Unemployment in Theory and Practice - Case Study Example

? Business Economics Percentage Unemployment Rate (UK, the EU & the USA) Source: Office of National Statistics (2013) Unemployment is termed as the lack of occupation that leads to self sustainability in an economic perspective. According to Koos and Granata 2008, unemployment is one of the world’s most difficult agenda as it seeks to deter economic growth of a specific country or state and the entire world. Of importance to note is that, countries with a high level of unemployment have the worst economic growth while those that have a low rate of unemployment experience better economic growth (Lange 1998). As such, it is argued that, unemployment is directly related to economic growth of any given state or country. Consequently, economists argue that, unemployment is an issue that affects every state or country in the world with varying percentage rates (Srinivasan and Sivagnanam 2010). In light of this, the United Kingdom, the European Union and the United States of America are the three countries that have experienced major unemployment issues in the world. Essentially, the percentage rate of unemployment in these three countries has been in a close watch in for the last five years with major similarities and differences being displayed in this duration of time (McCord 2011). In January 2008, the percentage rate of unemployment was relatively similar in the United States of America and the United Kingdom with a variation of 0.1 % in the captured statistics. However, European Union experienced a higher percentage rate at 1.6% more as compared to UK and the United State of America meaning that, in that year the EU was leading in percentage rate. In the beginning of 2009, the three countries experienced an increase in the percentage rate, where the rate in United Kingdom increased with 1.9 %, the European Union increased by 1.8%, and the United States of America increased by 3.6%. As such, the Unite Kingdom experienced the highest increase in the unemployment rate in that year. Never the less, the three countries had an overall increase a significant 1.8 % and above (Herkenrath and Suter 2012). Similarly, the three countries noted a continuous increase in the percentage level in the beginning of 2010, where the United Kingdom shot to 8% from the previous year where it was at 7.1%. In addition, European Union moved from 8.6 % in the previous year to 9.7 % while the United States of America moved from 8.7% to 9.8%. In a general sense, between 2008 and 2010, the three countries have witnessed a significant increase in the rate of unemployment where each had a disparity of more than 2.0 %. In the beginning of 2011, the United Kingdom insignificantly reduced at 0.2%, the European Union increased insignificantly at 0.1%. However, the United States of America experienced a significant decrease of 0.9 %. The entry into the year 2012 saw a return of the two; United Kingdom and European Union countries into an increase mode. In contrast, the United States of American witnessed a constant decrease from the previous year. In January 2013, the overall percentage rate of the United Kingdom would best be described as fluctuation in terms of increase and decrease. In particular, the country had a decrease compared to the previous year. Layard, et al 2011 argues that, in relation to the United States of America, the unemployment level was at its highest of 9.8% in 2010, although the rest of years were covered by a fluctuation between 5.1% and 7.6%. Conversely, the European Union is the leading country among the three in the unemployment rate for the last six year where a significant increase has been noted, the United States of America comes in as the second while the United Kingdom is the last in line. The UK Domestic and International factors Causing Variation in Unemployment Rates in the UK, the EU and the USA Domestic Causing Variation in Unemployment Rates According to the graph, it is apparent that, the unemployment rate in the United Kingdom is relatively lower as compared to the European Union and the United States of America (Layard, et al 2011). For instance, finding employment in United Kingdom has a lower rate as compared to the European Union, and the United States of America. A survey conducted by the Labour Force in the United Kingdom indicated that, in the early 1990 the country experienced a constant improvement in outflow rates unlike in the other two countries. Herkenrath and Suter 2012 articulate that, there was a significant difference in the labour market especially between the United Kingdom and the United States of America. For instance, the recession level between the two countries was extreme with the one in the United States of America double while the one in the United Kingdom only increased by a third. On the other hand, the rate of unemployment in the European Union has continually being twice that of the United States meaning that, its comparison with the rate of unemployment in the United Kingdom could be wider. Of importance to note that, the economic policy in the United Kingdom put consideration in the economic policy making it easier to improve the rate at which there was an increase in employment rates thus reducing the average duration of unemployment that has been witnessed in the country. For instance, the government was expected to encourage employers especially during the recession period to hold on to their employees’ program that constantly reduced levels of unemployment at the time. In contrast, the economic policy in the United States of America and the European Union were too weak to support any employment or labour policy. In fact, the high rates of unemployment especially in the English speaking countries signified inefficiency and dysfuctionalism in the countries’ economics extensively (Roy 2009). International Variation Causing Unemployment According to Abbott 2010, it is clear that, some of the causes of unemployment in the three countries do not necessary come from domestic circle, but also emanates from international variation, which might be similar or different in the three countries. As such, the United Kingdom, the European Union and the United States of America are victims of global recession, inflation and change of technology. Initially, the past global recession have negatively contributed to the economy of individual countries particularly on the issue pertaining to economic growth thus suppressing the economic activities in the given country or state. Similarly, inflation has also contributed to deterred economic growth to the extent of increasing the rate of unemployment as most employers are not in a position to handle a certain number of employees due to increased cost of production (Ferthold 2008). Needless to mention, change of technology is arguably the main cause of unemployment in the world. Basically, change in technology occurs constantly and within a short duration of time. For this reason, most of these changes have a negative impact as they eventually reduce the necessity for human labour meaning that, the unemployment rate remains at its highest. Coincidentally, unemployment rate has also influenced the global market where undulating business cycles have been affirmed (Mishel, et al 2009). These business cycles gradually go down pulling with them inadequate changes for entry in the market leading to an increase in unemployment (Mason et al 2012). Reason why unemployment levels are more favourable in the UK, EU or in the USA across the years? Explain the answer Apparently, the unemployment levels are arguably more favourable in the United Kingdom, the European Union, and the United States of America. Basically, having the rate of unemployment quite noticeable in the three countries globally denotes that, there are unique factors about the three countries that are not found in other countries or states. To begin with, unemployment is mostly associated with the youth as they are the age groups that are mostly sort after by various employers due to energy, qualification, and experience (McCord 2011). As a matter of fact, the United Kingdom, the European Union, and the United States of America are the three distinct states that are rated as having a high percentage of their population being the youth between the ages of 16-34 years. In addition, most of these youth have gone through the best schools including universities but have not been able to acquire employment upon completion of their studies. In the same way , the United Kingdom , the European Union and the United States of America are believed to hold huge economic activities which no longer need human labour but instead rely on machines for production. As such, the labour expected to be given out by human beings is instead performed by machines (Lange 1998). In a general sense, the political and economic factors that govern these countries automatically puts them in a position where most of the global occurrences affect them directly or indirectly. Hence, unemployment rates in the United Kingdom, the European Union, and the United States of America is more favourable due to their economic position both internally and externally (Koos and Granata 2008). Bibliography: Abbott, F., 2010. Theories of the labour market & employment: a review. Manchester: Industrial Systems Research. Ferthold, K., 2008. Economics and Politics of Europe. New York: Nova Science Publishers. Herkenrath, M. and Suter, C., 2012. World Society In The Global Economic Crisis. Berlin: Lit; London: Global [distributor]. Koos, C. and Granata, C., 2008. The human tradition in modern Europe, 1750 to the present. Lanham: Rowman & Littlefield Publishers. Lange. T., 1998. Unemployment in Theory and Practice. Cheltenham [u.a.] : Elgar. Layard, G., et al., 2011. Combatting unemployment. Oxford; New York: Oxford University Press. Mason, A., et al. 2012. Global Economic Crisis: Impacts, Transmission and Recovery. Cheltenham; Northampton, MA: Edward Elgar. McCord, J., 2011. Facts, frameworks, and forecasts. New Brunswick: Transaction Publishers. Mishel, L., et al., 2009. The state of working America: 2008-2009. Ithaca, N.Y.: ILR Press. Roy, S., 2009. Unemployment and Wage Rigidity in the European Monetary Union: An Empirical Investigation. New York: ProQuest. Read More