Business Economic
On this second project of this Business Economics class, the first economics issue that I pick is on Chapter 16 Question number 5 regarding the reason that frictional unemployment important to have in any economy. Frictional unemployment is the natural unemployment that is always present in the economy which includes workers who voluntarily quit their job in order to look for better positions, basically use one job as the temporary transition to another, in this case the better one. So in this case, the frictional unemployment results from the temporary transition made by the workers and the employers. Frictional Unemployment exists because of the mismatch between the characteristics of supply and demand in the job market. The characteristics mismatch in this case are included, skills, payment, work timing, location, attitudes, tastes, just to mentioned a few. Frictional unemployment is actually necessary and beneficial in the economy because people needs time to search for the job that they want and employers need time as well to look for potential employees to work for their companies, so that’s why the employers need some time to pick the resumes and to interview the candidates that the employers think suitable and have the qualifications for the companies.
Negative fallouts of Frictional Unemployment happen when workers delay in entering the work force or even when the job mismatches are too frequent. This cause reduce on the availability of qualified people to the companies and increase the turnover and of course this will cause the productivity loss and economy as the whole, when this happen, the governments will try to find a way to reduce the Frictional Unemployment.
Let’s see some examples related to the Frictional Unemployment, people who look for the job for their first time might take longer time to search for the job that they want or suitable for them because they do not have enough experience to look for the job and they are also lack of resources to find the jobs that are available, so instead of taking the jobs that are available, the first time job seeker actually keep holding out or aim for the better job. Another example in this case would be the employers do not want to hire yet and keep waiting because they think that there are not enough qualified people to work for their companies, but in reality there are enough qualified people to work for the companies.
People need time in order to look for the job and employers need time in order to hire potential candidates to work for their companies. So, basically Frictional Unemployment occurs because people still holding onto looking for the jobs that they really want, for example jobs with good pay and employers still thinking that there are not enough qualified people to work for their companies, so the employers still looking for the candidates .
The second economics issue that I pick is on Chapter 16 Question number 11 regarding