Unemployment is a serious issue and has lot of contributing factors to it. If you wish to learn about its causes, follow this article to know what the probable causes of unemployment are.
In the backdrop of the present market economy, the last thing any working professional will want to face is unemployment. Losing a job can make baffle you completely and you just don’t know what you should do next. Unexpected job loss and unemployment are not only demoralizing, but make people emotionally disturbed. Unemployment can ruin relationships and make you perplexed. Being without a job is a complex issue that is guided by several factors. While recession is the most common cause for unemployment, personal attitude can also be a prime reason for joblessness. No matter how frantically you search for jobs, if you maintain the same outlook for which you lost your previous job, it is going to do you no good. If you wish to learn more about the chief causes of redundancy, then read the following section and tips and act wisely to get started with a successful career.
Cyclical unemployment is one of the most obvious causes for unemployment. This occurs when the unemployment rate moves in the opposite direction of the GDP growth rate. For example, if the GDP is small, then unemployment will be high. Similarly, when the GDP is large or positive, unemployment is minimum or negligible. Classic example of cyclical unemployment is getting laid off due to a recession. This is the main reason why the unemployment rate is considered as a key economic indicator.
Structural unemployment is also common cause for job loss. With new technology on the rise, the demand for professionals in certain sectors rises as well. This can lead to unemployment in certain sectors and create job possibilities in other sectors. If the workers relocate or migrate to other sectors, reemployment is possible. For example, floppy discs were replaced by CDs and DVDs. As a result, companies manufacturing floppy discs were shut down. Professionals who were working in these companies became unemployed. So they had to relocate or migrate to other sectors to find other employment opportunities.
This type of unemployment occurs when people move between locations, careers, and switch between jobs. For example, people reenters jobs after raising children, students completing studies and looking for jobs, people moving to new cities and searching for jobs.
Other Causes Of Unemployment
How To Deal With Unemployment
Framing the right economic policy is the major step a government should take to minimize unemployment in any country. Changing ones personal outlook can also help an individual to find job. Many governments have undertaken macro-economic stabilization policies that have an objective to provide financial assistance to unemployed individuals until the person finds a source of income.
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