This document discusses unemployment in Europe. It notes that unemployment rates have risen substantially in countries like France and Germany from around 2% in 1960 to over 10% recently. This rise can be traced to the interaction between long-standing generous unemployment benefits and a recent technological decline in demand for unskilled labor. Remedies discussed include reducing unemployment benefits, accepting lower-wage jobs, and incentivizing people to find work rather than remain unemployed. The document also compares unemployment variations between different European markets and notes differences in culture, policies, institutions and the role of unions.
Proposal to lower or remove the minimum wage to reduce firms\’ labor costs and reduce the unemployment rate by providing more low-skilled workers with jobs.
Governments of nations fix minimum wage with the aim of protecting the vulnerables of societies but is surprising that in many cases, it doesn't due to other factors.
Proposal to lower or remove the minimum wage to reduce firms\’ labor costs and reduce the unemployment rate by providing more low-skilled workers with jobs.
Governments of nations fix minimum wage with the aim of protecting the vulnerables of societies but is surprising that in many cases, it doesn't due to other factors.
Does raising minimum wage reduce poverty canada - may 2017paul young cpa, cga
Government is looking at ways to help people. The problem is forcing more rules and regulations will do little to help people as business will always look for ways to reduce cost.
These slides are from our January 2014 revision workshops for unit 3 microeconomics. They focus on some of the arguments surrounding the possible introduction of a £7 per hour national minimum wage in the UK
Basic ideas to explain unemployment, types of inflation, the CPI and the GDP. Some slides were borrowed from others off of the web because frankly, they were too good NOT to use.
At an event in Westminster chaired by new RF Executive Chair David Willetts, the Resolution Foundation presented early findings from its major new investigation into full employment. A panel of leading experts offered their take on the issue, followed by a Q&A.
Recent Specifications in Labor Unemployment in Sri LankaSanath Dasanayaka
mainly, this report examines on the current labor unemployment situation in Sri Lanka, reasons for labor unemployment, the government of Sri Lanka's actions for reducing unemployment and suggestions for bringing unemployment down in detail.
Does raising minimum wage reduce poverty canada - may 2017paul young cpa, cga
Government is looking at ways to help people. The problem is forcing more rules and regulations will do little to help people as business will always look for ways to reduce cost.
These slides are from our January 2014 revision workshops for unit 3 microeconomics. They focus on some of the arguments surrounding the possible introduction of a £7 per hour national minimum wage in the UK
Basic ideas to explain unemployment, types of inflation, the CPI and the GDP. Some slides were borrowed from others off of the web because frankly, they were too good NOT to use.
At an event in Westminster chaired by new RF Executive Chair David Willetts, the Resolution Foundation presented early findings from its major new investigation into full employment. A panel of leading experts offered their take on the issue, followed by a Q&A.
Recent Specifications in Labor Unemployment in Sri LankaSanath Dasanayaka
mainly, this report examines on the current labor unemployment situation in Sri Lanka, reasons for labor unemployment, the government of Sri Lanka's actions for reducing unemployment and suggestions for bringing unemployment down in detail.
Negociación y contratación con proveedores tecnológicos (ProTecs) [Ricardo De...Ricardo Devis
El origen de esta presentación fue la exposición, en 2004, a un grupo de empresarios vizcaínos, de diversas técnicas útiles en la contratación de proveedores tecnológicos y en la gestión de sus proyectos digitales asociados. Algunos aspectos han quedado ya obsoletos (9 años después), pero otros siguen perfectamente vigentes.
In this comprehensive chapter on unemployment, we embark on an explorative journey into the intricate dynamics of joblessness, aiming to dissect its multifaceted nature and illuminate pathways towards meaningful solutions.
We commence our inquiry by delineating the diverse manifestations of unemployment, discerning between frictional, structural, cyclical, and seasonal unemployment. Each form bears its distinct characteristics and implications, necessitating nuanced approaches for effective intervention.
Delving deeper, we unravel the underlying drivers of unemployment, which encompass a constellation of factors spanning technological innovation, globalization, mismatched skills, and economic fluctuations. Understanding these root causes is pivotal for devising targeted strategies that address the systemic barriers to employment.
Furthermore, we scrutinize the reverberating ripple effects of unemployment across individuals, families, and communities. From financial insecurity and diminished well-being to social disintegration and diminished human capital, the repercussions of joblessness permeate every facet of society, underscoring the urgency of concerted action.
Turning our gaze towards potential remedies, we embark on a quest to unearth pathways towards inclusive prosperity. We advocate for investments in education and skills development, fostering a dynamic workforce equipped to thrive in an ever-evolving labor market. Additionally, we champion the imperative of proactive labor market policies, including job creation initiatives, wage subsidies, and retraining programs tailored to the needs of vulnerable populations.
Moreover, we spotlight the catalytic role of entrepreneurship and innovation in engendering job growth and economic resilience. By cultivating an ecosystem conducive to enterprise, we nurture the seeds of innovation and empower individuals to chart their own pathways to prosperity.
Yet, our quest for solutions extends beyond policy prescriptions to encompass a broader ethos of social solidarity and collective responsibility. We underscore the imperative of forging partnerships across sectors, harnessing the collective ingenuity of government, business, civil society, and academia to forge a more equitable and inclusive future.
In sum, this chapter serves as a testament to the complexities of unemployment and the imperative of collective action. By embracing a holistic approach that addresses the structural roots of joblessness while fostering individual empowerment, we can aspire towards a future where every individual has the opportunity to realize their full potential and contribute meaningfully to society.
Financial Impacts of Federal Minimum Wage ChangeEquifax
In this Economic Trends Commentary White Paper, Equifax's Chief Economist Amy Crews Cutts explains that if inflation levels continue as projected, the real purchasing power of one hour of labor, at the current minimum wage of $7.25, will set a 62-year low by 2017. This commentary leverages aggregated data from various Equifax databases, including The Work Number®, a proprietary database of more than 220 million employer-direct payroll records.
Unemployment Problem & Solutions : Bangladesh Tourism ProspectFazlea Allahie
Unemployment Problem & Solutions: Bangladesh Tourism Prospect
If you want this copy of the document please contact send an email to the following id: fazleaallahie@gmail.com
Exploring Abhay Bhutada’s Views After Poonawalla Fincorp’s Collaboration With...beulahfernandes8
The financial landscape in India has witnessed a significant development with the recent collaboration between Poonawalla Fincorp and IndusInd Bank.
The launch of the co-branded credit card, the IndusInd Bank Poonawalla Fincorp eLITE RuPay Platinum Credit Card, marks a major milestone for both entities.
This strategic move aims to redefine and elevate the banking experience for customers.
how to sell pi coins in all Africa Countries.DOT TECH
Yes. You can sell your pi network for other cryptocurrencies like Bitcoin, usdt , Ethereum and other currencies And this is done easily with the help from a pi merchant.
What is a pi merchant ?
Since pi is not launched yet in any exchange. The only way you can sell right now is through merchants.
A verified Pi merchant is someone who buys pi network coins from miners and resell them to investors looking forward to hold massive quantities of pi coins before mainnet launch in 2026.
I will leave the telegram contact of my personal pi merchant to trade with.
@Pi_vendor_247
where can I find a legit pi merchant onlineDOT TECH
Yes. This is very easy what you need is a recommendation from someone who has successfully traded pi coins before with a merchant.
Who is a pi merchant?
A pi merchant is someone who buys pi network coins and resell them to Investors looking forward to hold thousands of pi coins before the open mainnet.
I will leave the telegram contact of my personal pi merchant to trade with
@Pi_vendor_247
Introduction to Indian Financial System ()Avanish Goel
The financial system of a country is an important tool for economic development of the country, as it helps in creation of wealth by linking savings with investments.
It facilitates the flow of funds form the households (savers) to business firms (investors) to aid in wealth creation and development of both the parties
Even tho Pi network is not listed on any exchange yet.
Buying/Selling or investing in pi network coins is highly possible through the help of vendors. You can buy from vendors[ buy directly from the pi network miners and resell it]. I will leave the telegram contact of my personal vendor.
@Pi_vendor_247
The European Unemployment Puzzle: implications from population agingGRAPE
We study the link between the evolving age structure of the working population and unemployment. We build a large new Keynesian OLG model with a realistic age structure, labor market frictions, sticky prices, and aggregate shocks. Once calibrated to the European economy, we quantify the extent to which demographic changes over the last three decades have contributed to the decline of the unemployment rate. Our findings yield important implications for the future evolution of unemployment given the anticipated further aging of the working population in Europe. We also quantify the implications for optimal monetary policy: lowering inflation volatility becomes less costly in terms of GDP and unemployment volatility, which hints that optimal monetary policy may be more hawkish in an aging society. Finally, our results also propose a partial reversal of the European-US unemployment puzzle due to the fact that the share of young workers is expected to remain robust in the US.
Empowering the Unbanked: The Vital Role of NBFCs in Promoting Financial Inclu...Vighnesh Shashtri
In India, financial inclusion remains a critical challenge, with a significant portion of the population still unbanked. Non-Banking Financial Companies (NBFCs) have emerged as key players in bridging this gap by providing financial services to those often overlooked by traditional banking institutions. This article delves into how NBFCs are fostering financial inclusion and empowering the unbanked.
US Economic Outlook - Being Decided - M Capital Group August 2021.pdfpchutichetpong
The U.S. economy is continuing its impressive recovery from the COVID-19 pandemic and not slowing down despite re-occurring bumps. The U.S. savings rate reached its highest ever recorded level at 34% in April 2020 and Americans seem ready to spend. The sectors that had been hurt the most by the pandemic specifically reduced consumer spending, like retail, leisure, hospitality, and travel, are now experiencing massive growth in revenue and job openings.
Could this growth lead to a “Roaring Twenties”? As quickly as the U.S. economy contracted, experiencing a 9.1% drop in economic output relative to the business cycle in Q2 2020, the largest in recorded history, it has rebounded beyond expectations. This surprising growth seems to be fueled by the U.S. government’s aggressive fiscal and monetary policies, and an increase in consumer spending as mobility restrictions are lifted. Unemployment rates between June 2020 and June 2021 decreased by 5.2%, while the demand for labor is increasing, coupled with increasing wages to incentivize Americans to rejoin the labor force. Schools and businesses are expected to fully reopen soon. In parallel, vaccination rates across the country and the world continue to rise, with full vaccination rates of 50% and 14.8% respectively.
However, it is not completely smooth sailing from here. According to M Capital Group, the main risks that threaten the continued growth of the U.S. economy are inflation, unsettled trade relations, and another wave of Covid-19 mutations that could shut down the world again. Have we learned from the past year of COVID-19 and adapted our economy accordingly?
“In order for the U.S. economy to continue growing, whether there is another wave or not, the U.S. needs to focus on diversifying supply chains, supporting business investment, and maintaining consumer spending,” says Grace Feeley, a research analyst at M Capital Group.
While the economic indicators are positive, the risks are coming closer to manifesting and threatening such growth. The new variants spreading throughout the world, Delta, Lambda, and Gamma, are vaccine-resistant and muddy the predictions made about the economy and health of the country. These variants bring back the feeling of uncertainty that has wreaked havoc not only on the stock market but the mindset of people around the world. MCG provides unique insight on how to mitigate these risks to possibly ensure a bright economic future.
What price will pi network be listed on exchangesDOT TECH
The rate at which pi will be listed is practically unknown. But due to speculations surrounding it the predicted rate is tends to be from 30$ — 50$.
So if you are interested in selling your pi network coins at a high rate tho. Or you can't wait till the mainnet launch in 2026. You can easily trade your pi coins with a merchant.
A merchant is someone who buys pi coins from miners and resell them to Investors looking forward to hold massive quantities till mainnet launch.
I will leave the telegram contact of my personal pi vendor to trade with.
@Pi_vendor_247
how to sell pi coins in South Korea profitably.DOT TECH
Yes. You can sell your pi network coins in South Korea or any other country, by finding a verified pi merchant
What is a verified pi merchant?
Since pi network is not launched yet on any exchange, the only way you can sell pi coins is by selling to a verified pi merchant, and this is because pi network is not launched yet on any exchange and no pre-sale or ico offerings Is done on pi.
Since there is no pre-sale, the only way exchanges can get pi is by buying from miners. So a pi merchant facilitates these transactions by acting as a bridge for both transactions.
How can i find a pi vendor/merchant?
Well for those who haven't traded with a pi merchant or who don't already have one. I will leave the telegram id of my personal pi merchant who i trade pi with.
Tele gram: @Pi_vendor_247
#pi #sell #nigeria #pinetwork #picoins #sellpi #Nigerian #tradepi #pinetworkcoins #sellmypi
Financial Assets: Debit vs Equity Securities.pptxWrito-Finance
financial assets represent claim for future benefit or cash. Financial assets are formed by establishing contracts between participants. These financial assets are used for collection of huge amounts of money for business purposes.
Two major Types: Debt Securities and Equity Securities.
Debt Securities are Also known as fixed-income securities or instruments. The type of assets is formed by establishing contracts between investor and issuer of the asset.
• The first type of Debit securities is BONDS. Bonds are issued by corporations and government (both local and national government).
• The second important type of Debit security is NOTES. Apart from similarities associated with notes and bonds, notes have shorter term maturity.
• The 3rd important type of Debit security is TRESURY BILLS. These securities have short-term ranging from three months, six months, and one year. Issuer of such securities are governments.
• Above discussed debit securities are mostly issued by governments and corporations. CERTIFICATE OF DEPOSITS CDs are issued by Banks and Financial Institutions. Risk factor associated with CDs gets reduced when issued by reputable institutions or Banks.
Following are the risk attached with debt securities: Credit risk, interest rate risk and currency risk
There are no fixed maturity dates in such securities, and asset’s value is determined by company’s performance. There are two major types of equity securities: common stock and preferred stock.
Common Stock: These are simple equity securities and bear no complexities which the preferred stock bears. Holders of such securities or instrument have the voting rights when it comes to select the company’s board of director or the business decisions to be made.
Preferred Stock: Preferred stocks are sometime referred to as hybrid securities, because it contains elements of both debit security and equity security. Preferred stock confers ownership rights to security holder that is why it is equity instrument
<a href="https://www.writofinance.com/equity-securities-features-types-risk/" >Equity securities </a> as a whole is used for capital funding for companies. Companies have multiple expenses to cover. Potential growth of company is required in competitive market. So, these securities are used for capital generation, and then uses it for company’s growth.
Concluding remarks
Both are employed in business. Businesses are often established through debit securities, then what is the need for equity securities. Companies have to cover multiple expenses and expansion of business. They can also use equity instruments for repayment of debits. So, there are multiple uses for securities. As an investor, you need tools for analysis. Investment decisions are made by carefully analyzing the market. For better analysis of the stock market, investors often employ financial analysis of companies.
how to sell pi coins effectively (from 50 - 100k pi)DOT TECH
Anywhere in the world, including Africa, America, and Europe, you can sell Pi Network Coins online and receive cash through online payment options.
Pi has not yet been launched on any exchange because we are currently using the confined Mainnet. The planned launch date for Pi is June 28, 2026.
Reselling to investors who want to hold until the mainnet launch in 2026 is currently the sole way to sell.
Consequently, right now. All you need to do is select the right pi network provider.
Who is a pi merchant?
An individual who buys coins from miners on the pi network and resells them to investors hoping to hang onto them until the mainnet is launched is known as a pi merchant.
debuts.
I'll provide you the Telegram username
@Pi_vendor_247
Turin Startup Ecosystem 2024 - Ricerca sulle Startup e il Sistema dell'Innov...Quotidiano Piemontese
Turin Startup Ecosystem 2024
Una ricerca de il Club degli Investitori, in collaborazione con ToTeM Torino Tech Map e con il supporto della ESCP Business School e di Growth Capital
5. Unemployment
An economic condition marked by the fact that individuals
who were actively looking for jobs within the past four
weeks still remain unhired, unemployment represents one of
the world’s biggest problems. As work plays an important
role in every person’s life, unemployment can cause serious
problems as many individuals would feel socially excluded,
apart from the financial problem.
6. Who is unemployed?
A person is unemployed if
he or she is on temporary
layoff , is looking for a job
or is waiting for start of new
job.
7. Employed, Unemployed, Not in the
Labor Force
Employed: A person is considered employed if he or she has spent most
of the previous week working at a paid job.
Unemployed: A person is unemployed if he or she is on temporary
layoff, is looking for a job, or is waiting for the start date of a new job.
Not in the Labor Force: A person who fits neither of these categories,
such as a full-time student, homemaker, or retiree, is not in the labor
force.
8. Labor Force
Labor force is the sum of employed and unemployed
worker
Labor force = number of employed + number of unemployed
L=E+U
Labor force
Number of
Employed
workers
Number of
Unemployed
workers
9. Unemployment Rate
Unemployment rate is the percentage of the labor force that
is unemployed:
Unemployment rate = (number of unemployed / labor force) X 100
10. Natural rate of unemployment
The economy’s natural rate of unemployment refers to
the amount of unemployment that the economy normally
experiences.
OR
The average rate of unemployment around which the
economy fluctuates.
11. Actual and Natural Rates of Unemployment in
the U.S.,1958-2002
11
Percent of labor force
10
9
8
7
6
5
4
3
2
1955
1960
1965
1970
1975
Unemployment rate
1980
1985
1990
1995
Natural rate of unemployment
2000
12. Job loss, Job finding &
Natural rate of Unemployment
The average rate of unemployment around which the economy fluctuates
is called the natural rate of unemployment. The natural rate is the rate
of unemployment toward which the economy gravitates in the
long run. Let’s start with some fundamental equations that will
build a model of labor-force dynamics that shows what
determines the natural rate.
Using this notation, the rate
L=E+U
of unemployment is U/L.
Labor force
Now, we’ll denote the
rate of job separation as s.
Let f denote the rate of job
finding. Together these determine the
rate of unemployment.
Number of
Unemployed
workers
Number of
Employed
workers
14. Labor Force and Unemployment Rate
A first model of the natural rate…
Notation:
L = # of workers in labor force
E = # of employed workers
U = # of unemployed
U/L = unemployment rate
15. Assumptions
1. L is exogenously fixed.
2. During any given month,
s = fraction of employed workers
that become separated from their jobs,
f = fraction of unemployed workers
that find jobs.
s = rate of job separations
f = rate of job finding
(both exogenous)
17. The Steady State Condition
• Definition: The labor market is in steady state, or
long-run equilibrium, if the unemployment rate is
constant.
• The steady-state condition is:
s E = f U
# of employed
people who
lose or leave
their jobs
# of unemployed
people who find
jobs
18. Finding the “EQUILIBRIUM”
Unemployment Rate
f U
= s E
= s (L –U )
= s L – s U
Solve for U/L:
(f U) + (s U)= s
(f + s) U
so,
U
L
L
= sL
s
s f
19. Example:
Each month, 1% of employed workers lose their jobs
(s = 0.01)
Each month, 19% of unemployed workers find jobs
(f = 0.19)
Find the natural rate of unemployment:
U
L
s
s f
0.01
0.01 0.19
0.05, or 5%
20. Policy Implication
Any policy aimed at lowering the natural rate of
unemployment
must either reduce the rate of job separation or increase
the rate
of job finding. Similarly, any policy that affects the rate of
job
separation or job finding also changes the natural rate of
unemployment.
22. Why is there Unemployment?
• If job finding were instantaneous (f = 1),
then all spells of unemployment would be brief, and
the natural rate would be
near zero.
• There are two reasons why f < 1:
1. job search
2. wage rigidity
23. Frictional Unemployment
Frictional unemployment is the time period between jobs when a worker
is searching for, or moving from one job to another. It is sometimes
called search unemployment.
Frictional unemployment exists because both jobs and workers
are heterogeneous, workers have different preferences and abilities and job
have different attributes.
Frictional Unemployment occurs when there is a
Shift among Industriesindustrial shift
Shift among sectors sectoral shift
Shifting demand of labor among industries and regions called Sectorial
shift.
24. Shift among Industries
When the demand for goods shift due to invention or new thecnology from one
indutry to another, it is called shift among industries
For Example: The invention of personal computers decline the demand of
typewriters as well as the demand of labor in typewriter industry
New Invention
But at the same time, demand of labor increase in electronic industry
25. Shift among region
Different regions produce different goods in a country. Sometimes, due
to some economic factors demand of labor increase in one sector of the
country and decrease in another sector of the country, and labor shift
from one region to another region
Some major sectorial shifts occur in the world
Late 1800s: decline of agriculture,
increase in manufacturing
Late 1900s: relative decline of manufacturing, increase in service
sector
1970s: energy crisis caused a shift in demand away from gas guzzlers
toward smaller cars.
26. Structural change over the long run
USA
Agriculture
1960
Manufacturing
2000
Other industry
Services
73.5%
57.9%
4.2%
9.9%
17.2%
28.0%
7.7%
1.6%
27. Changes in Frictional Unemployment Rate
During Depression
Frictional Unemployment
Decrease
During Boom
Frictional Unemployment
Increase
28. Effects of Frictional Unemployment
Frictional Unemployment is not as harmful for the economy as
other kind of unemployment
According to some Economists frictional Unemployment is
actually a benefit for the economy It provide the opportunity for
the companies to find the best qualified workers
29. Public Policy & Frictional
Unemployment
Govt. polices that decrease the frictional unemployment:
Provide information about jobs vacancies and workers
Retaining programs
Govt. polices that increase the frictional unemployment:
Unemployment insurance
30. Unemployment Insurance
Unemployment Insurance provide
of his or her
former wage to the unemployed person for
weeks
Unemployment Insurance increase frictional
unemployment because it reduce
It reduce the opportunity cost of being unemployed
The urgency of finding work
Rate of job finding
31. Case Study
A study conducted during
for checking the effects of
unemployment insurance
Unemployed workers divied into two group. One group offered
$
Bouns if they find the new job in weeks
The result shows that Average unemployment period for
controlled group was
weeks as compared to the
weeks for other group. It means that bouns decrease the
average period of unemployment by 7%.
Study shows that incentive provided by unemployment
insurance effects the rate of job finding.
32. Benefits of Unemployment Insurance
By allowing workers more time to search, UI
may lead to better matches between
jobs and workers, which would lead to greater
productivity and higher incomes.
33. Unemployment Insurance Benefits
Provided in developed countries
Eligibility excludes new entrants to the labor force
and those giving up job voluntarily
Raises aggregate demand and contributes toward
early recovery of an economy from recession
35. Why is there Unemployment?
The natural rate of unemployment:
• Two reasons why f < 1:
DONE
1.
Job search
Next
Wage rigidity
2.
U
L
s
s f
36. Real Wage Rigidity
Wage rigidity is the failure of wages to adjust to a
level at which labor supply equals labor demand.
Real wages bring equilibrium among labor supply
and labor demand while wages are kept flexible.
37. Unemployment from Real Wage Rigidity
If real wage is
stuck above
its equilibrium
level, then
there aren’t
enough jobs
to go around.
Real
wage
Supply
Unemployment
Rigid
real
wage
Demand
Labor
Amount of
labor hired
Amount of labor
willing to work
38. Unemployment from Real Wage Rigidity
If real wage is
stuck above
its equilibrium
level, then
there aren’t
enough jobs
to go around.
Then, firms must ration the
scarce jobs among workers.
Structural unemployment:
The unemployment resulting
from real wage rigidity and
job rationing.
40. The Minimum Wage Law
• Government is the basic factor causing wage rigidity as it prevents wages
from falling to equilibrium level. It sets laws which keep a legal minimum
on the wages that firms pay their employees.
• The minimum wage may exceed the equilibrium wage of unskilled
workers, especially teenagers.
• Studies: a 10% increase in minimum wage
reduces teen employment by 1-3%
• Tendency for firms to substitute towards illegal workers (who are not
bound by the minimum wage)
• But, the minimum wage cannot explain the majority of the natural rate of
unemployment, as most workers’ wages are well above the minimum
wage.
41. The Minimum Wage Law
It is enacted in almost every country so that forces
cannot drive it down too low.
When wages are pushed up to the level of
w*, unemployment to the extent bc is created, since
supply exceeds demand.
In addition, there is also unemployment to the extent of
cd, which is due to people looking for better jobs
44. Reasons for Wage Rigidity
DONE
1. Minimum wage laws
Next
2. Labor unions
45. Labor Unions
Unions exercise monopoly power to secure higher
wages for their members (collective bargaining).
When the union wage exceeds the equilibrium
wage, unemployment results.
Workers hired
Job finding
Structural Unemployment
46. Percent of Workers Covered by Collective Bargaining
United States of America
18%
Japan
23%
Canada
38%
United Kingdom
47%
Switzerland
53%
Spain
68%
Norway
75%
Portugal
79%
Australia
80%
Sweden
83%
Belgium
90%
France
92%
Finland
95%
Austria
98%
47. Collective Bargaining by Labor Union
Every country legalizes labor union activity to prevent
excessive exploitation of labor by the employer
Experiences have shown that if politicization of labor
union can be avoided and labor unions abide by the rules
of the game then union activities can contribute towards
congenial industrial relations
48. Unemployment caused by Unions
Insiders: Employed union workers whose interest is to
keep wages high.
Outsiders: Unemployed non-union workers who would
be willing to work for lower wages, so there would be
enough jobs for them.
52. Views of Efficiency wage theory
• Economists have proposed various
theories to explain how wages affect workers
productivity:
53. Theories of Efficiency Wage
Wages influence nutrition
High wages reduces labor turnover
Low wages allow best employees to take job
elsewhere
High wage improves worker effort
54. These theories share a common theme:
A firm operates more efficiently if it pays its workers
a high wage,the firm may find it profitable to keep
wages above the level that balances supply and
demand.
The result of this higher-than-equilibrium wage is a
lower rate of job finding and greater unemployment
57. Labor Market experience in Europe
Unemployment rate in European countries has risen
substantially e.g.
For France & Germany employment rate was 2% in 1960 and recent
rate is more than 10%.
What is the cause of rising unemployment in
Europe….???
The problem can b traced by the interaction b/w long standing
policy e.g. generous benefits for unemployed workers and a more
recent shock e.g. technologically driven fall in the demand of
unskilled workers.
59. Reasons for unemployment
1. Long-term generous programs, For
example, Social Insurance Welfare State
2. Rising demand for skilled workers
3. Labour unions
4. Demand for high wages
61. EUROPEAN MARKET UNEMPLOYMENT
VARIATIONS(OVERVIEW)
Europe is not a single market.it is sum of different markets
having difference in
Culture
Language
Traditions
Policies & Institutions
These variations provide a useful perspective on the cause
of unemployment.(focus is on international difference)
62. Facts and Differences…
Unemployment rate varies from country to country e.g.
o In 2008 when U.E rate in U.S was 6.5% then at the same
time it was 2.4% in Switzerland and 11.3% in Spain.
U.E rate has two types
o Unemployed for less then a year
o Unemployed for more then a year
63. Facts and differences(continued)
Long-term U.E rate shows more variability's
from country to county then short-term
Policies e.g. U.E is higher in the nation with
more generous U.E insurance etc.
Role of unions varies from country to country
64. Remedies:
The combination of generous payments to the
unemployment with assistance at helping them
find new jobs.
The role of unions should be revised.
65. The rise of European Leisure.
People in Europe work fewer hours then in U.S.A’s.
Typical Americans work many more hours then the
typical residents of western European countries.
Europeans retire in early age.
• Difference in work hours reflects two facts:
o U.S.A’s do more work per year. Europeans enjoys more
holydays.
o More potential workers employed in USA.
66. Continued…
o Role of union in Europe is more stronger in Europe
and it pushes towards shorter working hours.
o Preferences: (the main difference)
Europeans increase productivity to increase leisure
Americans increase productivity to increase
money. They decrease leisure to increase money.
Simply, Europeans have more taste for leisure.
67. Conclusion…
Unemployment represents wasted resources.
unemployed workers are wasting themselves.
People should accept low wage job rather then unemployment
Zero unemployment is not possible at all.
U.E insurance, the dole, minimum wage law and other programs
that support U.E should be revised again.
Govt. should provide assistance and proper training in finding the
job.
The policies of labour market have strong effect on the rate of
unemployment these should be choose wisely.
Editor's Notes
When price is fixed, both DL and SL depend on the nominal wage. Increase in nominal wage with price fixed will provide incentive for increased supply of labor. This is why DL is downward sloping while SL is upward sloping. If market is allowed to operate freely, nominal wage will be determined at w and employment at e. At this stage everyone who wants to work at the going wage w is employed. Thus, there is no unemployment. However in a broader sense there is unemployment to the extent of ê as these people are looking for a better pay.