Unemployment is termed as joblessness and is the situation created when people vigorously try to find jobs but have no luck for a period of more than four weeks (Fogiel and Rycroft 334). Fogiel and Rycroft also go on to say that unemployment could either be frictional, structural or cyclical (334). Frictional unemployment occurs when a person decides to switch jobs. Structural unemployment occurs when a company decides to replace their manpower with technological innovations, rendering people jobless. Cyclical unemployment on, the other hand, is the unemployment caused by the fall in the economy’s output and growth. (334). When one understands unemployment fully, it becomes clear that unemployment is not only a problem by itself, but it also the maladies that unemployment prompts. One cannot go about solving problems which they do not understand. Getting a heed of the problem is thus the first step to problem solving. This is a logical step that makes use of the critical statement ‘think before you act’.
Every problem, though, has a solution. There are a number of ways to go about solving the problem of unemployment this way, eradicating those that come as a result of unemployment. Unemployment has been and still is a highly crucial part of the society and, is thus best to find ways of solving it. It is well known that anything that is not part of the solution is then a component of the problem. The solution to unemployment is eradicating all possible impediments and barriers to employment.
High Cost of Workers’ Maintenance
The most widespread basis of unemployment is the high cost of employees’ maintenance is on the rise and most employers tend to find this as a challenge. The solution to this would be for employees to enhance their knowledge and skills by taking up training to keep themselves up to date with the latest skill set. By keeping themselves up to date with their training, they are able to acquire skills relevant and necessary in the changing marketplace. This way, people have the best job qualifications for jobs on hand.
Intrusion by External Bodies
The intrusion by bodies outside the labor market is also a leading cause of unemployment in this day and age. The minimum wage laws, workers unions and taxes, are imposing on the labor market in a bid to better the workers working conditions, end up achieving the opposite. Most employees involved with these groups, demand for wages that are unachievable from their employees. Eventually, they end up pricing themselves out of their occupations. It is hard to determine just how far the workers’ wages should be increased or reduced to eradicate the problem of unemployment.
The Corporate Income Tax
The government could also have a hand in eliminating this vice of unemployment by reducing or entirely eliminating the Corporate Income Tax. Money lending institutions like banks find it necessary to retain most of their capital; this is so as to be able to counteract the loss that may come with the act of giving loans. Once the companies are freed from having to paying the corporate tax, they get to retain more money and are thus able to take their chances in hiring more manpower. The government as a countermeasure should monitor businesses to make sure they do not just sit on the cash reserves created from the elimination of the corporate tax.
The Contribution to Social Security and Social Security and Medicare
In recent years, the employer and employee contribute to the social security and Medicare. This is not a good thing for the employment state. The situation would be different if the two were eliminated, as the employee salary would rise adequately to cover the Medicare and also to atone for the loss of the benefit. This will eventually lead to companies being more efficient in producing quality services and subsequently extensive profits. The profits gained by the company would then directly have an effect on the cost of hiring more manpower as it would be reduced considerably.
Deduction of Time Saving Services
In some instances, people prefer remaining unemployed to being employed. This is because the cost of unemployment compared to being employed is somewhat lower especially to people with working spouses or is receiving the unemployment benefits. The service one has to hire in case of a job are, on the other hand, not required if they stay off work and instead put their own labor into these services. If one is unemployed, he or she becomes responsible for working on the gardens, doing the laundry, taking care of the kids and, cleaning the house . This is as opposed to taking the children to a daycare, taking the clothes to a dry cleaner and hiring a gardener. This will render the people offering these services out of work. The solution would be to reduce these services that limit people to taking up jobs. This way, people are able to go to work and profit the companies with their output. This action will also directly impact the level of unemployment by actively reducing it.
From the entire problem solving options mentioned, the level of unemployment is expected to reduce and eventually become a thing of the past.
Fogiel, Max& Rycroft, Robert S. The Economics Problem solver. New Jersey: Research & Education Association, 1980. Print. (Book)