• Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

Economics Commentary

Extracts from this document...


COMMENTARY COVERSHEET Economics commentary number: HL Number 3 Title of Extract: Sharp rise in unemployment as financial crisis hits job markets. Source of extract: Guardian.co.uk Date of extract: 15/10/08 Word count: 677 words Date the commentary was written: 06/10/08 Sections of the syllabus to which the commentary relates: Section Candidate name: Atin Garg Candidate number: Commentary Extract Sharp rise in unemployment as financial crisis hits jobs market British unemployment today posted its biggest rise since the country's last recession 17 years ago as the financial crisis filtered through to the jobs market. Official figures showed unemployment measured by International Labour Organisation (ILO) standards rose by 164,000 in the three months to August from the previous quarter to stand at 1.79 million. The rise took the jobless rate up half a percentage point to 5.7%, also the biggest jump since July 1991. "These numbers are truly horrendous and much worse than I had feared," said David Blanchflower, a labour market expert and member of the Bank of England's monetary policy committee. He told guardian.co.uk his earlier prediction that unemployment would rise to 2 million by Christmas now looked conservative. "Unemployment will be above 2 million by Christmas. I am particularly worried at the 56,000 rise in the number of young unemployed people. ...read more.


These numbers are falling off a cliff." In a sign that consumer price inflation - now at a 16-year high of 5.2% - is not feeding into wages, annual average earnings growth slowed to 3.4% in the three months to August, its weakest in five years. "As for pay pressures, the average earnings numbers remain very subdued," said Philip Shaw, the chief economist at Investec. "The labour market appears yet again not to be an inflationary threat to the economy which helps to justify the cut in interest rates last week." Economists believe it is going to get worse. Thousands of jobs are being lost in the City, where banks have merged or collapsed, and on the high street, where growing numbers of retailers are going bust. Manufacturers laid off 46,000 workers in the three months to August, taking the total number of manufacturing jobs to 2.87million, today's figures from the Office for National Statistics showed. Job losses are spread across the economy, with Cadbury announcing 580 job cuts this week and ITV cutting about 1,000 jobs. The Centre for Economics and Business Research estimates 62,000 financial jobs will be lost by the end of next year. Nigel Meager, the director of the Institute for Employment Studies, said: "No part of the country is spared. ...read more.


But nevertheless, the British government will find the goal of full employment difficult to achieve. This would be to reasons such as the unavoidable occurrence of inflation when trying to reduce demand-deficient unemployment. The limitations of using Fiscal policies to raise the Aggregate demand would also hinder the act towards attaining full employment. Examples of these would be time-lags and the crowding out effect. The short-term impacts of this situation would include reduction in the government expenditure, arising due to more money being provided as unemployment benefits and also due to less tax revenue being received by them. Another short-term effect would be the opportunity cost arising in terms of output foregone and the indisputable inefficiency. The long-term impacts of this sudden unemployment include the individual and social costs born primarily by the unskilled and lowly-paid workers. These workers will certainly find it difficult to look for suitable jobs in the future. Even the impact on poverty and income distribution is enormous, due to a large majority of workers within the primary sector being made redundant. In Britain, for example, a majority of the real estate workers are being dismissed. Thus there has stemmed an unequal impact of unemployment in terms of region, urban/rural, gender, race and age. This could be particularly hazardous for in determining the racial distribution of Britain. ...read more.

The above preview is unformatted text

This student written piece of work is one of many that can be found in our International Baccalaureate Economics section.

Found what you're looking for?

  • Start learning 29% faster today
  • 150,000+ documents available
  • Just £6.99 a month

Not the one? Search for your essay title...
  • Join over 1.2 million students every month
  • Accelerate your learning by 29%
  • Unlimited access from just £6.99 per month

See related essaysSee related essays

Related International Baccalaureate Economics essays

  1. Extended Essay Economics

    In Venezuela, President Chavez has expressed his belief that oil companies such as Exxon-Mobile had been robbing Venezuela of its resources and taking profits out of Venezuela. This red tape is often common in developing countries as they try to prevent any exit of capital.

  2. Strategic Business Management - Cadbury

    experience in senior legal, marketing, sales, strategy development and general management roles within the Company. Todd was President and CEO of Dr Pepper/Seven Up, Inc. between 1997 and 2000 and Chief Strategy Officer between March 2000 and May 2003. Todd's business leadership, legal and commercial expertise make him well placed

  1. Economics HL - IA

    Firstly, if the economy is growing at a very fast pace, it is likely that, in Diagram 2, the AD� would shift upward. The SRAS curve wouldn't shift, however, because the higher interest rates haven't discouraged investment sufficiently. On the other hand, if the ECB intervenes, unemployment will rise further.

  2. World Economics assignment. The core economic issues that are focused on in this ...

    certainly find it difficult to sustain growth, they may well have benefited from aid from the World Bank or IMF. Were they clever enough to pay off all debts they might have owed externally or as close to it as they could before being exposed to some fairly fierce competition(27)."

  1. Macroeconomics Economics Commentary - patterns in America's unemployment statistics

    Another yet the most principle core dispute raised in the article is the fact that blacks and teenagers are being discriminated suffering from the highest rates of unemployment. Teens topped a high unemployment percentage of 25.4% whilst blacks a little lower tallied at 15.8%.

  2. What has happened to Canada's demographic over the past 50 years? What are ...

    Main Areas and Reasons for Labour Shortages ________________ According to HRSDC (Human Resources and Skills Development Canada), there are multiple areas which are facing labour shortages, all at a national level. Also, these occupations have increasing wages, along with low unemployment rates.

  1. The Benefits of Microcredit to Bangladesh

    Micro-credit has succeeded in graduating the poor from poverty level to a self sustained position. Builds Trust among Poor: Grameen has put trust back into the picture. The working of the Grameen is largely through trust. It believes in the enormous potential of each and every human being given enabling

  2. Macroeconomics Article Commentary. The worst problems surrounding youth unemployment in Scotland are not ...

    Demand in the consumer sector is not what the main problem is. Apparently, the youth (age 16 ? 24) have reached unemployment (ability to work but don?t have a job)

  • Over 160,000 pieces
    of student written work
  • Annotated by
    experienced teachers
  • Ideas and feedback to
    improve your own work