JB

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 📈.