Question

Kim was a broker for INK investment firm and has just lost her job because the overall economy is on the downswing (i.e. experiencing an “adjustment”). INK recent bankruptcy was brought about partially because of the slump in the real estate market. What type of unemployment is Kim experiencing

Answer 1

Unemployment:

Unemployment is a term referring to individuals who are employable and seeking a job but are unable to find a job. Furthermore, it is those people in the workforce or pool of people who are available for work that does not have an appropriate job. Usually measured by the unemployment rate, which is dividing the number of unemployed people by the total number of people in the workforce, unemployment serves as one of the indicators of an economy’s status.

Looking deeper into unemployment

The term “unemployment” can be tricky and often confusing, but it certainly includes people who are waiting to return to a job after being discharged. However, it does not anymore encompass individuals who have stopped looking for a job in the past four weeks due to various reasons such as leaving work to pursue higher education, retirement, disability, and personal issues. Even people who are not actively seeking a job anywhere but actually want to find one are not considered unemployed.Interestingly, people who have not looked for a job in the past four weeks but have been actively seeking one in the last 12 months are put into a category called the “marginally attached to the labor force.” Within this category is another category called “discouraged workers,” which refers to people who have lost all their hope of finding a job.

There are the types of the Frictional unemployment:

Frictional unemployment refers to workers who are in between jobs. An example is a worker who recently quit or was fired and is looking for a job in an economy that is not experiencing a recession. It is not an unhealthy thing because it is usually caused by workers looking for a job that is most suitable to their skills.

Effects:

The impact of unemployment can be felt by both the workers and the national economy and can create a ripple effect.Unemployment causes workers to suffer financial difficulties that may lead to emotional destruction. When it happens, consumer spending, which is one of an economy’s key drivers of growth, goes down, leading to a recession or even a depression when left unaddressed.

Unemployment results in lowered purchasing power, which, in turn, causes lowered profits for businesses and leads to budget cuts and workforce reductions. It creates a cycle that goes on and on and on. Everyone loses in the end.

Final word:

Unemployment is a serious social and economic issue that results in a tremendous impact on everything but is often overlooked. A stronger system of assessing unemployment should be put in place in order to determine its causes and how to address it better.