INTRODUCTION
The society is aware that unemployment negatively affects the economy and the quality of life of many people in general. Many efforts had been put into reducing unemployment along with the high cost that comes with these efforts. Due to the apparent effect of unemployment, many people often propose on how unemployment may be lowered without thinking much about the many factors that come into play with regards to unemployment. A good proposal should not only focus on the solutions, but on the underlying principles as well. Likewise, this paper will focus on concepts that are relevant to unemployment, particularly structural and cyclical unemployment, and offer solutions that may be applied.
BODY
Unemployment. Essentially, unemployment is the state wherein individuals are unable to acquire jobs. There is no single scheme used to classify unemployment, but people often use the traditional classification. This classification is based on the causes of unemployment and may be used to address unemployment using different approaches. In the traditional classification, the four main unemployment types are cyclical, structural, frictional, and seasonal. A cyclical unemployment refers to the unemployment that result from the bad economic condition of a country due to the low demands in the market. A structural unemployment refers to the mismatch between the jobs that are available or near a person and the skills of an individual. A frictional unemployment refers to the unemployment that result from a person looking for a better job or a first job. Lastly, a seasonal unemployment refers to the decline in the job due to differences in season. In essence, the jobs most affected by seasonal unemployment are agriculture and tourist based jobs. Moreover, since economists had claimed that structural unemployment is the most prominent type of unemployment nowadays, this paper will focus on how structural and cyclical unemployment may be lowered (Hughes & Perlman 26-31).
Relevance of Lowering Unemployment. All types of unemployment, including structural unemployment, have many negative effects on the citizens of a country and should be minimized. Firstly, if one is unemployed, the government loses a portion of their tax revenue. This may leave the government with no choice, but to increase the taxes they collect from the existing employed individuals. Likewise, the government may also minimize their spending on relevant matters such as public health, education, and the like to compensate for the loss. Moreover, unemployment has more financial costs that the government shoulders. Unemployed individuals are dependent on the government in some countries. The government may pay for several benefits that cost a considerable amount of money. These benefits may be provided so that unemployed individuals may look for a new job and allow them to acquire their necessities while they cannot provide for themselves. The more people get unemployed, the more this cost increase. This leaves less money for other important matters such as the public health or development of relevant infrastructures. Thus, many governments have to deal with the additional cost of unemployment and the decrease in their earnings (“The Effects of Unemployment on Society and the Economy”).
The spending power of unemployed individuals becomes reduced. This implies that the quality of life of an unemployed individual and the people that depend on him or her lowers. This may include compromising their nutrition and health. Furthermore, a reduced spending power hurts the economy and affects the whole society (“The Effects of Unemployment on Society and the Economy”).
As unemployment increases and prolongs, the society suffers. The mental health becomes affected negatively. The frustration that comes with unemployment may cause individuals to experience problems with their self-esteem or self-worth, depression, and helplessness. The tension brought by unemployment is likewise detrimental to the general health of individuals. On the other hand, the tension in the homes of unemployed people is common and had been noted to increase divorce or suicide. Crime rate also increases as people become desperate to make their lives more comfortable (“The Effects of Unemployment on Society and the Economy”).
Combating Unemployment through Monetary Policies and Training Programs. Frictional unemployment and seasonal unemployment are generally unavoidable due to their nature. Moreover, these types of unemployment are also not as prominent as cyclical and structural unemployment. Thus, the solutions that will be proposed in this paper will center on cyclical and structural unemployment.
As stated earlier, cyclical unemployment refers to the unemployment that result from the bad economic condition of a country due to the low demands in the market. This low demand may have started when people consume less which may also be due to their reduced spending power due to unemployment. Basically, there is a cycle which revolves around unemployment, the economy, and the lowered demand. No factory will continue to operate and hire workers when people deem their products unnecessary or if the public had made alternatives that lowered their demand for the factory’s products. The solution that may be applied to lower cyclical unemployment is the government intervention through monetary policies. In essence, monetary policy refers to the control of the country of the money supply which targets the interest rates in the market to make sure that there is stability and confidence to spend. The federal government lowers the interests in the price of goods and services so that people may be able to borrow more money that may be used to purchase more goods or avail of services. The confidence to spend brought about by these lowered interest gives way for more jobs that improve the economy. This approach stimulates the market indirectly and allows the economy to increase the demands, causing more jobs to open. Monetary policies have clear effects to lower unemployment. However, it is a solution that cannot be depended upon on its own. While monetary policies can make the prices of goods and services in the market stable, there this approach does not work to stimulate the economy directly and lower unemployment permanently (Brash 25). Thus, training programs should also be proposed in order to lower unemployment.
Structural unemployment is the most prominent type of unemployment. Although the government may put policies into place to stimulate the economy, a mismatch in the skills of the worker and the jobs available in his vicinity will not be solved. The government may help increase the demand for a skill or job, but a mismatch would readily put their efforts to waste. An increase in the demand for food products without the consideration that there are no available workers for the job in an area simply makes things worse. As such, training programs should be done. This training programs may be hosted by the government. The government may pay for firms that can provide the necessary trainings for individuals that are structurally unemployed. For instance, since the society have an increasing demand for globalization and technological advancement, people should be trained in information technologies and the like. The demand for workers that are able to understand the complexities of today’s technology is increasing and the government should consider making their citizens competitive globally. Moreover, these training programs may also cover aiding people in continuing their education. In a society where there is uncertainty in the economy, the skilled workers are at an advantage and the government, together with the citizens, should work on it (Edgmand, Moowaw & Olson).
The government plays a huge part in making sure that unemployment is lowered. The government should not only make policies to make their nation a safer nation, but also policies that can elevate the quality of life of their people. After all, there is a correlation between the crime rate of a country and its unemployment rate. Through appropriate policies that may stimulate the economy and increase the demands for products and services, and the continued training programs that produce competitive workers, unemployment may be lowered. Cyclical and structural unemployment are common and these proposed solutions address them both.
Moreover, the government cannot combat unemployment on its own. The cooperation of private firms and the people themselves are required to make these solutions successful. No matter how efficient the plan may be to address unemployment, if the citizens continue to put the blame on others and refuse to do something about their unemployment, then there can be no true success.
CONCLUSION
Employment is essential to keep a nation functioning flawlessly. The government may likewise intervene to lower unemployment and prevent its negative implications in the well-being of the people from taking place. Through their monetary policies and training programs to make people suitable for certain jobs, then unemployment may be lowered. These solution are of course unable to eliminate unemployment since frictional and seasonal unemployment are generally unavoidable, but these solutions make a difference. These solutions can effectively lower unemployment.
Works Cited
Brash, Donald. "The Role of Monetary Policy: Where Does Unemployment Fit In?" Federal Reserve Bank of Kansas City. Web. 1 June 2016.
Edgmand, Michale, Ronald Moowaw, and Kent Olson. Economics and Contemporary Issues. Dryden Press. 1996. Print.
Hughes, James J., and Richard Perlman. The Economics of Unemployment: A Comparative Analysis of Britain and the United States. Brighton: Wheatsheaf, 1984. Print.
"The Effects of Unemployment on Society and the Economy." Job Interview & Career Guide. Web. 31 May 2016.
