Assignment 3: Case Study Chapters 15–18, 5 Marks 322405

Assignment 3 Case Study Chapters 15 16 17 18 5 Markscaseletonu

Assignment 3-Case Study-Chapters: 15, 16, 17 & 18: - [5 Marks] Caselet On Unemployment Many Theories are given by different expert to explain the reasons behind unemployment. One reason of unemployment may be downswings (periods of recession) in the business cycle. Another reason behind wide-scale unemployment refers to structural unemployment. Structural unemployment arises from longer-term changes in the economy, affecting specific industries, regions and occupations. Structural unemployment often explains regional unemployment.

Some industries in India have lost their business and so employment to the cheaper imports coming from abroad. Some experts explain that new technology is a cause of unemployment which is also known as technological unemployment. The argument is that the introduction of new technology is destroying jobs and business while at the same time imports from low-wage developing countries are undercutting goods produced in this country. However, many studies may contradict this also. New technologies generally help in producing new products, or services and therefore new areas of employment.

Sometimes lesser workers may be required in some areas of production where specific tasks are taken over by machines, but rising productivity boosts overall income and then the demand for new jobs in the economy as a whole.

Paper For Above instruction

Unemployment remains a critical concern for economies worldwide, driven by various interconnected causes. The primary causes of unemployment include cyclical downturns, structural shifts, technological advancements, and global trade dynamics. Cyclical unemployment arises during recessions when decreased demand for goods and services leads to layoffs. Structural unemployment results from long-term changes like technological progress or globalization, which render certain skills or industries obsolete. This form of unemployment often manifests regionally, affecting specific localities dependent on declining sectors.

Technological progress, often viewed as a double-edged sword, has fueled debates among economists regarding its impact on employment. It is undeniable that technological upgrades can lead to job displacement within specific industries. For example, the widespread adoption of automation and robotics in manufacturing sectors such as automotive assembly lines has replaced numerous manual jobs historically held by human workers. This phenomenon, termed technological unemployment, suggests that innovation can temporarily diminish employment levels in affected sectors. However, it is equally important to recognize that technological advancement fosters the creation of new industries, products, and services, which subsequently generate new employment opportunities.

I agree that technological upgradation can cause unemployment in particular industries during the transition phase. For instance, in the textile industry, the adoption of computer-aided design (CAD) and automated looms has reduced the need for manual labor. While these technologies increase productivity and reduce costs, they may displace workers who lack the skills to operate or maintain these new systems. Nevertheless, over the long run, these technological innovations tend to stimulate economic growth, leading to the emergence of new job categories such as maintenance of machines, software development, and quality control specialists. Therefore, while technological progress might cause short-term unemployment, its overall effect can be positive for economic development and employment diversification.

Regarding the role of governments during crises, the COVID-19 pandemic severely impacted global economies worldwide, heightening unemployment rates. Many countries experienced a peak in structural and cyclical unemployment as businesses shuttered and supply chains broke down. However, Saudi Arabia demonstrated a proactive approach in mitigating the pandemic's adverse effects on employment. The Saudi government implemented various policies, including economic stimulus packages, subsidies, and zakat relief measures to support affected businesses and workers. Additionally, the government accelerated the development of its Vision 2030 initiatives, promoting domestic industries like tourism, entertainment, and technology.

Specific to employment preservation, Saudi Arabia introduced wage subsidy schemes, financial aid to small and medium enterprises, and vocational retraining programs aligned with emerging industry demands. The government also leveraged its sizable sovereign wealth fund to inject liquidity into the economy, helping stabilize employment levels. These measures proved effective in cushioning the unemployment spike during the pandemic compared to many other nations. Moreover, Saudi Arabia's focus on digital transformation and diversification of its economy have further strengthened its resilience against future crises, enabling some sectors to maintain employment levels or recover swiftly.

In conclusion, unemployment stems from multiple causes, including cyclical shifts, structural changes, and technological progress. While technological advancement can lead to temporary job losses in specific sectors, it generally fosters long-term economic growth and employment creation. Governments play a crucial role in mitigating unemployment impacts during economic shocks through targeted policies, economic diversification, and innovation-driven growth strategies. Saudi Arabia's approach during the COVID-19 pandemic exemplifies how proactive policy measures can help preserve employment and support economic stability in challenging times.

References

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