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CHAPTER 9 | UNEMPLOYMENT - Coggle Diagram

- - - - because of
        
        imperfect information (of both employers and bout-to-be-employees) resulting in time lag between leaving prior employment (by choice or not) and rehiring of suitable candidates
  - - - because of
        
        change in patterns of demand
        
        certain industries experience declining demand
        
        leads to
        
        change in conditions of supply
        
        technological
        
        introduction of labor-saving technology, which;
        
        does away with or reduces the quantity of labor needed for certain jobs
        
        creates job positions that the unemployed are incapable of occupying due to occupational immobility
        
        regional
        
        geographical immobility of labor leads to unequal distribution of employment between physical areas
        
        outsourcing
        
        movement of production to foreign sector
  - - - because of
        
        economic recessions, which decreases output, then need for workers, cutting employment
  - - - because of
        
        actual seasons (ski resorts, harvest seasons, waiting for volcanos to explode farmland etc.)
        
        traditions and customs (shops staffed by on-holiday students etc.)
  - - - because of
        
        real wages for jobs being forced above market clearing level
        
        traditionally by trade unions, wage councils
- - - - competition from newly industrialized or emerging economies
    - - greater integration within global economy and reliance on external demand
    - - rapid advancements in technology drives faster cycle of renewing capital and production processes
  - - - poor transport and communication infrastructure amplifies time lag of imperfect information
      - poor government planning and coordination means the economy is ill-prepared to meet the requirement of expansion
    - - primarily agricultural based industries (crops, fish etc.)
    - - developed countries are principal export markets, susceptible to external changes
    - - generally low demand and output, vicious cycle of low output, income, and consumption
- - - - establishment or improvement of job seeking platforms, employment exchange services, or industrial relations
        
        to improve efficiency of job matching to reduce time lag between jobs
    - - government supply side policy; such as upskilling labor force, restructuring the economy, or subsidizing wages in declining industries (not very good)
        
        to reduce occupational immobility to enable displacement of workers into expanding industries
    - - government employing appropriate expansionary or contractionary monetary or fiscal policy
        
        to manipulate demand to offset the fall/rise in aggregate demand
      - government supply management policy
        
        to increase short-run aggregate supply to bring employment closer to productive capacity
    - - work-sharing, rearrangement of production process for even production, alternative production lines, pricing system
        
        to give workers something to do all year round
    - - government restricting powers of wage unions and relaxing wage policies
        
        to set wages at more realistic levels and to reflect the changing demand and supply conditions