EMPLOYMENT

• Employment is a relationship between

two parties,
• usually based on a contract,
• one being the employer and
• the other being the employee
 Employer
• An employer is a person or institution that
hires employees or workers.
• Employers offer wages or a salary to the
workers in exchange for the
worker's work or labor.
• Wages paid for hours worked and salary paid
for the work done at a particular period.
 Employee
• An employee is a term for workers and
managers working for
a company, organization or community.
• Employees are the staff of the organization.
• Any person hired by an employer to do a
particular "job" is an employee.
 Categories of Employment
• There are four main types of employment
1. Employees
2. The self-employed
3. Unpaid family workers
4. Participants in government-funded training
schemes
 Categories of Employment

Source: http://www.economicsonline.co.uk/Managing%20the%20macro-economy%20graphs/Employment_diagram.png
 The Employment Rate
• The proportion of the working-age population
who are in employment.
• The working age population includes men
aged 16-64 and women aged 16-59.
 UNEMPLOYMENT
• The International Labour Organisation (ILO)
definition of unemployment is those aged 16
or over are unemployed if they are:
1. Out of work, want a job, have actively sought
work in the last four weeks and are available
to start work in the next two weeks.
2. Out of work, have found a job and are
waiting to start it in the next two weeks.
 Reasons for Unemployment
• Educational Status of people
• Government regulations
• Political Instability
• Cultural Barriers
 Costs of Unemployment
1. Opportunity cost
– Unemployment represents an opportunity cost
because there is a loss of output that workers could
have produced had they been employed.
– The government also spends more on unemployment
benefit.
2. Waste of resources
– Resources not employed are left idle, and this is a
waste to an economy – education and training costs
are wasted when individuals who have received
these benefits do not work.
 Costs of Unemployment
3. The Chancellor loses revenue
– The unemployed do not pay income tax, and pay
less indirect tax as they spend less.
4. Erosion of human capital
– Many skills are acquired at work, and being
unemployed means can mean fewer new skills
are acquired, and existing skills are lost.
 Costs of Unemployment
5. Lower incomes
– The unemployed have lower personal incomes
and lower standards of living. In addition, the
unemployed also experience relatively poor
physical and mental health.
6. Externalities
– There are further external costs associated with
unemployment, such as increased crime,
alcoholism and vandalism.
 Solutions for Unemployment
1. Job Creation
– This is the number one solution and by making
jobs, it will enable more people not to be idle.
2. Job Creation
– This is the number one solution
and by making jobs, it will
enable more people
not to be idle.
 Solutions for Unemployment
3. Increase work output
– Decreasing union affairs and motivating
employees.
 Group Members
• Dhanusha Dissanayake UWU/HTE/13/0005
• NuwanSri Wijerathne UWU/HTE/13/0049
• Viduranga Rathnayake UWU/HTE/13/0039
• Wasula Heshani UWU/HTE/13/0013
• Shashini Jayathilake UWU/HTE/13/0016
• Dulanji Yapa UWU/ENM/13/0054