Measure to Reduce Unemployment

A. Frictional Unemployment y Frictional unemployment arise from normal labour turnover and imperfect information on availability of jobs y This can be reduce by reducing labour immobility by providing information on jobs to ensure quick and efficient placement of people into job vacancies. Measure to reduce frictional unemployment in Singapore Community Development Council(CDC) organizes job matching to provide more information on job availability and match workers to suitable jobs at the earliest possible time. Singapore Workforce Development Agency (WDA) provide job search service and labour market information through a strong networking of companies. Online Job search Effectiveness Depend on the willingness of workers to take up job offers that are available. Workers may avoid jobs that are demanding and over their criteria. Costly- Job fair. Hence there are opportunity incurred.

y y y

B. Structural Unemployment y Structural unemployment is when there is a mismatch between the skills that workers have and what the firms want. y This can be resolve by supply-side policies where workers are equipped which the relevant skills and thus remain as employable. Measure to reduce structural unemployment in Singapore y Skills Programme for Upgrading and Resilience (SPUR) are run by WDA and Employment & Employability Institute (E2 I) to upgrade workers skill. Hence, ensuring that workers constantly have the skill for the knowledge based economy. y 6 years compulsory education ensure that we have a ready pool of workforce with basic literacy skills Effectiveness y Time lag Between the implementation and effectiveness of the supply side policies y Firms may not be willing to send workers for training as there will be loss of output during training. y Improvement in technology may lead to an increase in unemployment if there is replacement of labour with capital y Drain Resources

C. Cyclical Unemployment y Arises due to a fall in the level of aggregate demand. Hence demand management policies such as fiscal and monetary policies are more suitable y (Refer to previous chapter and need to add in the link between the policies and unemployment) y Extra Information: y Government gives payment such as Workfare Income Supplement Scheme to increase disposable income so as to raise consumption expenditure. y Need to add in such as: the rise of AD would bring about a shortage of good s and services. Hence is an incentive for firms to increase production, leading to multiple increase in national output, national income and employment, thus reducing cyclical unemployment. Trade Policies y Protectionist policies such as tariffs on imports. With less import, the country would switch to domestically produced goods, thereby protecting to domestic employment. y For Singapore, the benefits of increasing trade and investments are immense, due to the Free Trade Agreements with many countries such as China and the US y Diversification of Singapores export market will also help to raise her foreign direct investment. Conclusion For export dependent countries like Singapore, where cyclical unemployment is largely due to a fall in external demand, a rise in government expenditure to smoothen out the downward economic trend will not be sufficient. As such, a depreciation of its currency may be necessary to boost its export competitiveness during times of global economic slowdown. There is also a need to widen its export markets to include emerging economies like Brazil, Russia, India, China in order to reduce reliance on traditional trading partners like the US, Europe and Japan.