X theory and Y Theory

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University Degree Business and Administrative studies

Frictional unemployment occurs when people are seeking a change of job and are in the process of looking for another. This is the kind of unemployment where people are in between jobs. It is also something that re-entrants of the market. Brue, Flynn and McConnell (2009, p.524) stated that is a kind of ‘wait unemployment’, where worker is only temporary loss of job, short term.

 This can be due to the nature of the job, remuneration, expectations, skills, and location amongst others. Employing processes, such as interview will take time to complete for both the employer and employee. This results in the temporary loss of a job. And if the situation does not improve, it will cause productivity and efficiency problems to the organization, due to the lack of workers and/or low morale within its employees. However, there are also positive impact to the economy, as when workers are content with their jobs, they increase their productivity which can contribute to both the organization and GDP. (Brue, Flynn and McConnell, 2009). This can be supported by Singapore’s Ministry of Manpower in 2006 and 2007, although the turnover or resignation rate for was maintained at 2%, GDP increased to 0.6% and average wage is up from 3,544 to 3,773. (MOM, 2009a, b). Base on the data, the resignation or turnover rate does not have negative impact on the country economy.

Structural unemployment happens when there are more workers than positions available. This is a mismatch in the skills of the workers and the requirements for the job. In this case, there are either not enough workers equipped with the skills to perform the task, or there are not enough positions to meet the large number of people who qualify for the job. Skills are the distinctive mark of structural unemployment. MOM (2000) highlighted that this poses a problem to Singapore due to fast pace of technological changes.Workers with lower level of education are likely to have problems meeting the skill requirements of the new jobs created. In 2008, 19.6% (SDS, 2009a) of Singaporeans age 25-39 received secondary school education. This is a problem for the government as these workers might find themselves without jobs as they are not equipped with the necessary skills for the jobs that are available. Hence, the rise of structural unemployment in the country. We shall elaborate of the remedies for structural unemployment shortly.

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To better grasp the economic theories of unemployment, we can look at real problems, such as the implications of unemployment in Singapore, and try to apply what we have learnt. Let us first, understand what exactly the newspaper article meant when they mention unemployment. Unemployment rate “gives the fraction of labour force participants who are unemployed.” Following the current trend, at the 2nd Quarter of 2009 we may have 12,400 unemployed workers. Despite the large number, the recent MAS survey forecasted the total unemployment rate for this year to be 3.8%, which is a decrease from the 4.2% unemployment rate ...

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X theory and Y Theory
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  • Level
    University Degree
  • Subject
    Business and Administrative studies
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