Explain The Up-Ward Unemployment Trend In The World Using A Theory - 825 Words

Explain The Up-Ward Unemployment Trend In The World Using A Theory (Term Paper Sample) Content: NameProfessorUnemploymentIntroductionThe Global unemployment rate was expected to rise from 5.7 to about 5.8 percent this year. This represents 3.4 million increases in the number of people that are jobless. Overall, the number of unemployed people in 2017 was expected to stand at 201 million globally(International Labor Office, 26).This has been the trend since the 2008 global recession, and that unemployment has been a significant challenge in most countries(Navarro,2012).As per the International Labour Report(ILO), there has been a significant rise in the rate of unemployment in most European countries and that economic crisis the US faced has had a big impact as far as unemployment is concerned. To solve the unemployment, the cause must be established. Therefore, what is the cause of unemployment in the Globe?There is considerable theoretical based debate regarding the causes, consequences as well as the possible solutions as far as unemployment problem is concern ed. Both the classical and the neoclassical economics see market mechanisms as reliable ways of solving the unemployment problem. They are against interventions such as unionization, wage laws and such like regulations because they believe that such efforts hinder hiring of people. Keynisians economics notes that unemployment is cyclical and recommends government engineered interventions such as financial stimuli, expansion of the monetary policies and funding of job creation by the government. But according to the Marxists, causes and solution to unemployment problem require the World to abolish Capitalism embrace either socialism or communism.How Marxist explains the cause and upward trend of unemployment in the GlobeAccording to Karl Marx explanations on economics, the capitalist investments can be grouped into two: one that hires workers and the other that rents/ buy the means of production such as raw materials and machines (Myers,223).Today, with continued growth in capitalism , there have emerged processes that have contributed to the reduction of that part that is responsible for hiring workers. One of the factors is competition. Competition results in a concentration whereby two large or small companies merge into one single large company. Such a company enjoys economies of scale. It means that large amounts of company's capital are only operated by just a few workers (Myers, 206).Given that to be the case, most workers will lose their jobs. Nowadays the incidences of companies merging are common and whenever it happens the guaranteed result is that there are always layoffs. Given that this is true, Karl Marxi explanation of capitalism as the cause of unemployment makes sense in today's World in that it results in the competition which causes companies to effect changes that see workers getting laid-off.Karl Marx, who is most often given credit for giving socialism struggle a scientific basis, also argued that capitalism needs unemployment in that "the workings of capitalist production for profit creates unemployment, even in the best of economic times"(Matthews, 543).His theory notes that capitalists are in constant competition amongst themselves with the aim of creating huge profits. So, great productivity driven by competition is another factor. To achieve this, each capitalist strives to lower the costs mainly striving to increase labor productivity. To a large extent, this is true. In the present times, the capitalist has come up with different strategies to ensure that they make even larger profits which will make them stay ahead in the competition that they are always in. One of the key strategies that help them to achieve their goals is by switching variable capital for fixed capital (replacing human labor with machines (Matthews, 493).There is growing desire to increase production and cut down the cost of production. To affect this, most companies/organization/institution replaces human labor with the machine in that the y help cut down production cost and at the same time increase productivity. That simply means they will make more profits. Therefore, the capitalist will have created a pool of jobless workers who they can hire when the economy is good and fire when there is crisis. Also, they will have the power to control wages. They can get cheap labor which goes a long way in maximizing profits. Capitalist has created and enjoyed such a situation.Other economic explanationThere are other explanations regarding causes of unemployment. These are structural, cyclical, technological and seasoned employment (OpenStax Economics, 160).Structural unemployment occurs due to the existence of a mismatch between what a job requires and the skills that people available posses. This is blamed on geographical and occupational labor mobility. Also,lack of investment into training and equipping the unemployed with relevant skills. Technological reasons also exist in that production-enhancing technology causes la yoffs and create une...