At the same time the unemployed continues to remain unemployed. The employed on the other hand are enjoying the benefit becuase of the unemployed.

The unemployment claims are managed by the Human resource management. Age wise rules and regulations are favourable in connection with the unemployment. People at a certain age will get retirement and it helps other unemployed ones to occupy that job.