Sunday 11 May 2008

The causes of unemployment

Unemployment is a very basic problem faced by all economies, with varying degrees of intensity. There are many different causes of unemployment, and I think the best way to understand them is to look at the unemployed and their reasons for being so:
1. Disincentive to work, i.e. the government pays their keep, they are better off unemployed than having a low-paying job and pay taxes and still be in the same economic state.
2. Drop in demand of their product. So for example big British industries such as the chemicals and steel industry have declined, so people have been laid off because the output required needs few workers.
3. Similarly the rise of new technology means that many peoples jobs have been taken over by machines, for example the farmhand has been replaced by the combine harvester and cow milking machine etc.
4. The trade unions have forced up the wages of their members, creating an unnatural strain on a companies finances, meaning they will have to lay off some of their workers.
5. People in transition from one job to another, so people like newly graduated people etc.



My new trading book that takes you through money-making step-by-step:

About Me

LEICESTER, East Midlands, United Kingdom
Co-founder of DesignMolvi, Qur'an hafidh, graduate of Oxford University. Now blogging at www.islamicfinanceguru.com