Regardless of the economic state of affairs, unemployment is present in every country and is only differentiated by the unemployment rates in different countries. Unemployment is contingent on numerous factors, and this research is explicitly focused on these aspects. The evaluation of these aspects is crucial to the current research for the reason that it would help highlight the weak spots of the modern employment apparatus and suggest novel ways of dealing with unemployment.
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The research is conducted to identify and evaluate the elements that might help to decrease the unemployment rates on a local scale. In other words, the researcher is investigating the subject to find several universal approaches designed to eradicate (or at least minimize the rates of) unemployment. One of the possible ways to do that is to implement numerous policies that would affect all spheres of human life. These would include specialized education and training intended to diminish organizational unemployment, a flexible labor market that would allow hiring and firing employees in a much more trivial manner, and a lower minimum wage.
Fiscal and economic policy
Nonetheless, the author of the research pays maximum attention to the probable fiscal and economic policies that would meaningfully improve the current situation. The first policy recommended by the author is aimed at the boost of aggregate demand by cutting interest rates. This policy would generate investments and economic progress. Lower interest rates will cause the devaluation in the exchange rate and make imports more expensive (making exports cheaper at the same time).
Another fiscal policy would affect taxes to boost aggregate demand. On one hand, this approach would motivate consumer spending. On the other hand, this approach would only be effective if the tax cut is backed by increased efficiency. In other words, if the country’s economy faces fiscal dilemmas and complications, there is a very low chance that the tax cut allows advanced consumer expenses. The last approach is based on geographical grants.
On a local scale, this means that businesses would be encouraged to invest in weak areas to provoke economic development. These aspects have to be reviewed in detail to be analyzed and evaluated adequately. Nonetheless, the researcher believes that these policies are competent and have value in the real-world economic context.
There is one more major aspect that should be taken into consideration when reviewing the policies intended to minimize the unemployment rates. Foreign direct investment (FDI) revenues are recognized by numerous economic experts and businesses as a crucial characteristic of economic development. This strategy also boosts the presence of new employment opportunities, improves technology allocation, and increases the total rate of economic development in the countries that employed the FDI approach.
The existence of extraneous businesses produces rivalry with resident organizations. Taking this into account, local businesses are required to utilize their current assets more competently and implement innovative technologies. The consequences of FDI include the upsurge in the gross domestic product (GDP) and an increase in the employment rate. On the other hand, FDI may hurt the country’s economy. FDI seeking productivity may trigger more idleness as a result of export swap and frequent imports than hiring using supplementary exports to other countries.