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Employment, Unemployment, Causes and Consequences
Employment, Unemployment, Causes and Consequences
Employment, Unemployment, Causes and Consequences
Employment
• series of tasks in exchange for a monetary reward called salary
• Performance of a work activity that generates economic income or for which remuneration or salary is received.
Types of Jobs:
Formal employment:
Formal employment is that provided by the State or private initiative;
• pays taxes to the state
• is a subject of statistics
• it's legal
• brings together the public sector and the modern private sector, generally covered by protection systems
informal employment
• It groups together non-professional self-employed workers, micro-entrepreneurs and domestic workers.
• Traditionally, informal activities have been characterized by a lack of social protection and less stability than that provided by formal
jobs.
• Even if he does not carry out illicit activities, he can anchor in illegality (street vendor, for example, piracy distributors, chicleros,
"bullfighters", windshield wipers, etc., etc.)
Definition of in
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Unemployment
Unemployment is the negative
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side or lack of the right to work. Any person : person who makes up the active population of a country, that
is, who is in ■ physical and mental conditions and of the age required to start a relationship ! labor and did not fulfill the necessary
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Types of Unemployment :
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1. Structural Unemployment
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Structural unemployment technically corresponds to a mismatch between supply Ne
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and demand for labor. This type of unemployment is more pernicious than
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seasonal unemployment and frictional unemployment. In this type of unemployment, the
supply characteristic is usually different from the demand characteristic, which makes it
probable that a percentage of the population will not be able to find employment.
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sustained manner. 11 3
It refers to workers who go from one job to another to improve themselves. Their unemployment is temporary and
does not represent an economic problem. Frictional unemployment is relatively constant.
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4. Seasonal A
On the one hand, seasonal unemployment is unemployment that varies with the seasons of the year due to seasonal fluctuations in
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the supply or demand of labor. We speak of seasonal unemployment, on the other hand, to refer to that which occurs due to the
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fluctuating demand that exists in certain activities, such as agriculture, for example.
5. Long Term Unemployment
A person registered as a job seeker, uninterruptedly, for a period of more than one year, is considered long-term unemployed. Y
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Long-term unemployment has a negative effect on the capacity of the labor market, in the classic model, to automatically restore full
employment. In long-term unemployment, the market is distorted since this type of unemployed do not compete with employees, A
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because companies do not consider them "eligible", to the extent that they understand that they are not capable of replacing those He an
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who are performing. the same tasks and therefore do not put downward pressure on salaries and do not redirect the labor market r
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Causes of
Mankiw and Rabasco (p.437)unemployment
cite the following four factors as the causes of unemployment:
> The first cause of unemployment is the time it takes for workers to find the job that best
suits their tastes and qualifications. Unemployment insurance is a public program that,
although it protects workers' income, increases the
a public program that reduces
the amount of frictional > The second reason why an economy always has some
unemployment.
unemployment is minimum wage legislation. This legislation, by forcing unskilled and
inexperienced workers to pay a wage higher than the equilibrium wage, increases the
quantity of labor supplied and reduces the quantity demanded. The resulting excess work
represents unemployment.
> The third cause of unemployment is the market power of unions. When they achieve
higher than equilibrium wages in the unionized sectors, they create excess work.
> The fourth cause of unemployment is suggested by the theory of efficiency wages.
According to this theory, it is profitable for companies to pay higher than equilibrium
wages. High wages can improve workers' health, reduce their turnover, improve their
quality and increase their effort.
Consequences of unemployment:
The entire society agrees that unemployment is a serious problem that causes losses of all kinds, according to Muñoz (p.100) the main costs of
unemployment are:
Loss of production and income . The loss of a job causes an immediate loss of income and production. These losses are
devastating for the people who endure them and make unemployment a terrifying situation for everyone. Unemployment insurance offers
some protection, but it does not provide the same standard of living that could be achieved by having a job.
Loss of human capital. Prolonged unemployment can permanently damage a person's employment prospects. For example, a
manager loses his job when his employer downsizes the company. If you need an income, you can become a taxi driver. After a year in this job
you discover that you cannot compete with recent MBA graduates. You may eventually be rehired as a manager, but in a small company with
a low salary. It has lost part of its human capital.
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Consequences of unemployment:
• Reduction of income.
• Restriction of the variety of personal life.
• Reduction of goals and activities.
• Decrease in decision making.
• Less development of knowledge and personal abilities.
• Exposure to psychologically destabilizing activities.
• Increased insecurity about the future.
• Restriction of interpersonal relationships.
) • Loss of position and social status.
FOR THE PEOPLE FOR THE ECONOMY
UNEMPLOYED FOR SOCIETY WHOLE
The variations in the unemployment rate are obtained through a procedure known as random sampling of the population, which is done in order
to divide it into groups according to their employment situation.
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