Question

I need an article on any economic topic. You are required to find an article that is relevant to economics and make an argument in your analysis using appropriate economic terminology. Make sure you are referencing all appropriate sources. Length 1 to 2 pages

Answer 1

Rise in unemployment during recession.

Unemployment is a situation where job is not available when the job seekers are willing to work at the prevailing wage rate.

Depending on the nature unemployment, unemployment can be divided into Structural, frictional and cyclical unemployment.

Structural unemployment.

Structural unemployment occurs due to the change in structure of the economy. When the economy moves from agriculture to industrialization the workers in the agriculture lose their job.

Frictional unemployment

Frictional unemployment occurs when the workers voluntarily quit some jobs in search of better jobs.

Cyclical unemployment

Cyclical unemployment is due to the cyclical change of the economy. To ensure full employment the actual GDP must be equal to potential GDP. When actual GDP falls below the potential, the economy will suffer from unemployment.

Trends of unemployment during recession

During recession the growth rate in GDP will be below the rate that the required to maintain the minimum level of employment. The slow economic growth during recession which cause a fall in the sales of business firms and revenue reduce their production and fewer labors are hired for employment. Unemployment rise during recession and falls during prosperity.

When a country’s output demand fall, firms reduce their production by hiring less labors. This leads to rise in unemployment. The unemployment leads to less income to spend on consumer goods, lowering aggregate demand and slow growth rate. This can be further leads to more job loss.

The history of recent recession shows that world economic activity decreased by 5.1% and unemployment jumped to 10.1% in 2009.

World Unemployment rate was steadily increased in 2015 and reached to top by the end of 2016. The unemployment rate was peak by the end of 2016 and declined during 2017. The unemployment rate was declined throughout 2017 and from the beginning of 2018 it starts to rise.

The US unemployment rate was 24.33 in 1933 which caused by Great Depression. US. Unemployment was more than 14% between 1931 and 1940. It was 10.8 in 1982. The unemployment rate reached by 9.9 in 2009 when the world experiencing the recession.

In world scenario the unemployment in country can affect the other economies of the world. A low employment level in country means the country has less power to purchase the product of other country. This will reduce the export earnings of other country.

Recession is not alone cause unemployment

Recession is generally termed as the cause of unemployment. But it is not true to say that recession cause unemployment in all the time. A country’s political structural change also causes unemployment.

Inappropriate government policies may also cause unemployment. If the government tried to increase its revenue without considering the other economic parameters may cause fall in total spending on the economy, which reduce the production and employment.

The unemployment may cause due to international policies and attitudes. Now a days the gulf countries are adopted a policy of regionalization which compel them to sent back foreign labors and give the opportunities to the natives.

The tight immigration policies followed by the countries may prevent the entry of job seeker and followed by mass unemployment.

The technological change in many countries compels them to adopt more labour saving devices. Thus the countries that are late in technological advance loss job opportunities and suffer from unemployment.

Communal violence and racial discrimination give less chance to employment.

The protectionist policy followed by many countries cause unemployment. If one country impose tariff on its import, the eexport from the other country decrease and cause unemplyement.

The tariff imposition between US and China may lead to unemployment in both countries.