MACRO GROUP ASSIGNMENT - Docx DH Siap
MACRO GROUP ASSIGNMENT - Docx DH Siap
The unemployment rate is one of the primary economic indicators used to measure
the health of an economy. It tends to fluctuate with the business cycle, increasing
during recessions and decreasing during expansions. It is among the indicators most
commonly watched by policy makers, investors, and the general public.
In July 2024, the unemployment rate in Malaysia stayed at 3.3%, down from 3.4% a
year earlier. The number of unemployed people dropped to 563,700, the lowest in
about four and a half years. Employment rose to a record 16.63 million, and the
labour force participation rate increased to 70.4%. The unemployment rate was also
3.3% in June 2024. It was much stable compared to the year 2021, when the pandemic
of covid19 occurred which caused the unemployment rate to increase to be 4.8%
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2. TYPES OF UNEMPLOYMENT
Frictional/Normal unemployment
Frictional unemployment can be referring as temporary unemployment in short
period of time. People whom just graduated and searching for jobs and those who
quit from jobs and searching for new jobs are included in frictional
unemployment. Frictional unemployment also happens in full unemployment
when people quit their job for better position or higher wages. Those who’s
categorized in frictional unemployment may need some time to search for new
work opportunity that fit their needs and qualifications.
Cyclical unemployment
Cyclical unemployment is a type of unemployment where labour forces are
reduced as a result of business cycles or fluctuations in the economy, such as
recessions. When the economy is at its peak or experiences continuous growth, the
rate of cyclical unemployment is low. On the other hand, during a recession, the
rate of cyclical or involuntary unemployment is high, due to the decline in
consumer demand for goods and services. Unlike frictional unemployment,
cyclical unemployment is involuntary. It continues until the economy is out of
recession and post-recession recovery may takes several years.
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Structural unemployment
Structural unemployment exists when shifts occur in the economy that create a
mismatch between the skills workers have and the skills needed by employers. An
example of this is an industry’s replacement of machinery workers with robots.
Workers now need to learn how to manage the robots that replaced them. Those
who don't learn need retraining for other jobs or face long-term structural
unemployment. A long recession often creates structural unemployment. If
workers stay unemployed for too long, their skills will likely become outdated.
Unless they are willing and able to take a lower-level, unskilled job, they may stay
unemployed even when the economy recovers. If this happens, structural
unemployment leads to a higher rate of natural unemployment.
Seasonal unemployment
Seasonal unemployment arises due to a seasonal variation in the activities of
particular industries. It may be caused by the change of climates, fashion trends,
or the inherent nature of the industries themselves. Therefore, many people who’s
work in certain field of work might be temporary unemployed during the season.
For example, Fishermen, rubber-tapers, and farmers won’t be able to work during
the monsoon season which caused them to be unemployed in some period of time.
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3. THE FACTORS OF UNEMPLOYMENT
There are many factors that can lead to the increased of unemployment such as
recessions, technological improvements, and lack of skills. This causes some of the
citizens unable to work or find a job which leaving them to be categorized as
unemployed thus increasing the rate of the unemployment.
The first factor that contributed to the unemployment is recessions, where the
downturns of the economic happens. When the recession begins, the total of output
will reduce which lead to the increases of the unemployment. Higher prices make it
harder to make ends meet, so individuals often turn to strict budgets and cuts in
discretionary spending. In a recession, companies often reduce their staffing levels to
save money.
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The second factors are technological improvements, where the manpower no longer
needed in some faction of jobs and got replaced by technological device. As we all
already know, technology give a huge impact on human life to make the things easier
for them. However, some of the workers who got replaced with technology might
suffers from the job loss. For instance, automation technology has taken over many
roles from the factory workers which resulting them to be unemployed.
Last but not least, the lack of skills or knowledge make some people harder to get a
job that they wanted to. Nowadays, the requirements that needed to get a specifics
jobs got advanced for instance, some company may ask for a certain educational
certificate and job experience from the job applicant.
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4. THE EFFECT OF UNEMPLOYMENT
Unemployment can affect the individual by loss of income and self-respect. when the
person to lose the job, it causing them to be financially struggles which lead some of
people gain a depression or other mental problems. With the current economic
situation, the difficulty to get a job become more harder each the passing times which
bring a downfall to unfortunate workers who lose and can’t get a job support their
living. They might live in humiliation as people would think that they haven’t put
enough effort thus discriminated them.
Other than that, Unemployment also lands an impact on society since some of the
unemployed workers may engaged in immoral or illegal activities. Hence, contributed
to the increases of the crime rate such as pickpocketing, robbing, murdering, human
trafficking, and lot more. People may do anything without thinking the consequence
from their act when they’re desperate for money.
Last but not least, the economy can be affected with the high unemployment rate. The
GNP gap is the difference between potential GNP and actual GNP. Potential GNP is
determined by the level of output with full employment, whereas actual GNP is the
current level of output. The higher the unemployment rate, the greater the GNP gap
Unemployment incurs the loss of government revenue obtained through personal
taxes. Certain countries provide unemployment benefits, which form part of
government expenditure. This could reduce development activities of the economy.
Slow economic growth and low output might lead to a depression.
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5. THE WAY TO OVERCOME UNEMPLOYMENT
There are several ways to overcome an unemployment such as skills development, job
search strategy, find a passion in the job, enlarge the work circle and of course the
government also need to play their part to ensure the unemployment can still be
controlled by applying the monetary policies and fiscal policies.
Skills development
For now, we going to explain about the skills development where the unemployed
workers can put some effort to improve their skills and knowledge in order to find
better job or met the specifics job requirements of their target occupations. For
example, they went for a special training that can enhanced their ability to get better at
some section that they weak at so the chance for them to get their dream job can be
increased. The unemployed worker may start to going on the training that focusing on
developing a communication, decision making, and problem- solving skills.
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Find passion in the job
For unemployed person that having a hard time in finding a job can always find a job
that suit their hobby. For instance, someone who’s love to do art might tend to engage
in occupation like being a painter or a digital designer and the sculptor. When they got
into the career that involve something that pique their interest, eventually they will
find a passion in it which lead them to stay with one job until they retired or decided
to change the profession.
Monetary policies
The government may practise expansionary monetary policies which increase money
supply in the economy. Some of the tools of monetary policy used to control
unemployment is open market operations-Purchase of securities or short-term bonds.
The central bank may buy short-term bonds or government securities and treasury
bills from individuals, as well as institutions. The purchase of securities can increase
money supply and increase the purchasing power of individuals and firms. Next,
lowering the reserves requirement which is refers to the amount of reserves
commercial banks are required to keep in the central bank. During periods of
unemployment, the central bank lowers this reserves requirement to increase the cash
resources of commercial banks. thereby encouraging the bank to offer more loans to
the public and businessmen.
Fiscal policies
The government may practise expansionary fiscal policies through taxation and public
expenditure for example, there will be a decrease in taxes. To control unemployment,
the government reduces the general burden of taxation on the community. A reduction
in excise duty, sales tax, service tax and other types of taxes will increase the
consumption expenses of the people. A reduction in business and corporate tax will
promote an increase in investment, and thus employment will increase. Beside that,
there also will be an increased in government expenditure. Increase in government
expenditure will directly affect aggregate demand. For example, an increase in the
salary of civil servants creates more development projects which may reduce
unemployment.
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THE CONCLUSION
In summary, unemployment can greatly affected people life, society, and economy
since it cant be prevented but its still can be controlled by the government in order to
keep the unemployment rate below the 4%. The unemployment rate can be consider
still in stable state as long as it not increased above the 4%. The unemployment
problem in Malaysia has reached an increasingly step percentage and this situation
has a negative impact on the national economy. Therefore, the government needs to
adopt a 'people-friendly' approach to help people who are facing the problem of
unemployment. This action not only saved the people but also boosted the country's
economy. Indeed, Malaysians should be united because there is a proverb that says
that when we stand united, we fall apart and in the face of this great challenge we
should not act like our little fingers are linked together.
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REFERENCES
By Adam Hayes “Learn about our editorial policies’ Updated October 08, 2024
https://www.investopedia.com/terms/u/unemployment.asp
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THE ARTICLE AND NEWSPAPER
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