In the nowadays severe economic conditions all countries suffer from the unemployment to any extent. Unemployment essay aims to focus on identifying what is unemployment, the most significant factors which cause it, economies which suffer the most, its implications, and, the most crucial, ways how to reduce unemployment rate not only in the particular country but on the global scale as well. Unemployment rate depends on the level of economic development of a certain country. To this end, developed countries have lower unemployment rate than developing and underdeveloped ones. However, all of them want to provide as many jobs as they can in order all citizens could have a life worth living.
Officially, the unemployment rate is determined as the number of unemployed people divided by the total sum of the labor force. According to the International Labour Organization (ILO), since the global international crisis starts, more than 61 million of people have lost their jobs. Based on the ILO’s research the global economic system needs to create almost 280 jobs by 2019 year in order to close this employment gap. Latin America, Africa, West and South Europe, and the Middle East are the regions with the highest unemployment rates and are represented by such countries as South Africa, Greece, Spain, Iraq, and Egypt.
An unstable economic environment connected with unstable capital flows, dysfunction of the financial markets and the deficit of global demand still continues to affect enterprises and discourage investment and job creation, as a result. In high-income countries, the causes of unemployment can be classified in two forms: either cyclical unemployment affected by the economic recession or the natural rate of unemployment caused by the labor market factors, such as government management concerning hiring and starting businesses. Low-income and middle-income countries face employment concerns which go far beyond unemployment. People in these states are not unemployed in common sense as it is used in the United States and Europe. Most of them are not employed in a normal wage-paying job and are part of a barter economy, while others have regular wage-paying jobs.
The implications of unemployment reflect in both social and economic life. First of all, it reduces an income for individuals, decreases the sum of taxes collected by governments, and increases government spending on social projects. In the long-term unemployment adversely affects social cohesion and prevents economic growth. Extremely high unemployment go beyond the national borders of the particular country because decreasing employment in one country drives to a reduction in demand for exports from the trading partners.
All in all, with reference to the recent forecasts, the global unemployment will rise by 3.4 million in two years. Therefore, economies need to do everything in order to reduce this rate. There is no common determined way for unemployment reduction. The most effective cure for the labor market in short-term for the government is supporting recovery in demand. In the long-term, there should be more targeted policies which focus on such issues as the jobs dimension for the economic policymakers and balanced growth in incomes. Moreover, inflation and fiscal deficits should be taken into account while policies developing process as well.
References
- Farrell, S. (2016). Global unemployment to rise by 3.4 million in two years, report says. The Guardian. Guardian News and Media.
- International Labour Organization. (2016). Global unemployment projected to rise in both 2016 and 2017. World Employment and Social Outlook – Trends 2016.
- Pasquali, V. (2015). Unemployment Rates Around the World. Global Finance Magazine.
- Patton, M. (2015). The Five Highest Unemployment Rates In The World. Forbes. Forbes Magazine.
- Sedghi, A. (2015). Global unemployment forecast to hit 212m – country by country breakdown. The Guardian. Guardian News and Media.