Factors Influencing Unemployment Essay

agree to economists, employment and unemployment offsprings when the bring and demand for human resources or labour is bring out of balance. Supply and demand be influenced by a range of forces that are the result of the interaction of economic, morphological and policy factors.Economic FactorsEconomic factors adjoin both the supply and demand sides of labour. Demand for goods and services stimulate toil which, in turn, gene positions employment. The resulting demand for workers extend tos the supply side as more workers are attracted to a vibrant labour market. The market never reaches this ideal domain of balance collectable to a number of factors.Business cycles Agreement among economists is rare, only when they do agree that market-driven economies move in cycles and it is during the dips that unemployment whitethorn result. The cause of cycles is non as clear, but it is generally agreed that it is a function of supply and demand.Industrial adjustment Production m ay move from steep school occupy countries to low wage countries, from old inefficient facilities to unseasoneder ones, and these leave a haul of unemployed workers.Not enough jobs Shifts in the world economy affect job handiness. Not enough jobs to go around can result from a declining manufacturing sector, a suppuration service sector, changing consumption patterns, scientific developments, or third world competition. Hundreds of thousands of jobs have been lost in manufacturing and goods producing industries in Canada, while at the same time numerous jobs have been created in the technology and service sectors. Unfortunately, the creation of new jobs does non always get along up for lost jobs, particularly when jobs overall move to low-wage countries.Structural factorsFactors such(prenominal) as the aging of the population, labour force participation rates, migration patters, skills available/demanded, environmental regulations, technological change and the rate of jo b changes all the number of unemployed.A growing labour supply Since 1981, Canadas labour supply has bad more than anytime in its history. Women, persons with disabilities and Native peoples entered the labour force in growing numbers.Imbalance between skill supply and demand This results in structural unemployment. People may non be able to take profit of job opportunities because they lack the skills needed for the jobs available in their area. The matching of skills in demand with those available is a common and persistent cause of unemployment. preparation and training Companies continually complain that the literacy levels of the work force do not meet the skill needs of the economy. As Canada shifts to a more knowledge-based economy, the availability of jobs for those without high levels of education will shrink.Movement between jobs Called frictional unemployment this phenomenon exclusively refers to people who switch jobs. While they are between jobs, they are consid ered unemployed. seasonal lay-off People get laid off in seasonal occupations such as resource industries, construction, tourism and fisheries. Canada is particularly affected by this due to the nature of our economy.Cost of production and productivity Low productivity may result from obsolete plant and equipment, high apostrophize of labour per unit, high transportation costs, bad management, and high taxes. The value of the Canadian dollar congeneric to other currencies, particularly the US dollar, in any case has a major impingement on the business costs and competitiveness.Technological changes Increased automation may result in a decreased demand for labour. It can also result in skill redundancy where the original workers do not have the technological skills necessary in the new types of occupations. On the confirmative side, technological change can result in new products, new markets, or profitd productivity.Internal migration Rural to urban migration can increase unemployment until the moving people find jobs.Policy FactorsGovernment policies continue to be used to affect the economic outcomes such as the rate of inflation, dearth levels, and international trade. This all affects employment levels.Interest rate and exchange rate policies High interest rates to combat inflation increase the cost of doing business and increase the cost of financing the government deficits. This may deal to unemployment. The exchange rate policy of keeping the dollar artificially high may make Canadian products less competitive.