Case #1
Type of unemployment: Real wage unemployment
Name of the victim of the current economic situation: Marek Novansky
City: Bratislava
State: Slovakia
Born in: Snina
Date of birth: 15.02.1972
Marek started working as a pharmacist. We worked for a company, which produces antibiotics. Now, he is left with his entire family jobless. His wife makes a minimum wage as a teacher, and he is now looking for a job. The reason why Marek got fired is the request from the Union. The union of workers demanded higher salaries of their jobs. They couldn’t say no, because all of their workers were qualified for their exact posts and therefore their salaries were raised. Therefore the entire industry was affected. The problem was, that the pharmacy industry couldn’t raise the salary for everyone, and had to fire some people to maintain their profits.
The graph above shows the economic situation of the market. The industry realized that this illustration shows the situation for the pharmacy industry. I have changed the actual numbers with constant variables. W1 stands for the wage the union has proposed. Q1 is the quantity supplied and q2 is the quantity demanded. Since there is more Qs than Qd, we know that surplus of workers is the quantity between q2 and q1. So the raise causes the Qd to decrease in quantity – it used to be at Eq, which is obviously more than q2 and less than q1. So there were more people employed for less money. For the overall economy it, I think, would be better if there were more people hired for less money. The people who are now unemployed, have less consumer confidence.
Case #2
Type of unemployment: Structural unemployment
Name: Borat Ragdo
Permanent address: Klionskoyue 15
City: Turela
Country: Kazachstan
Born in: Kazachstan
Borat has 13 kids and 12 siblings. He is very talented in the area in microscopic production. He used to be very happy because he had a good paying job. Everything has changed when the company moved to the capital city and Borat couldn’t go and live there because there was no way for him to travel. No roads and no airports caused him to be left jobless. He has now hard time getting a job, because his standards are high and there is no job opportunity for him since he is specialized in microscope production.
Demand for workers in the city fell to zero. Since the company moved somewhere else, all the workers could move, work and live in the new place, or could stay at home and try to find another kind of job.
Borat could take the horse that goes once a day and go to the nearest city from which he could take the tram. This would allow him to travel to the place where the company he used to work for is situated. He could get his job back easily, because he already had experience in this field. If Borat doesn’t want to move and wants to stay with his family, he will have to give up the chance to work for the same company. He might find a job where no skill is required – which will be paid low, or take the unemployment benefits. These benefits are not enough to survive, and therefore Borat has to decide.
Case #3
Type of unemployement: Frictional unemployment
Name: Hans Plowiczky
Permanent address: Bergstrasse 23
City: Nordsee
Country: Austria
Born in: Poland
Hans lives in Austria for 5 years and is qualified as a doctor. The only problem with him is his greediness. He resigned because he thought that he can get a better paid job with his qualification. So Hans is now jobless, still unemployed, yet his chances to get a job he’s requesting are very high. In Austria, doctors have good salaries. Maybe he went to the wrong hospital, where the salary wasn’t reaching his expectations or felt uncomfortable and therefore wanted to go somewhere else. He should not have any problems with getting a job, yet he wants to be sure that he finds the right job – and he takes time to find it. So even if he can get a job as soon as he wants, he is still unemployed.
On a graph, we would find that people like Hans are still demanded, yet the person individually looks for the job that is good for him from each side. So he is the one who is deciding – because is demanded.
Case #4
Type of unemployment: Seasonal unemployment
Name of the victim of the current economic situation: Jakub Cszynek
City: Budapest
State: Hungary
Born in: Hungary
Date of birth: 16.04.1985
Jakub was a swimmer since he was 5. He has a girlfriend and they lived together in an apartment in the downtown in Budapest. During summer, Jakub travels to Balaton which is the biggest lake in the entire Europe. In the most exlusive parts, he is one of the life guards. He gets a lot of money, yet he can’t survive the whole year just with the money he makes during summer. But he doesn’t feel like working during the rest of the year, because government pays him unemployment benefits and with the money he saves from summer and benefits he can manage pretty good living standard. In this case, the government might have decreased the benefits for the people who are in this group. This would force them to find a new job during their low season. The problem with this is that the government would probably have a hard time realizing this kind of reform. It would be hard to determine exactly who are the people who fall into the “seasonal unemployment” and who doesn’t. Perhaps they can create a system where it would check the past jobs for the past 4 years and see who is constantly in and out. He is quite satisfied, but for economy he is a potential harm. Since he doesn’t make money all year, he doesn’t spend that much. And when he spends, it’s most likely to be the money from the government. The government also looses the chance to invest in something else – opportunity cost.
Case #5
Type of unemployment: Demand Deficient Unemployment (cyclical)
Name of the victim of the current economic situation: Frodo Paliento
City: Madrid
State: Spain
Born in: Spain
Date of birth: 12.07.1965
Worked as a supervisor on an assembly line. He lives with his two brothers who all work on the same plant and seem to enjoy it. The biggest problem appeared when they all got fired because the plant got shut down and moved to china. Now, they are jobless and are trying to find a job in a factory or a plant. Since the plants were the main part of the world’s economy, and were moved, the unemployment has risen to its highest point. Government could only provide free training for all the workers, because they are not demanded as workers anymore. This is caused by the decreased aggregate demand for workers. Frodo would then be able to be trained and accepted other jobs if provided. This kind of unemployment is connected to the whole country’s demand, it is considered to be cyclical. Less demand for workers makes the workers buy less, earn nothing, getting unemployment benefits, they save money – withdrawal for country’s economy, last, but most importantly less demand for everything. This destroys the economy as a whole, and companies want to save money because people are not buying as before.
