• “Joblessness caused not by lack of demand, but by changes in demand patterns or
obsolescence of technology, and requiring retraining of workers and large
investment in new capital equipment”.
Case Study: The decline of the coal mining industries in South Wales
New industries developed abroad.
Manufacturers wanted maximise their profits at the expense of their workers.
Cleaner power sources were discovered.
• “The difference between before-tax and after-tax wages. The
tax wedge measures how much the government receives as a
result of taxing the labour force”.
• In certain countries a tax wedge can increase if their is an
increase in a employees income.
• Tax Wedges may give money to the government but it causes
inefficiencies in the market.
Centralised Wage Bargaining
• Centralised Wage Bargaining is a system set in place so that
Trade Unions fight for employees to get real wage rates.
• They also fight for low and fair tax rates for their members.
Policies To Reduce Unemployment
• Reform The Social Welfare System
• Reduce The Tax Wedge
• Intensify Education and Training
Reform The Social Welfare System
• This years budget has seen a large cut in the social welfare.
• Joan Burton told Ireland that there would be a reduction of
20,976 off the live register.
• Too many people have become dependant on the dole and
this new social welfare scheme should stop that.
Reduce The Tax Wedge
• For our country to reduce unemployment, we must reduce
our tax wedge.
• For example, this year income tax has stayed the same.
• However, if Income Tax had risen, what would happen?
Intensify Education and Training
• To reduce unemployment the government should be
introducing specific skill based courses in schools and
• Children, young adults and mature students should be given
the opportunity to learn specific IT based skills.
• For Example, in certain schools there is a programme called
• With courses like LCVP, we will see a far less drop out
rate, which will in turn see more graduates and less people
Today Ben and I defined: a. Replacement Ratio
b. Poverty Trap
c. Unemployment Trap
d. Cyclical Unemployment
e. Structural Unemployment
f. Tax Wedge
g. Centralised Wage Bargaining
We also discussed the three causes of Irish Unemployment
since 2008 and three policies that could be used to reduce
unemployment in Ireland.
Carai Mc Mahon