The Macro and Micro-economic Concerns of the High Unemployment - Essay Example

?The Macro and Micro-economic Concerns of the High Unemployment Address: Although world’s economies have struggled to developtheir economies, the general labor market condition remains embattled. Unemployment rates continue to rise at an alarming pace, a factor that has considerable consequences on world’s economies. Many nations have initiated strategies aimed at curbing the situation, yet the challenge continues draining their economy. As such, unemployment remains an economic misery for the current generation to unleash hence examining the subject is of great essence. Keywords: Macroeconomists, Macroeconomists, Unemployment rates, economy Introduction The World’s economy frequently faces economic crisis with unemployment being a contemporary economic issue that threatens many economies. Strategic arguments observe that both macro and micro-economists should examine the present rates of unemployment critically. This is essential because unemployment invites financial disaster and reduces the aggregate purchasing capacity of a country. Consequently, the situation heightens the poverty levels leading to an increased burden especially in arrears. Indeed, unemployment leads to less spending hence minimizing businesses’ capital. As such, any economic analyst must remain alert to challenges presented by unemployment and underemployments. World’s unemployment overview Unemployment is an old economic challenge; thus, economists and policy makers have ever struggled to counter the problem. This effort has managed to regulate the spread pace, but of late, the situation has gone out of control. Evidently, despite decreasing unemployment rates realized from 31% in 2002 to 23% in 2009, unemployment rates remain wanting (Bahmani 236). Presently, about a quarter of the work age population is jobless, and a significant group is holding underpaying jobs. Interestingly, the rate ought to exacerbate in the future with the witnessed word’s economic crisis that has led to a reduction in demands of prime exports. Notably, the crisis is particularly pronounced in youth, women and unskilled populations. Studies indicate that more than 50% in the 20-25 age group are jobless, and the situation could be more severe later in consideration to the labor market and social structure as the numbers of unskilled and unemployed youths rise (Bahmani 237). Importantly, unemployment is highest in less developed nations; however, with the global economic slump, developed economies are of late facing the challenge. Predominantly, the US subprime challenges and its wide spread effects have considerably worsened the situation. In India, the challenge of unemployment is a prime obstacle to the region’s development. Studies note that even during the good periods, most Indian farmers remain unemployed for several years. Explosive populations and region disparity presents the major challenge for this economy. According to International Labor Organization (ILO) statistics, since the beginning of the 2007 fiscal crisis, the corporate world has lost more than thirty-four million employees. Indeed, the organization’s estimate of the year 2010 presented that about 210 million people were unemployed (Bahmani 236). Surprisingly, terrifying prospect states that the world’s youth unemployment figures may amplify progressively at a yearly average rate of 13.2 %. As such, the organization presents sentiments that economical consequence of this situation is perilous thus demands critical attentions. The rational behind the high rate of unemployment Rethinking of the controversy characterizing the world’s present condition of unemployment is of great essence. A major factor increasing the unemployment rates is the lack of sustainable demands for the labor. Bahmani (236) notes that in developing economies, a considerable group of people works as extra labor. This case has emerged by sense that the world lack approaches for promoting industrial and corporate ventures that can comfortably absorb its labor. Tactical observations argue that initially, the agricultural sector somehow accommodated global workforce comfortably. On course, numerous positions provided by the sector have faced corrosion with no responsive alternatives. The problem is attributable to a decline in the sector’s productivity. As such, the sector demands excessive labor but decreases in demand have led to low productivities thus failing to be sustainable. Bahmani (237) notes that the sole consequence of dynamic changes on a commercial economy is structural unemployment. Indeed, the similar situation may arise in case of a prolonged lack of labor demand. An influential factor that has promoted unemployment is the swift escalation of the world’s population. World’s population continues increasing, but resources remain limited. Importantly, businesses developments have not realized the same trend thus the world has witnessed labor surplus. As such, uncontrolled growths will always worsen the situation. In fact, country like China has realized the challenge presented by explosive growths and has considered engaging monitoring regulations such as the common policy of one child. The unemployment challenge and economists Apparently, the micro and macroeconomist can hardly escape the wrath of the increased world’s unemployment since the situation undermines their activities in various ways. Fairly, the unemployment deal may sound appealing to businesses since in such a situation; a firm has an access to a less costly workforce. Apparently, businesses seek to grow their profits and availability a less costly labor translates to reduced operational costs hence promoting returns. However, this is not the sole implication of a state of unemployment to the business. Micro and macroeconomics activities demand fiscal support and source their rewards by selling their products and services to the population. This indicates that the population should have the income to purchase from businesses. As such, the population’s wealth states the success of the macro and microeconomics endeavors. Bahmani (236) notes that progressive levels of poverty witnessed globally have a principal effect of worsening nations’ economies. This is true since poor populations will always lead to low spending thus reducing the firm’s returns. Consequently, economist should remain sensitive to the implication of a state of unemployment since the concern affects them strongly. Facing the challenge of unemployment Apparently, adopting tactical measures can minimize the challenge presented by high rates of unemployment. Considering the magnitude of the matter, it is rational to propose that any future economic reforms and industrial adjustments should target reducing the challenge of unemployment. This indicates that both economists and policy makers need to work communally while according preference to unemployment. Tactical approaches entail promoting sustainable utilization of the available resources and engaging further industrial and technological developments. Interestingly, economic restructures should adopt a new trend that has potential of promoting employments in the economy. Indeed, the corporate world and government entities should engage tactical measures aimed at alleviating unemployment. Additionally, initiating efforts that target regulating world’s population is an imperative practice since with large populations the problem is hardly challengeable. In fact, developing employment opportunities and parity in income allotment will considerably address the concern of unemployment. This is of great essence since the approach would promote macro and microeconomic activities. Conclusion Unemployment is an economic issue of strong magnitude in the contemporary world. As such, economies proliferation in future resides entirely on the world’s unemployment rates. Countries with effective tactics for addressing the concern ought to realize strong economies. This indicates that ignoring the implication of unemployment is detrimental and economies that adopt such positions ought to face economic frustrations. Notably, strategies are accessible that if adopted tactically, can reduce the effect of the concern. The world hence should engage such plans in developing their economies and combating unemployment should be an ideal consideration guiding all economies. Works Cited Bahmani, Sahar. "The Global Impact of Worldwide Unemployment Rates." International Advances in Economic Research 17.2 (2011): 236-7. ABI/INFORM Complete. Web. 22 June 2012. Read More