- The unemployment rate is a critical measure reflecting the utilization of human resources.
- Prolonged unemployment can raise the chances of an economic depression.
- Pandemic has shifted the global unemployment patterns and dynamics.
Globally, economies are facing various challenges. Unemployment is the one of the significant one. To curb them, various initiatives are on. Governments are making special budgets for jobless claims. Some are trying their best to create jobs. However, there is more to joblessness now.
What is unemployment rate?
The unemployment rate is a critical measure reflecting the underutilization of available labour with a nation. It shows the inability of an economy to generate employment for those willing to work and contribute to a nation’s GDP. It is a situation wherein individuals are both employable and willing to get job but are unable to get it. It is often interchangeably used with joblessness.
How is the unemployment dynamics changed in the pandemic?
Cyclical in nature, unemployment can be for a longer or shorter term. Besides, it is a critical macroeconomic indicator, showing how productive output of the economy is getting curbed. It provides insights into the economy’s unused resources. Methodology for calculating it varies among nations and data is often released periodically.
Why is unemployment data important?
Unemployment rates have negative impacts on a nation’s long-term economic growth. It can also pose serious implications on the social and economic front. Economists believe that unemployment strikes hard when prolonged; it is bound to impact the economy and raise chances of an economic depression.
Unemployment is important at the national level and even has impacts on social and individual levels.
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Unemployment leads to lower or no income, resulting in reduced purchasing power, fall in consumer spending, thinning business profits for businesses leading to squeezed budget and workforce reductions. It is an unending spiral that can worsen with time.
How is the world dealing with unemployment?
COVID-19 pandemic has hit the world hard in terms of joblessness from the beginning. Governments had to spend majorly on jobless claims supporting survival for citizens. However, the times are changing.
In the US, a representative of the developed world, the jobless claims level is currently the lowest, since the pandemic began in March 2020. However, the pandemic has changed Labour market dynamics. Labour supply is now dependent on several factors like childcare, government-funded unemployment benefits, retirements and even career change options.
For Australians, employment fell sharply in September due to forced lockdowns, resulting in lay-offs. Policymakers are, however, hoping for recovery in the coming months as vaccination progresses.
Globally, unemployment patterns have shifted and are now more dependent on lockdowns and job place dynamics. Governments have tried their best not to fall into unemployment-induced depression. However, how much more COVID-19 pressure they can sustain is still questionable.