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Chapter 9 :Unemployment, : - Coggle Diagram

- - - - Policies to reduce frictional unemployment
        
        Minimized with better job information. E.g. MyCareersFuture Reduce time spend for unemployed workers to look for job opportunities
  - - - Main causes of structural unemployment
        
        Changes in Conditions of supply - technology unemployment ( same level of output produced with fewer workers, fall in demand for labour) Regional unemployment (some regions have full employment while another regions have unemployment)
        
        Policies to cope with structural unemployment
        
        Supply-side policies
        
        Using subsidies & Grants - skills upgrading to encourage the workers to develop skills
        
        Change in Demand pattern - Industries experience declining demand. Do not have the skills to get a job in other industries . Fall in AD leads to cyclical unemployment
  - - - Policies to cope with cyclical unemployment
        
        Demand management policies - either expansionary monetary OR fiscal policy.
        
        Supply management policies can help to reduce and prevent it from getting worse. Increase SRAS by reducing structural rigidities brings economy closer to full employment
  - - - Main causes of seasonal unemployment
        
        Annual Weather cycle
        
        Policies to cope with seasonal unemployment
        
        Working sharing (available employment is spread equally among workers)
        
        Rearrangement of production process so that production is spread evenly throughout the year. Stocks to be carried during off-peak seasons.
        
        Utilizing off-season facilities for other purpose. E.g. hotels can hold conferences
        
        Traditions and Customs
  - - - Excess labour supply than labour demand
      - Policies to cope with real wage unemployment
        
        Restricting power of trade unions in excessively demanding wage increase. Controlling wage cost.
- - - - Loss of output of G/S - unemployment cause a wastage of resources, loss in production.The loss in output that could have been produced by the unemployed means that welfare is not maximize.
        
        If unemployment is prolonged, with people leaving the labour market after losing motivation to search for work, negative effect on SRAS and damage economic’s potential growth.
    - - Fewer people working, lower incomes tax collected. Unemployed likely to spend less, lowers GST. Increase in Govt spending on unemployment benefits while Govt revenue is decreasing would cause a budget deficit
        
        Increase risk of Govt raising taxes or reduce spending on other aspects (E.g. Public good, defense, healthcare)
    - - Loss of scare resources used in training workers who arer unemployed
      - Workers who remained unemployed for a long period of time will face an erosion of skills.
        
        Reduce their chance of getting employed in the future, affecting potential growth as quality of workforce worsens, declining productivity.
  - - - Rise in unemployment, rise in crimes
      - Worsening in health condition
        
        Lower life expectancy
      - Lower National Income