Unemployment and Labor - Essay Example

?Sur Lecturer Unemployment and labor Question Labor is a factor of production among land and capital. The equilibrium of labor market is attained only when the wages are flexible fully. That is when the demand for labor and quantity of supply match. This results into a clearing effect of the market. Labor market movements occur when a particular market does not attract employees and they move to seek better market elsewhere. This labor market movement may be determined by the policies of labor market such as regulations of job security, the minimum wages, and social security which are often aimed at raising employee welfare and reducing employee exploitation. Decrease in labor demand and low cost of labor may also result into labor market movement. This is because the mentioned determinants will depress the incomes of labor. Other determinants of labor market movement include culture and demographics. This also includes cyclical elements like government benefits, demand for workers, and unemployment generosity. According to recent studies, labor market can also be determined by indicators such as: distribution of labor force by gender, age, and participation rates; level of education; employment distribution by sex and age; class of workers; status of job; employment rate by sex; unemployment rate by sex and age; and number of people not employed and distribution by age and sex. The labor market movement is determined by many other factors depending on the distribution of labor characteristics in that market. Educational level and qualification has a central role in job transition in the labor market. Work experience and structural factors also influence the possibility of labor movement and the direction in all market segments. Labor market competition and attitude towards immigration are also determinant factors to be considered. Based on education, investment on human capital and specialization in various occupations may also determine movement within labor market. Question 2 In order to forecast the rate of unemployment and nonfarm payroll change for November, I will make use of the past rates of employment in history. The prevailing market demands for labor, labor cost, required education level, rate of economic growth, unemployment policies, and interest rates. In the process of ascertaining the forecasted rate of unemployment, I will use the flexicurity debate concept that combines the flexibility of labor market with the security of employees. This concept has been formulated and initiated globally in attending to unemployment. As a concept it shows the necessity of balancing the need for protecting the security of labor market with the need for sufficient flexible labor market. The flexicurity policy is a reliable and flexible contractual agreement via modern labor law and agreement collectively with the employee’s organization. This determines the continual opportunity for training employees for employability and adaptability. This will help me in forecasting the rate of unemployment. Active and effective policies of labor market assist employees to cope the drastic changes. This helps in minimizing the duration of unemployment and even facilitates the movement to new jobs. These policies also encourage employment, provide for sufficient support in terms of income, facilitate the coverage of the provision of social protection, and facilitate the mobility of labor market. Hence, the details of the policies will help me forecast the rates of unemployment. The history of protection of labor is primarily about the working class and the labor movement development. The policies of labor protection have been used before in determining social welfare and economic development. The need to protect the rights of workers has since made the government to get involved in the regulation of policies. These policies are often used to determine compensation and benefits accorded to workers. Therefore, the labor protection policies can also be used to forecast the nonfarm payroll change as well as the rate of unemployment. Question 3 The relationship between employment, unemployment, and participation of labor force is the major prospect for labor market in this assessment. Usually, an assessment of labor market is done depending on the number of both available and added job positions each month or year. This is measured through the change in employment payroll. Consequently, in order to assess the labor market prospect for 2013, we will measure the number of employees to the working age population relatively. This will be calculated as an employment to population ratio. This is because this ratio is related closely to the overall growth of economy and relatively trend than the change in employment payroll. According to recent economic researches, the ratio of employment to population has risen modestly over the last quarter. This is converse to the situation witnessed back in 1984 when the ratio of employment to population increased robustly with the decline of the rate of unemployment. Therefore this ratio will provide a significant impetus growth. It is therefore expected that in the year 2013, the labor market will improve in terms of unemployment rate. Question 4 Improving job creation means tackling the problem of unemployment. In order to reduce the rate of unemployment, I will suggest employment policies such as: an improvement in the labor supply employability, this will ensure the unemployed get the required skills in order to occupy the vacant positions and job opportunities. This will also improve occupational labor mobility; an improved incentive for the unemployed to search and accept the work that is paid, this strategy will need particular benefits system and tax reforms; a strategy of sustained economic growth period in order to create new jobs and improve the aggregate demand; strategies that reduce occupational immobility and improve skill, this will provide the unemployed with necessary skills needed for re-employment and even increase their incentive to get jobs. This will also do away with structural unemployment resulting from occupational immobility. Improvement in training and education will also improve the human capital of the unemployed and give then chances of acquiring new jobs; strategies that increase aggregate demand through the use of macro-economic policies. These policies involve low direct taxes and low rates of interest. The strategy may also have foreign investment encouraged to the economy and this will improve employment and cut on the rates of unemployment. The demand for labor will also increase due to the demand for increased output by these investing foreign companies; strategies of benefits and tax reforms which reduce the real unemployment value to increase the incentive to take employment especially if the worth of the benefits of unemployment is below the minimum of the national wage rate; strategies of unemployment subsidies which will ensure that firms with long term unemployment creates incentives for increasing the workforce size; and strategies that focus on the economic growth of the country which will in turn create employment for the unemployed who enter into the labor market for their first time. It will also provide opportunities for employment for the currently unemployed people who are looking for work. Works Cited Daly, Mary, Bart Hobijn, and Joyce Kwok. Labor Supply Responses to Changes in Wealth and Credit, FRBSF Economic Letter 2009-05. 2009. Read More