Unemployment is a term used to describe the state of a person who is not involved in paid work. This could be due to a number of reasons - illness, disability, lack of qualifications of the economic climate of their country.
Currently, the rates of unemployment in countries such as America and Great Britain are very high. This is because employers generally have less money to spend on workers, so may refuse to hire extra staff, or may make others redundant. This can lead to a downwards spiral known as the cycle of unemployment. The cycle of unemployment states that, if employers have little money to pay staff, they may make a number of staff unemployed. This means that the now-unemployed staff have little money in their pocket to spend. As a result, demand for goods drops, meaning businesses make less profit. If businesses make less profit, they have less money to pay staff... And so the cycle continues.
One theory of reducing unemployment is to break this cycle. There are a number of ways to try to break it. One way is to encourage the people of the country to spend more money, in order to keep demand for goods up, and therefore keep companies and producers in action. Another way is to provide government funding to companies which are in danger of "going under" or becoming "bankrupt". If government funding is provided for such businesses, they are less likely to fire their staff. However, if companies accept government funding, they are also accepting a higher amount of government involvement in the company, in areas such as company spending and employment figures, so many businesses are reluctant to accept government spending as it often comes with difficult terms and conditions.
Unfortunately, there is no one conclusion to unemployment. Chances are that countries will always have a rate of unemployment - even in prosperous times such as after the Second World War, there was still a rate of unemployment, although it was very low. Some economic theories such as Keynesianism suggest that the government of a country should hold employment as its top priority. Other theories such as Monetarism suggest that, by focusing government attention on strict controls on the amount of money circulating within a country's economy, unemployment will also come down.
Currently, the rates of unemployment in countries such as America and Great Britain are very high. This is because employers generally have less money to spend on workers, so may refuse to hire extra staff, or may make others redundant. This can lead to a downwards spiral known as the cycle of unemployment. The cycle of unemployment states that, if employers have little money to pay staff, they may make a number of staff unemployed. This means that the now-unemployed staff have little money in their pocket to spend. As a result, demand for goods drops, meaning businesses make less profit. If businesses make less profit, they have less money to pay staff... And so the cycle continues.
One theory of reducing unemployment is to break this cycle. There are a number of ways to try to break it. One way is to encourage the people of the country to spend more money, in order to keep demand for goods up, and therefore keep companies and producers in action. Another way is to provide government funding to companies which are in danger of "going under" or becoming "bankrupt". If government funding is provided for such businesses, they are less likely to fire their staff. However, if companies accept government funding, they are also accepting a higher amount of government involvement in the company, in areas such as company spending and employment figures, so many businesses are reluctant to accept government spending as it often comes with difficult terms and conditions.
Unfortunately, there is no one conclusion to unemployment. Chances are that countries will always have a rate of unemployment - even in prosperous times such as after the Second World War, there was still a rate of unemployment, although it was very low. Some economic theories such as Keynesianism suggest that the government of a country should hold employment as its top priority. Other theories such as Monetarism suggest that, by focusing government attention on strict controls on the amount of money circulating within a country's economy, unemployment will also come down.
