I Need A Job 2021.04.29

Unemployment refers to the state of not having a paid job, and the unemployment rate refers to the percentage of unemployed members of society within the total labor force. A rising unemployment rate affects consumption in the private sector and leads to a worsened economy, which creates a vicious cycle of high unemployment, reduced consumption, and low economic growth. A rising unemployment rate also puts a heavy burden on society, resulting in higher crime rates, suicide rates, and social welfare spending by the government. Consequently, government spending is increased. As a government’s revenues exceed its expenditures, a budget surplus is created; conversely, a deficit results if the government spends more than it collects. A budget surplus suggests that the country’s finances are being managed effectively and is one indicator of economic health.

The chart above lists countries with very high unemployment rates since 1995; these include South Africa, Spain, Turkey, Brazil, and Canada, which recorded unemployment rates of 28.74%, 15.67%, 13.92%, 13.67%, and 9.48%, respectively, as of 2020. The chart attempts to compare the trends of the unemployment rate and government budget surplus/deficit for the years indicated. As employment surges, the government budget usually experiences a deficit, and the governments of these countries with high unemployment rates have indeed been experiencing budget deficits most of the time. Norway and Denmark are among the European countries with relatively low unemployment rates, and their government budgets have been mostly in surplus.  Very few countries nowadays are able to run budget surpluses, as most of them choose to run budget deficits while adopting expansionary fiscal policies, such as increasing government spending to implement various public infrastructure projects for the purposes of stimulating private investment and revitalizing the economy. Running a budget surplus or deficit is not necessarily good or bad per se, but prolonged surpluses or deficits are sure to result in severe socio-economic problems.

Taiwan’s unemployment rate was 3.85% in 2020, an increase of 0.12% compared with the year before, and represents a record high over the past four years. This indicates that the country’s job market has indeed been adversely impacted by the COVID-19 pandemic. Compared with the global unemployment rate in 2020, which was 6.47% (1.1% increase year-on-year), however, Taiwan’s employment market remains relatively stable.

Being out of work takes a heavy toll on the affected individuals and their families alike. Not only their personal financial conditions but also their social life and even health could suffer greatly as a result. In addition to being an important research topic in economics, reducing unemployment is also one of the main objectives in the governance of a country.