Essay On Unemployment

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Fighting structural unemployment involves transformation of more complex mechanisms like providing opportunities for training and retraining of the unemployed, as well as protectionist measures to protect the domestic market (Blustein et al., 2012; OECD, 2010). 349) rightly note, this eventually reduces the competitiveness of national companies, undermines international trade, and monopolizes production leading to various negative consequences for the economy.

In particular, protectionist measures help protect undeveloped and inefficient sectors of the economy of the country, reducing unemployment caused by the defeat of the enterprises in the competition. Therefore, more efficient are the methods of economic diplomacy that also focuses on the development of the domestic market, but alongside is promoting national products in the foreign market, supporting investment projects in other countries and attracting foreign investment, providing the best terms of trade in foreign markets (Mc Bride & Mustchin, 2013; OECD, 2010).

The criteria for distinguishing the types of unemployment, as a rule, are the reasons for it.

Thus, involuntary or unemployment of expectations occurs when an employee is able and willing to work at a given wage, but cannot find a job.

This means that people who have a profession and skill levels that do not meet modern requirements and current industry structure, being laid off, cannot find a job.

Together with frictional unemployment, structural unemployment forms a natural unemployment, which is compatible with the state of full employment, and the actual amount of production in this case is equal to the potential (Verhaar & Jansma, 2014, p. Here, frictional unemployment implies unemployment associated with the process of changing jobs, i.e.voluntary abandonment of one job and the search for another.Frictional unemployed include the dismissed or ones who quit their job, pending restoring at previous job or having found a new job, but who have not started it.Also, there is a concept of “unemployment trap”, when a person’s income do not differ much, regardless of whether one works or not (due to deprivation of the right to appropriate compensation and fringe benefits, as well as significant payments of insurance premiums, etc.), which reduces a person’s interest to employment (Verhaar & Jansma, 2014, p. One of the key types of unemployment is structural unemployment which is caused by structural changes in the economy, such as changes in the structure of demand for products of different industries, consumer goods and production technologies, elimination of obsolete industries and professions (Nattrass, 2014).As a result, the structural mismatch occurs between the skills of the unemployed and demands of the available vacancies.Thus, for example, measures to deal with frictional unemployment primarily include the improvement of the information supply system for the labor market and creation of special services for this (OECD, 2010, p. It is obvious that if the unemployed does not have information on existing vacancies, one cannot get a job.To solve this problem there are labor exchanges, employment centers and other similar private or public organizations.Another serious problem is the presence of hidden unemployment as opposed to registered one, when the unemployment of potential workers is not reflected in official statistics.For example, as a result of production decline, labor force is often not used fully, but is not dismissed either.Partly, hidden unemployment is represented by people who stopped looking for work (Verhaar & Jansma, 2014, p. The reduction of unemployment is an extremely challenging task namely due to the existence of a variety of its types.Theoretically, it is not possible to develop a common way of dealing with unemployment, and therefore any state is forced to use different methods to solve this problem, some of which are discussed below.


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