Presentation topic on unemployment .pptx

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1. Unemployment

2. Introduction The term unemployment refers to a situation where a person actively  searches for employment  but is unable to find work. Unemployment is considered to be a key measure of the health of the economy. The most frequently used measure of unemployment is the  unemployment rate . It's calculated by dividing the number of unemployed people by the number of people in the labor force. Unemployment is a key economic  indicator  because it signals the ability (or inability) of workers to obtain gainful work and contribute to the productive output of the economy. More unemployed workers mean less total economic production. The unemployment definition doesn't include people who leave the workforce for reasons such as retirement, and higher education

3. Unemployment occurs when workers who want to work are unable to find jobs. High rates of unemployment signal economic distress while extremely low rates of unemployment may signal an overheated economy. Unemployment data is collected and published by government agencies in a variety of ways. Many governments offer unemployed individuals a small amount of income through unemployment insurance, as long as they meet certain requirements. Categories of unemployment While the definition of unemployment is clear, economists divide unemployment into many different categories. The two broadest categories are voluntary and involuntary unemployment. When unemployment is voluntary, it means that a person left their job willingly in search of other employment. When it is involuntary, it means that a person was fired or laid off and must now look for another job

4. Types of Unemployment Voluntary and involuntary unemployment can be broken down into four types. We highlight them below. Frictional Unemployment This type of unemployment is usually short-lived. It is also the least problematic from an economic standpoint. It occurs when people voluntarily change jobs. After a person leaves a company, it naturally takes time to find another job. Similarly, graduates just starting to look for jobs to enter the workforce add to frictional unemployment. Frictional unemployment is a natural result of the fact that market processes take time and information can be costly. Searching for a new job, recruiting new workers, and matching the right workers to the right jobs all take time and effort. This results in frictional unemployment.

5. Cyclical Unemployment Cyclical unemployment  is the variation in the number of unemployed workers over the course of economic upturns and downturns, such as those related to changes in oil prices. Unemployment rises during recessionary periods and declines during periods of economic growth. Preventing and alleviating cyclical unemployment during recessions is one of the key reasons for the study of economics and the  various policy tools  that governments employ to stimulate the economy on the downside of business cycles. Structural Unemployment Structural unemployment  comes about through a technological change in the structure of the economy in which labor markets operate. Technological changes can lead to unemployment among workers displaced from jobs that are no longer needed. Examples of such changes include the replacement of horse-drawn transport with automobiles and the automation of manufacturing.

6. Causes of Unemployment Economic Fluctuations Economic fluctuations are a significant contributor to unemployment, which acts as a barometer for the health of a job market. During periods of economic downturn or recession, businesses face declining profits, reduced consumer spending, and often diminishing markets. This can lead to cost-cutting measures, including layoffs or hiring freezes, as companies strive to maintain financial stability. Conversely, in times of economic growth or expansion, the increased demand for goods and services often leads to job creation, as businesses need more hands to meet consumer demand. These cyclical changes directly influence the employment rate, making economic fluctuations a fundamental factor in the rise and fall of unemployment levels. Technological Advancement Technological advancement, while driving progress and efficiency, can lead to  structural unemployment . As industries innovate and adopt new technologies, certain jobs become obsolete, and demand for the related skills diminishes. This shift can lead to a mismatch in the job market, where there’s a surplus of workers with skills that are no longer needed and a shortage of workers with in-demand skills. While technological progress also creates new types of jobs and industries, these transitions can be challenging and often leave gaps in employment.

7. Globalization The globalization of world economic activity means jobs often move to places where labor is cheaper and/or where specific skills are available. We especially see this movement in manufacturing and certain service sectors. This movement benefits some economies and leads to job losses in others.  Lack of Access to Education and Training Education and training is an enabler that helps people acquire the skills and knowledge necessary to compete in the job market. Without these educational foundations and opportunities for skill development, individuals can struggle to meet the demands of employers or adapt to changing job market requirements, resulting in higher rates of unemployment. This issue is particularly acute in areas with limited educational resources, where people may not have opportunities for personal and professional development, or in circumstances where education and training costs are prohibitively high. Addressing this gap is crucial not just for the individuals affected, but also for the broader economy, as a highly skilled workforce is essential for economic growth, innovation, and improved economic mobility.

8. Effects of Unemployment Unemployment has profound and far-reaching effects on many levels. For individuals, the loss of employment often leads to financial instability and can have severe psychological effects, including stress, anxiety, and a diminished sense of self-worth. The lack of a regular income makes it difficult to meet basic daily needs and can contribute to a decline in overall quality of life.  Long-term unemployment  can also erode professional skills and make re-entry into the job market more challenging. On an economic level, high unemployment rates reduce consumer spending, a key driver of economic growth. With fewer people earning wages, there’s a decrease in the demand for goods and services, which can lead to a cycle of reduced production, further layoffs, and economic stagnation. Unemployment also places a heavier burden on government resources through increased reliance on social welfare programs and lost tax revenue. For local communities, high unemployment can lead to a range of social issues. It can increase rates of crime and social unrest, and lead to higher poverty levels. The erosion of community cohesion and a sense of hopelessness can persist long after employment rates have recovered, leaving lasting scars on communities. 

9. Innovative Solutions to Unemployment Addressing unemployment requires a multifaceted approach. Strategies include: Skills training and job placement:  Vocational education and training can equip individuals with the skills needed in the modern job market. It’s essential for training programs to be closely aligned with industry needs and link directly with employers for placement. Support for SMEs:   Small and medium-sized enterprises (SMEs) are significant employment generators. Supporting SMEs with incentives and resources can lead to job creation. Encouraging entrepreneurship:   Entrepreneurship can drive economic growth and create jobs. Providing the right environment, funding, and support can encourage more individuals to start their businesses.