Please enable JavaScript.

Coggle requires JavaScript to display documents.

Chapter 9:Unemployment (Types (Seasonal (Annual Weather Cycle (no snow…

- - - - no snow available at ski resorts during the summer > :arrow_down:DD for ski instructors> :arrow_up: unemployment
    - - e.g. CNY :
        :arrow_up: shopping for food >:arrow_up:DD for supermarket workers >:arrow_down: unemployment
  - - - Government sets a minimum wage law
        
        More supply of labour than demand for labour > Surplus of labour
      - Trade Unions bargain for higher pay
  - - - CAUSES
        
        Change in pattern of demand
        when demand falls in specific sectors permanently due to changes in consumer tastes and preferences or as a result of competition from other industries
        
        E.g.
        -increasing awareness about the effects of burning coal on the climate
        -change in consumers' tastes and preferences away from coal and towards bio-fuels
        -Demand for coal decreases
        -coal miners structurally unemployed
        
        Change in conditions of supply
        
        Technological Unemployment
        
        labour-saving technology used > fewer workers needed>decrease in demand for labour
        
        Regional Unemployment
        
        some regions experience full employment while others face unemployment
        
        Movement of industries to different location
        
        Developed country move production to developing country wheres there is low opp cost, esp when trade agreements have been signed
        
        e.g. US bicycle companies moved to China for production
  - - - They've just joined the labor market(graduates)
      - They resign or are fired from their current job
    - - Imperfect information -
        employers cannot immediately know skilled labour is available
        +
        unemployed labour cannot immediately find jobs which are suitable
        
        Time lag- qualified unemployed labour cannot immediately be hired by employers with suitable job openings
- - - - technological advancements are more rapid
    - - face competition from emerging economies (E.g. US and China)
    - - they have greater reliance on external demand from foreign countries
    - - Global Financial Crisis 2008-2009
        Unemployment rate: 2.2% increased to 3.0%
        Govt had to spend 20.5 billion:
        
        Jobs Credit (encourage companies to preserve jobs)
        
        Skills Programme for Upgrading and Resilience (retrain PMETS)
        
        Government Recruitment (govt hired more people)
        
        Workfare Income Supplement
  - - - Economies are usually agricultural-based
    - - Lack of transport and communication infrastructure > :arrow_down: geographical mobility of labour> regional unemployment
- - - - Unemployed people:
        
        spend less > :arrow_down: GST collected from them
        
        don't have to pay income tax > no income tax collected from them
        
        require unemployment benefits> :arrow_up: govt spending = budget deficit > :arrow_down: spending on public and merit goods
    - - prolonged unemployment> people lose motivation> permanently leave labour force > :arrow_down: size of labour force >:arrow_down: productive capacity > :arrow_down: LRAS
    - - unemployment= waste of resources(labour)> loss of output that could have been produced by the unemployed therefore welfare of society is not maximized and welfare loss to society is represented by output forgone