Unemployement

In the transition from the 20th century in the 21's biggest problem is unemployment. Many see this catastrophic threat to humanity. Modern crises are responsible for the formation of new industrial and social processes that contribute to the emancipation of man and society. Unemployment is a consequence of new transformations at creating a new world of the twentieth century. There are three main causes of unemployment: loss of employment, voluntary withdrawal from the work, and first appearance on the labor market. In order to understand the causes, we have to know what types of unemployment exists. There are three types of unemployment: frictional, structural and cyclical. Frictional unemployment associated with the search work. Obviously, the job search takes time and effort, so people waiting or looking for work, some time are in the unemployed state. Feature of frictional unemployment is that the job search ready specialists with a certain level of training and qualifications. Therefore, the main reason for this type of unemployment is the imperfection of information; information about the availability of jobs. People, who lost their jobs today, usually can not find another job tomorrow. Frictional unemployment refers to people who have been dismissed by order of administration, resignations, who found a job but have not started it, seasonal workers, and people, first appeared in the labor market and the economy have required level of training and qualifications. Structural unemployment is caused by structural changes in the economy, which are connected with changes in demand for products of different industries, and a change in the sectoral structure of the economy, caused by technological progress. The structure of demand is constantly changing. Demand for products of some industries is increasing, leading to an increase in labor demand, while demand for the products of other industries is falling, which leads to a reduction in employment, job layoffs and rising unemployment. The reason for structural unemployment is the mismatch of the labor force structure of jobs. This means that people who have a profession and level of expertise that do not meet modern requirements are laid off. In addition, the structural unemployment includes people first appeared on the labor market, including graduates of higher and secondary specialized educational institutions, whose profession is no longer required in the economy. The structural unemployment involves also people who lost their jobs due to changes in the structure of demand for the products of different industries. In different periods of time demand for the products of some industries is increasing, so the production is expanding and needs more workers, but demand for the products of other industries is falling, production is decreasing, and workers are laid off. The last type of unemployment is cyclical. Cyclical unemployment represents people who are unemployed because of poor economic conditions. When the level of economic activity declines, the demand for products and services declines. This reduces the need for workers. For instance: a firm may lay off factory workers if the demand for its products decreases. Another explanation of unemployment exists; Keynesian explanation. Keynes created his own theory of employment, according to which a single parameter, which relates the volume of employment is the amount of effective demand. The merit of Keynesian theory of the development of unemployment is that he presented a logical model of the mechanism, spin on economic instability and its components - unemployment. Keynes pointed out that the growth of national economy in a developed market economy most people do not consume all of their incomes; some of it is converted into savings. To turn them into investments people must have a certain level of so-called effective demand, consumption and investment. The fall in consumer demand reduces the interest to invest, and, consequently, decreases the demand for investment. With falling production incentives for investment is not growing and may even clot, which leads to unemployment. In contrast, I would not give full credibility to Keynes’s theory. The cause of unemployment is not only the consumption and investment of the community. Keynes talks only about unemployment in developed countries. As for me, I think that the main cause of unemployment is the changes occurred in the economic system. For example: development of new technologies, high qualification requirements and so on. In conclusion, the economic system and condition of a country changes all the time. Unemployment can be caused by changes occurred in the industries such as development of high technologies, accumulated economic problems, and process of privatization. Although we can not change this fact, we can improve our qualifications and meet the needed requirements. Our community can live without unemployment.