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Unemployment is the state of an individual looking for a paying job but not having one.

Unemployment does not include full-time students, the retired, children, or those not actively looking for a paying job. Unemployment is a phenomenon where a person is physically fit and qualified enough to take up a job does not find it at the prevailing wage rate Unemployment occurs when a person who is actively searching for employment is unable to find work. Unemployment is often used as a measure of the health of the economy. The most frequently cited measure of unemployment is the unemployment rate. This is the number of unemployed persons divided by the number of people in the labor force. Not in labor force includes all people 16 years old and over who are not classified as members of the labor force. This category consists mainly of students, housewives, retired workers, seasonal workers interviewed in an off season who were not looking for work, institutionalized people, and people doing only incidental unpaid family work (less than 15 hours during the reference week) A situation where some people are willing and able to work, but are unable to find paid employment

Fritional: Frictional unemployment refers to the unemployment that results from the time that it takes to match workers with jobs. In other words, it takes time for workers to search for the jobs that are best suit their tastes and skills.

Frictional unemployment is the time period between jobs when a worker is searching for, or transitioning from one job to another. It is sometimes called search unemployment and can be voluntary based on the circumstances of the unemployed individual. mismatch can result between the characteristics of supply and demand. Such a mismatch can be related to skills, payment, work-time, location, seasonal industries, attitude, taste, and a multitude of other factors. New entrants (such as graduating students) and re-entrants (such as former homemakers (household manager: somebody who stays at home to manage a household rather than working outside the home) can also suffer a spell of frictional unemployment.Workers as well as employers accept a certain level of imperfection, risk or compromise, but usually not right away; they will invest some time and effort to find a better match. This is in fact beneficial to the economy since it results in a better allocation of resources. However, if the search takes too long and mismatches are too frequent, the economy suffers, since some work will not get done. Therefore, governments will seek ways to reduce unnecessary frictional unemployment through multiple means including providing education, advice, training, and assistance such as daycare centers.

frictional unemployment is a temporary condition. This unemployment occurs when an individual is out of his current job and looking for another job. The time period of shifting between two jobs is known as frictional unemployment. The probability of getting a job is high in a developed economy and this lowers the probability of frictional unemployment. There are employment insurance programs to tide over frictional unemployment. Frictional unemployment: those unemployed temporarily as individuals leave one job in search of another

Frictional unemployment occurs when people are moving between jobs or entering into the workforce and taking some time to find the job that best matches their skills.

Frictional Unemployment This is voluntary or transitional unemployment due to people moving between jobs: For example, newly redundant workers, or workers entering the labour market for the first time such as graduates and school-leavers take time to find jobs at wage rates they are prepared to accept. Many of the frictionally unemployed are out of work for a short time whilst engaged in job search. Imperfect information in the labour market may lead to frictional unemployment if the jobless are unaware of the available jobs. Often this information failure is localised for few workers scan the vacancies available across the whole economy, they tend to restrict their search for work to a local area. Geographical mobility in the UK and also in the EU is lower than it is in the USA for example. Incentives to look for work are also important! Some people may opt not to accept jobs at prevailing market wage rates if they believe the income tax and benefit system will reduce the net increase in income people can expect from taking paid work. This problem is referred to as the unemployment trap.

Structural Unemployment: Structural unemployment occurs due to the structural changes within an economy. This type of unemployment occurs when there is a mismatch of skilled workers and occupational vacancies in the labor market. Some of the causes of the structural unemployment are geographical immobility (difficulty in moving to a new work location), occupational immobility (difficulty in learning a new skill) and technological change (introduction of new techniques and technologies that need less labor force). Structural unemployment depends upon the growth rate of an economy and also on the structure of an industry.
Structural unemployment occurs when a labour market is unable to provide jobs for everyone who wants one because there is a mismatch between the skills of the unemployed workers and the skills needed for the available jobs. Structural unemployment is hard to separate empirically from frictional unemployment, except to say that it lasts longer. As with frictional unemployment, simple demand-side stimulus will not work to easily abolish this type of unemployment.

Structural unemployment arises in an economy when a mismatch occurs between the kinds of jobs being offered by employers and the skills, experience, education, and geographical location of potential employees. One important cause of structural unemployment is sectoral shifts, where employment in some sectors falls while employment in other sectors rises. Structural / Technological Unemployment refers to changes in the structure of the economy over time due to technology changes and changes in the pattern and nature of consumer spending.

Technological change usually means that the demand for some types of workers increases, while others find their skills are no longer relevant. Structural unemployment: a mismatch in the demand for and supply of labour due to changing technology and the changing composition of production Example: demand for computer programmers, supply of car assembly workers . Structural unemployment results from long-run inefficiencies in labor markets caused either by policy or by globalization and technical change leading to a long-run mismatch in skills and job demands.

Structural Unemployment Structural unemployment occurs when people are made jobless because of capital-labour substitution which reduces the demand for labour in an industry, or when there is a long run decline in demand which causes redundancies and worker lay-offs. Structural unemployment exists where there is a mismatch between their skills and the requirements of the new job opportunities. Skills are required to cope with structural changes in output and employment Structural change is a constant feature of a flexible economy. As some sectors decline, so other sectors requiring different skills will expand. The pace of technological change and global integration will increase demand for a more highly skilled workforce with the ability to adapt to changing technologies and shifting product demand.

Outsourcing:
the purchase by a company of labour or parts from a source outside the company, usually as a means of cutting costs or to employ expertise not available within the company Microsoft Encarta 2009. 1993-2008 Microsoft Corporation. Tous droits rservs.

Cyclical Unemployment: Cyclic unemployment occurs when there is an economic recession. When there is a downturn in an economy, the aggregate demand for goods and services decreases and demand for labor decreases. At the time of recession, unskilled and surplus laborers become unemployed. The reason this type of unemployment is called cyclical is because it is usually linked to a countrys business cycle,
If the economy is in growth mode, then companies will be doing better and the need for workers will increase. Demand for goods and services will rise, more workers will be hired, and the number of unemployed will drop. If the economy is in recession mode, then companies will be doing worse (on average) due to decreased demand for their goods and services. This will result in a reduced need for workers, which will result in an increase in the unemployment rate.

Cyclical unemployment is unemployment due to ups and downs in the economy. It includes unusual amounts of frictional and structural caused by general slowdowns in employers hiring and increases in layoffs.
Cyclical Unemployment Cyclical unemployment is involuntary or "demand deficient" unemployment due to a lack of aggregate demand. This is also known as Keynesian. When there is a recession we see rising unemployment because of plant closures and worker lay-offs. The fall in AD shown in the left hand diagram below takes the economy further away from full-capacity national output and leads to a negative output gap where actual GDP lies below potential GDP. Because labour has a derived demand, a fall in real national output leads to a contraction in total employment. Voluntary and Involuntary Unemployment An important distinction is to be noted between voluntary unemployment when a worker chooses not to accept a job at the going wage rate and involuntary unemployment which occurs when a worker would be willing to accept a job at the going wage but cannot get an offer. First, there's frictional unemployment, which occurs naturally in any economy. People have to search to find an employer who needs their specific skills. Finding the right employeeemployer match takes time and energy. Individuals have to look for the right job, and firms have to screen individuals for the right qualifications. This takes some time. Therefore, there will always be some level of unemployment in the healthiest of economies. Second, there's cyclical unemployment, which rises and falls with busts and booms in the macroeconomy. When the economy is booming, cyclical unemployment declines. In ordinary recessions, cyclical unemployment rises. Finally, there's structural unemployment, which comes from a fundamental imbalance between the skills of workers and the needs of employers/industries to utilize those skills.

Effects:
Economy:
An economy with high unemployment is not using all of the resources, specifically labour, available to it. Since it is operating below its production possibility frontier, it could have higher output if all the workforce were usefully employed. However, there is a trade-off between economic efficiency and unemployment: if the frictionally unemployed accepted the first job they were offered, they would be likely to be operating at below their skill level, reducing the economy's efficiency.[97]

Unemployed:
Unemployed individuals are unable to earn money to meet financial obligations. Failure to pay mortgage payments or to pay rent may lead to homelessness through foreclosure or eviction.[91] Across the United States the growing ranks of people made homeless in the foreclosure crisis are generating tent cities.[92] Unemployment increases susceptibility to malnutrition, illness, mental stress, and loss of self-esteem, leading to depression

Unemployment affects a person psychologically which can have many short term and long term problems. Some psychological effects of unemployment are discussed below. Lack of Self Esteem and Confidence: - Money and success make you confident and a job is a synonym for these and a way to get these factors. When a person gets unemployed, his confidence reduces which leads to lack of interest. Stress: - It is a major factor and a certain after-effect of unemployment. The problem with stress is that it is directly proportional to the time of unemployment. Loss of Enthusiasm and Willpower Issues: - "If you want to kill a man, take away his enthusiasm," goes a famous saying and this is what happens as a result of loss of employment. Enthusiasm and willpower are closely related as well. Ill-Health: - Stress is known to have physical effects on a human body and many unemployed individuals are known not to care for their health in this period which leads to a degrading level of health. Harsh Effects and Suicidal Tendencies: - There is a considerable proof that suicidal tendencies are seen more in unemployed people. This may be due to the combined effects of the above factors.

Scourge:
1. tormentor: somebody or something that is perceived as an agent of punishment, destruction, or severe criticism the scourge of my childhood 2. whip: a whip that is used for inflicting punishment

Microsoft Encarta 2009. 1993-2008 Microsoft Corporation. Tous droits rservs.

Shell out :
pay out: to pay out money, especially a great deal of money Microsoft Encarta 2009. 1993-2008 Microsoft Corporation. Tous droits rservs.

Employed : The unemployment benefits provided by the government are paid out from the taxation paid by the employed people.

Reduced spending power of the employed Increased taxes and the insecurity about their own work may affect the spending power of the working people as well and they too may start to spend less than before thus affecting the economy and also the society in a negative manner.

Costs of unemployment The costs of unemployment to the economy include:

The cost the individual and dependants. People will have lower incomes an living standards will fall. However, there is a wider unseen cost, as people out of work loose moral and their skill sets can become quickly obsolete. The cost to firms. Firms will find that people spend less, so they will have to lower price and will make less profit. However, it may mean that people are more willing to stay in their jobs owing to fear of unemployment, so they may work harder. The cost to government. As unemployment rises the government has to pay more in jobseekers benefits and will receive less tax.

Unemployment financial costs The government and the nation suffer. In many countries the government has to pay the unemployed some benefits. The greater the number of the unemployed or the longer they are without work the more money the government has to shell out. Therefore, the nation not only has to deal with the lost income and decreased production but also with additional cost. Spending power The spending power of an unemployed person and his/her family decreases drastically and they would rather save than spend their money, which in turn affects the economy adversely.

The effect of unemployment on our society


Unemployment affects not just the person himself but also his/her family and in the long run the society where he lives. Unemployment brings with it despair, unhappiness and anguish. It forces people to live their lives in a way they do not wish to The life expectancy is negatively affected. Life expectancy is the ease by which people living in a time/place are able to satisfy their needs/wants. Here are the main aspects: Mental health: Mental health problems like: Law self-confidence, feeling unworthy, depression and hopelessness. With the lost income and the frustration involved in it, the recently unemployed may develop negative attitudes toward common things in life and may

feel that all sense of purpose is lost. Frequent emotions could be low self-esteem, inadequateness and feeling dejected and hopeless. Health diseases: The unemployment overall tension can increase dramatically general health issues of individuals. Tension at home: Quarrels and arguments at home front which may lead to tension and increased numbers of divorces etc. Crime and violence: Increase in the rate of crime. Suicide cases: Increase in the rate of suicide attempts and actual suicides as well. Solutions: 1. == Government support to struggling industries in order to try to save jobs == 2. == Provide more training and education to the unemployed. This could help improve computer skills and communication. These people will become more confident and employable. == 3. == The Government needs to try to create demand in the economy. It could; == - Give grants to businesses to produce goods - Have projects such as road building - Cut interest rates to encourage spending - Cut income tax to encourage spending

Policies to reduce Unemployment


Government policies to reduce unemployment must be based upon the types and causes of unemployment that are prevalent. It may be worth glancing back to that section to remind yourself of the major kinds of unemployment; however, we will go into more detail in this section. General policies such as cuts in direct taxes should be effective across any kind of unemployment, as it increases the appeal of any job to any potential employee.
[edit] Real Wage Unemployment

This is unemployment as a result of a kind of market failure, a failure of the labour market to respond to changes in demand. If demand for workers rises, it is logical that they will demand greater real wages (diagram). Similarly, if demand falls, workers should expect to suffer lower real wages for the same work. Unfortunate though it may seem, that is the way the market works! Real wage unemployment is usually caused by a combination of:

Strong trade unions - giving employees greater power over deciding wage conditions with the threat of industrial action (strikes etc.) With strong unions, firms will not be able to reduce wages when demand is low, leading to bankruptcy (unemployment) or layoffs of workers (unemployment) Wage 'stickiness' - Employees on long term contracts will have a fixed wage over a long period of time. If a downturn in demand occurs, wages cannot fall immediately in response they are 'sticky'

Minimum wage - This is a characteristic of most modern economies, guaranteeing every worker a minimum standard of living. Whilst this is undoubtedly wonderful, if the minimum wage is set too high, the labour market is once again inflexible

Prescriptions for reducing real wage unemployment normally focus around the strategy of making each labour market more flexible so that pay conditions become more adaptable to changing demand and supply conditions. Real wages should rise when demand, output and employment and rising, but they may need to fall if an industry experiences recession which puts jobs at threat. The UK economy has developed a flexible labour market model similar to that of the United States during the last fifteen years.

Trade Union reforms were a centre-piece of the Conservative Government's strategy to improve the performance of the labour market. The Labour Party under Tony Blair has not reversed these reforms since coming to office, although some new legislation has been introduced to give workers the right to achieve union recognition. A National Minimum Wage has also been introduced.

Government policies to tackle this form of unemployment are invariably unpopular for workers, as their wage levels are threatened to the benefit of firms and businesses. However, it is largely appreciated that, for example, overly strong trade unions can utterly paralyse an economy (see Margeret Thatcher's time as Prime Minister in the UK). Policies to combat real wage unemployment include trade union reform (reducing their powers), increasing firms' ability to change wages and encouraging shorter term contracts and ensuring that the minimum wage level does not adversely impact the economy.
http://www.revisionguru.co.uk/economics/unemp4.htm http://answers.yahoo.com/question/index?qid=20061113063121AAN3D5H

[edit] Frictional Unemployment

Remember, this is unemployment generated through incomplete information of the labour market. This can be solved in two main ways. Firstly, increasing the knowledge of the local vacancies through government funded 'job centres' could reduce time between jobs. Secondly, increasing the incentive(encouragement) to search for suitable jobs (such as reducing unemployment benefits and lower taxes on wages) could serve the dual purpose of increasing incentives to search for work, and making more vacancies acceptable to the unemployed individuals. C. Reducing Frictional Unemployment 1. Policy suggestions to reduce frictional unemployment include establishing a computerized (informatiser) national job bank that would provide job seekers and prospective employers with better information and implementing apprenticeship programs similar to those used in Austria and Germany.

[edit] Cyclical Unemployment

It is worth noting that this form of unemployment can also be known as Keynesian or demand-deficient unemployment. Over the economic cycle demand changes, and regardless of how flexible wages are, unemployment will rise of fall (diagram). There are clear links between the rate of economic growth and the level of unemployment. It is clear that in a depression, unemployment will rise, as demand for good and services falls. This could result in a negative multiplier effect, without government intervention. Policies to reduce the impact of Keynesian unemployment include:

Increased government spending - this includes reductions in taxes. Increased G will cause an outward shift in AD, and may create a multiplier effect. Theoretically, government spending to pay workers to dig huge trenches and fill them in again will help, as it increases national income. However, targeted policies to increase the quality of infrastructure or levels of investment will be more effective. Also, reductions in direct taxes will encourage more people into work, and also increase the level of disposable income, hopefully leading to a positive multiplier effect Reduction of interest rates - remember that a fall in interest rates can also stimulate AD. Return to that section to remind yourself that a fall in interest rates encourages consumption and investment

A. Reducing Cyclical Unemployment 1. Most economists believe that an increase in cyclical unemployment is caused by a decrease in aggregate demand. 2. If wages and other input prices are "sticky," the economy can experience relatively long periods of cyclical unemployment and policies will be needed to reduce the unemployment. 3. Stabilization policies, government policies intended to maintain full employment and a reasonably stable price level, can be used. a. Expansionary fiscal and monetary policies can be used. 4. There is a tradeoff between reducing unemployment and increasing the price level. a. If the economy is at full employment, expansionary policies will simply increase the price level and leave output unchanged. 5. Despite the use of stabilization policies, we still observe cyclical movements in the unemployment rate and price level. a. These fluctuations occur because it is difficult to know how much to change variables such as government spending when using stabilization policy and because it is difficult to use stabilization policy in a timely manner.

[edit] Structural Unemployment

This is the inability of workers to change the kind of employment (for example from manufacturing to IT) they are in. Left without intervention, this could lead to dangerous long term unemployment, whereby workers find it increasingly difficult to find jobs as they become less desirable the longer they are unemployed. Policies to reduce occupational unemployment include:

Retraining - incentives for both companies to retrain and employees to take part in training to make them more attractive and useful to firms. Governments may also directly take part

in retraining projects where unemployment levels as a result of structural unemployment are very high Reducing geographical immobility - could result in no need for retraining programs, as worker could simply move to an area in which their skills are in high demand. This works providing the costs associated with reducing geographical immobility are lower than those required for occupational-orientated projects such as retraining, and that their skills are in demand somewhere.mom

B. Reducing Structural Unemployment 1. Policy suggestions to reduce structural unemployment include providing government training programs to the structurally unemployed, paying subsidies to firms that provide training to displaced workers, helping the structurally unemployed to relocate to areas where jobs exist, and inducing prospective workers to continue or resume their education.

Steps to Reduce Frictional Unemployment Though frictional unemployment rate can never go down to zero, there are certain policies and solutions that can be applied to reduce the rate of frictional unemployment in an economy. These are discussed as follows.

Proper educational advice to college students in terms of the job demands and skills required to get job faster. Reduction in employment discrimination Proper training facilities should be provided at schools and colleges. Attempts to reduce the difference between the gross income and the net income. Proper channel of information should be used to provide details of the available jobs and potential workers. If any biased approach exists in the work environment in terms of employees, job location etc, then proper action must be taken against it. More facilities should be provided to enable more flexibility and availability.

Though frictional unemployment is among the types of unemployment, it is not considered to be bad. On the contrary, it is considered beneficial because it gives an opportunity to both the workers and the organizations to look for the best suitable options. If frictional unemployment didn't exist, then most of the people would have been working in the same jobs all their life, making it impossible to have a scope for growth, innovation and skill development. A little bit of friction is required to increase of the pace, and frictional unemployment gives us the opportunity to do the same.

The government might also make more active use of regional policies to encourage inflows of foreign investment from multinational companies particularly to those areas and regions where unemployment is persistently above the national average.

Morocco
The Employment Initiatives Concerning the state policy to promote employment, the major challenge for the Morocco is to achieve both productivity growth and promote employment developing intensive activities of scientific and technical expertise. Thus, programs "Idmaj", "Taehil" and "Moukawalati" are the main axes of the proactive policy adopted by the State for the promotion of employment, in addition to other programs to improve the "employability" through upgrading human resources. Achievements of the second plan''''Employment Initiative 20092012 are as follows: The program aims MOUKAWALATI support self-employment through the encouragement of young people to start their own business. This program has enabled the creation of 1012 companies in 2009, 44% of companies created since 2007, has generate 8000 jobs. The program TAEHIL is to adapt the training to market needs of work. In 2009, this program has reached 14,033 young people, or 78% of the target announced for 2012. The program IDMAJ aims to improve business competitiveness and development of skills of graduates. It resulted in the integration of 172,000 young job seekers in the period 2006-2009, 30% in 2009. It should be noted that the Action Plan 2010-2012 which aims at regulating the sector employment plans to expand the coverage to benefit the beneficiaries of the program "Idmaj" to implement the plan of compensation for loss of employment and achieve missions for monitoring and control of private employment agencies to encourage to respect the social rights of employees.

Morocco Unemployment Rate The unemployment rate in Morocco was last reported at 9.1 percent in the third quarter of 2011. This page includes a chart with historical data for Morocco's Unemployment Rate. Unemployment rate is defined as the level of unemployment divided by the labour force. The labour force is defined as the number of people employed plus the number unemployed but seeking work. The nonlabour force includes those who are not looking for work, those who are institutionalised and those serving in the military.