TOPIC 2 - NSTP

• Work - very essential in order for us to live. It has been in existence from the time God created the world.
• In Genesis 1:26, 28 and 31, " Then God said, Let us make man in our image, in our likeness, and let him rule over the fish of the sea and the creatures that move along the ground."
• Unemployment - percentage of the labor force unemployed at any time. It is endemic in very single free market economy.
• Unemployment - occurs when a person who is actively searching for employment is unable to find work. Often used as a measure of the health of the economy.
• Unemployment Rate - most frequent measure of unemployment. It is the number of unemployed people divided by the number of people in the labor force.
• Unemployment - key economic indicator because it signals the ability ( or inability ) of workers to readily obtain gainful work to contribute ti the productive output of the economy.
• An economy with high unemployment has lower output without a proportional decline in the need for basic consumption.
• Unemployment - occurs when workers who want to work are unable to find jobs, which lowers economic output; however, they still require subsistence.
• High rates of unemployment are a signal of economic distress, but extremely low rates of unemployment may signal an overheated economy.
• Unemployment can be classified as frictional, cyclical, structural, or institutional.
• Unemployment data - collected and published by government agencies in a variety of ways.
• Frictional Unemployment - type of unemployment caused by workers voluntarily changing jobs and by temporary layoffs. It is short-lived.
• Frictional Unemployment - it is also the least problematic from an economic standpoint. 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, resulting in frictional unemployment.
• Structural Unemployment - this is unemployment of workers whose skills are not demanded by employers; they lack sufficient skill to obtain employment, or they cannot easily move to locations where job is available.
• Structural Unemployment - comes about through technological change in the structure of the economy which labor markets operate.
• Cyclical Unemployment-Business-Cycle - this is the type of unemployment caused by insufficient total spending ( or by insufficient aggregate demand ).
• Cyclical Unemployment - 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 - one of the key reasons for the study of economics and the purpose of the various policy tools that governments employ on the downside of business cycles to stimulate the economy.
• Institutional Unemployment - unemployment that results from long-term or permanent institutional factors and incentives in the economy.
• Industrial Psychologists - describe various stages of the trauma in which the unemployed persons have experienced the loss of jobs as bereavement.
• Shock - feeling of humiliation. A real blow to the self-image.
• Denial - the unemployment person starts to search for an explanation why he is hired. Denial from reality protects him for the deep hurt.
• Frustration - the make believe denial is starting to shatter.
• Depression and Pessimism - there can be anticipation and a feeling of optimism at the beginning of the unemployed search for a job.
• Despair - after several years without work, the unemployed feels hopeless and bitter. He is demoralized and dehumanized because he cannot find a job.
• Resignation - a marked feeling of inferiority and submissiveness.
• When unemployment rates are high and steady, there are negative impacts on the long-run economic growth.
• Unemployment - wastes resources, generates redistributive pressures and distortions, increases poverty, limits labor mobility, and promotes social unrest and conflict.
• Demand Side Solutions - many countries aid unemployed workers through social welfare programs. Individuals receive unemployment benefits. An example of a demand side solution is government funded employment of the able-bodied poor.
• Supply Side Solutions - labor market is not 100% efficient. It remove the minimum wage and reduce the power of unions.
• Supply Side Policies - deal with more micro-economic issues. Don't aim to boost overall aggregate demand but seek to overcome imperfections in the labour market and reduce unemployment caused by supply side factors.
• Supply Sides Unemployment includes, frictional, structural, and classical ( real wage ).
• Education and Training - aim is to give long-term unemployed new skills which enable them to find jobs in developing industries, retrain unemployed steel workers to have basic IT skills which help them find work in the service sector.