Employment and Unemployment Flashcards

Full Employment 👨‍💼👩‍💼

• Exists when everyone willing and able to work is employed.
• High employment leads to:
  • Higher tax revenue 💰.
  • Less government spending on social welfare 🏘️.
  • Diverse, skilled labor pool attracting FDI 🌍.
  • Thriving indigenous business ecosystem 🌱.

Types of Unemployment

• Frictional: Between jobs, looking for work 🔄.
• Seasonal: Employment for only part of the year 📅.
• Cyclical: Reduced demand during economic recession 📉.
• Structural: Skills no longer in demand 🛠️➡️❌.
• Institutional: Obstacles preventing labor mobility 🚧.

Causes of Unemployment

• Economic recession: Reduction in aggregate demand 💸📉.
• Relocation of industry: Businesses moving to lower-cost locations 🏭➡️🌍.
• Systemic crisis: Threat to the entire country’s economic system ⚠️.
• Uncertainty about the future: Fear during economic downturns 😟.

Impact of Higher Unemployment

• Decrease in consumer demand: Fall in income 🛍️📉.
• Fall in inflation or deflation: Less disposable income 📉.
• Hesitancy to invest: Reduced market confidence 😟.
• Increase in government expenditure on social welfare 🏘️📈.
• Decline in tax receipts: Reduced income tax revenue 📉.
• Increase in social problems: Rise in crime levels 🚨.
• Lower wage demands: Threat of unemployment 😥.
• Reduced demand for imports 🚢📉.
• Increased tax burden on those employed 📈.

Effects of Unemployment – Summary

• Government Finances: Reduction in taxation revenues 💸📉, increase in social welfare payments 🏘️📈.
• Balance of Payments: Lower incomes reduce imports 📉.
• Price Inflation: Moderation due to reduced spending power 📉.

Reasons for Rise in Employment in Ireland 🇮🇪

• Economic Growth: Strong growth since 2008-2009 financial crisis 📈.
• Foreign Direct Investment: Significant investment from multinational corporations 🌍.
• Government Policies: Initiatives aimed at boosting employment 🏛️.

Impact of Lower Unemployment

• Higher standard of living: Increased incomes ⬆️🏡.
• Increased tax revenue: Improved public finances ⬆️💰.
• Increased demand for goods and services: Higher disposable income ⬆️🛍️.

Impact of Higher Unemployment on the Individual

• Decline in income: Job loss 😥.
• Requirement to find new employment 🔄.
• Alternative approaches: Emigration ✈️, retraining 🧑‍🎓.

Underemployment

• When a factor of production is not fully utilized ⚠️.

Strategies for Reducing Unemployment

• Encourage entrepreneurship: Support from Local Enterprise Offices 🌱.
• Decrease taxation: Reduce VAT and income tax rates 💸⬇️.
• Sustain a low rate of corporation tax: Attract investment 🏢.
• Subsidize additional labor 🤝.
• Reduce costs for businesses 📉.
• Capital investment by government: Improve infrastructure 🌉.
• Encourage new investment opportunities: Grants for innovation 💡.
• Invest in education and training 📚.
• Encourage consumption of Irish goods 🇮🇪.

Interpreting Employment Data

• Women in home duties 👩‍👧‍👦.

Poverty and Unemployment

• Unemployed individuals are more likely to be at risk of poverty 😥.
• Policies to reduce poverty: Increase minimum wage ⬆️, increase social welfare payments 🏘️⬆️, reduce cost of housing 🏠⬇️, reduce public transport costs 🚌⬇️.
• Challenges: Raising minimum wage increases costs for businesses 😟.

Measuring Unemployment

• Live Register: Monthly data on those claiming job seekers allowance 📊.
• Limitations: Includes those on partial payments, those working in the hidden economy, and those not actively seeking employment 🤔.
• Quarterly National Household Survey or the Labour Force Survey 📝.

Labour Productivity

• Measures output per worker ⚙️.
• Influenced by: Education and training 📚, incentive schemes 🎁, quality of factors of production ⬆️, new work practices 🔄.

Full Employment

• Exists when everybody seeking work is employed at existing wage rates 👨‍💼👩‍💼.
• Benefits: Increased standard of living ⬆️🏡, increased tax revenue ⬆️💰, increased aggregate demand ⬆️🛍️, increased investment ⬆️🏢.
• Challenges: Labour shortages 😥, wage demands 😟, pressure on state infrastructure 🚧, inflation 📈.

Balanced Regional Development

• Aims to ensure all regions share in economic growth 🌍🤝.
• Positive aspects: Less overcrowding 🏘️⬇️, equitable distribution of income 🤝, supports SMEs 🌱.
• Policies: Grants and subsidies 💸, tax deductions 📉, innovation and technology hubs 💡, lower land prices ⬇️.

Specialization, Employment and Balanced Regional Development

• Regions may specialize in production or service 🏭.
• Leads to increased investment and employment 📈.