Reasons for unemployment

There are many ways to analyse reason for unemployment. Some authors approach the problem unilaterally. They only make reasons which don't explain unemployment in the internation with the whole operation of the economy.

A, An unilateral explaination

Following this way, they often emphasize the following reasons :

- Population growth :

When the population increase, the active population (people in working age) also increase. Its consequence makes the demand for job increase. The demand for job maybe increase by increasing the ratio of working women or reducingthe military service time. The production system isn't able to make more job. Unemloyment occurs because of the disproportion between demand and suppy for job. In another word employment is caused by the redundant demand for job

- Technological advance :

Aplication modern technology, technique renovation (use more robot, develop productionline......) make companies expand production without a recruiting more labour or even reducing the number of present labour but remain or expaind production. The result is the capital resource.

However, some authors think that the losing job in some fields using technology of new technology will be made up in other fields such as service field, entertainment field....

- Information boom

Information source make many voluntary unemployed : quit this job to find other matching jobs.

B, General Explaination

There are two ways to explaind according to two side. According to economists of the neo-classical school. In the perfect competition, reducing salary allow to increase employment fully. Their argument base on microeconomics theory recuirting a labour need more cost (marginal cost). If the marginal cost is highter than the marginal revenue, the company will stop recuirting . In theopposite , if the marginal cost is lower than the marnigal revenue, the company will continue recuiting while the marnigal cost is low because of reducing salary.

- According to Keynes shool, the present labour market isn't same as a market which economics of the neo-classical school though the labour demand lever isn't decided by the salary level, it is decided mainly by the business status of company. The company only recuirt more labour when it has more consumer market

So the demand for job is a function of product demand and it is decided by the nature of present technology classifier