Please respond to question 3 of the Discussion Questions which reads, \"Suppose

Question

Please respond to question 3 of the Discussion Questions which reads,

"Suppose that a government tries to reduce the unemployment rate by making it harder for firms to fire workers. This reduces the fraction of employed workers who lose their jobs each month. However, because firms are now more hesitant about hiring new workers, it also takes longer for each unemployed worker to find a job. What effects might this policy change have on the nation's unemployment rate?"

You must discuss what the 'barriers' to entry is/are, what effect this has on the demand and supply of labor, and the general effect on the national unemployment rate. What is the general effect of government intervention in market pricing?

You must demonstrate understanding of the relevant concepts (definitions and/or examples that apply).

Explanation / Answer

The govt is trying to reduce the unemployment rate by taking some measureable steps, as govt provides tax credits to companies ,those shorten working hours rather than to slash their workers for example aindustry with say 100 workers on their pay roll &if 10% workers loose their jobsbut if woking hours are reduced for the workers &then those 10% will also have jobs &get credit from the govt to make the employees" WHOLE" thus industries save money & add workers.

2) Economist & thinkers are the view small & cottage industries are the back bone to the economy of the country because they provide jobs to skilled & non skilled workers . Today industries are employing part time workers to keep the cost &severance low.

3) The work progress Administration ,gave jobs to skilled workers which was very useful for the recovery of the countries economy, rather than to pay to unemployed to stay idle.

4) TO BOOST EXPORTS: to increase the exports for products which have low profit mragins, low transportation expenses for( by ship .air or ground).

5) MINIMUM WAGES: to provide cheaper labor .The employer add workers at acertain wages even below the minimum wages & the employer to get reimbursed from the federal govt.

6) IMMIGRATION : their are many immigration cities where labor supply swamps lobor demand the goverment can help providing aid to create public sector jobs in states with particular high rate employment.

In Europe the goverment directly intervines the labor market.the new labor contract laws states that employers to provide written contracts to their workers avoid/resrtict the use of temporary labors & make harder to reduce the employees.

UNEMPLOYMENT INSURANCE: IT was discovered ,the employees who loose their jobs.wheather remporary or permanant ,had to starve for their livehood, the relocation of jobs beneficial to both the people & the economy for this main reasons unemployment insurance protect their workers .The unemployment insurance means that you receive some amount from the goverment.the time frame how long you unemployed or dependent .In US the amount of insurance varies from state to state.

The unemployment insurance may be difficult to pay for the private institutions ,but the fact is that every does not make claim thr insurance at the same time we take an example of accidental cars or home insurance ( in case of theft or burns) only about 10to 20% may claim for the benefits.so the government can finance unemployment insurance in a year.

The unemployment insurance has two main factors,insurance makes unemployed people to sustain their levels ,untill they regain their employment The second factor is that if an unemployed knows that he will be receiving some income for his lively hood then he can search abetter job as per his qualification,experience .

FIRING COST: in case your demand for the product has gone down ,the out put is reduced you simlpy cannot dismiss /terminate your worker so for this many laws/policies have been introduced for which acompany has to pay ahuge amount to the worker. their are more consequences of firing cost .it is hard tto fire aworker,then the company becomes reluctant to hire workers. nither the company or the worker knows the true value of existance of the company or the worker in case part time job ,there is low productivity & the satisfaction for the job is also low if the cost of laying of worker is high then the company will nor hire workersso policy are designed to promote employment .

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