Singaporean Woes: Unemployment - Coggle Diagram
Singaporean Woes: Unemployment
What is unemployment and What causes it to occur
Happens when when the number of workers who are able and willing to work exceedsthe number of jobs available.
When the supply of labour exceeds the demand for labour in the labour market.
Unemployment is where one is willing, able and actively seeking jobs even when he/she is jobless.
Formulas for labour force & unemployment rate
Labour Force Participant Rate:
𝐿𝐹𝑃𝑅=𝐿𝑎𝑏𝑜𝑢𝑟 𝐹𝑜𝑟𝑐𝑒 𝑊𝑜𝑟𝑘𝑖𝑛𝑔 / 𝑎𝑔𝑒 𝑝𝑜𝑝𝑢𝑙𝑎𝑡𝑖𝑜𝑛 ×100
𝑁𝑜. 𝑜𝑓 𝑃𝑒𝑜𝑝𝑙𝑒 𝑢𝑛𝑒𝑚𝑝𝑙𝑜𝑦𝑒𝑑 / 𝐿𝑎𝑏𝑜𝑢𝑟𝐹𝑜𝑟𝑐𝑒×100
Labour Market Equilibrium
The labour market refers to the supply of and demand for labour where employees
Consist of Labour Demand Curve and Labour Supply Cruve
The Labour Market is in Equilibrium when demand curve intercept supply curve.
Equilibrium means the demand and Supply of labour are equal
There is also a mandated price floor known as minimum wage
Will most probably be set above the equilibrium wage
At the higher wage rate, there will be more workers willing to supply their labour than firms demanding labour due to the price increase in hiring.
Leading to a surplus of workers without jobs and thus unemployment.
Types of Unemployment
However, there will ALWAYS be some frictional and structural unemployment even when the economy is at its full employment .
When an economy is operating at the full employment level, there is NO cyclical unemployment
This level of unemployment is also known as the Natural Rate of Unemployment