Macroeconomics Article Commentary Essay

The vanquish problems surrounding youthfulnessfulness unemployment in Scotland atomic number 18 non over, a Scots authorities Minister told MSPs today.Despite statistics showing a rise in study overs on offer, Minister for Youth Employment Angela Constance said that such a claim would be foolish.She said that improvements in Scotlands economy would crack up some problems of getting offspring people into flex.But she added that, in the long, work is submited to help those lining considerable barriers.Constances remarks came as she appeared forrader Holyroods Education Committee to answer questions on the Scottish political science activitys Youth Employment Strategy, and ahead of the publication of the latest job figures tomorrow.Figures show that 102,000 young people are currently unemployed in Scotland. That represents around one in four of those aged 16-24 who are frugalally active.Given the recent economic indicators that suggest things are slightly better in te rms of vacancies, do you think were over the or so challenging year, and bewilder met the greatest challenge?Ms Constance said she would not be foolish enough to look into her crystal ball and pee-pee such predictions. Well deal with what comes our way, she said.Pressed by Labour MSP Neil Bibby on whether she trustd thither is a youth unemployment crisis in Scotland, Ms Constance said What I believe is that we postulate to be in this for the long haul.She told MSPs there were around 20,000 young people from disadvantaged venturegrounds who face considerable barriers to getting into work.When we think of youth unemployment, some of that will be resolved when the economy picks up and gets better, she added.But youth unemployment is always two and a half to common chord times higher than all-age unemployment.There is always an final payment there that we need to tackle and it is long-term action we need.IA Commentary 2Youth unemployment requires long-term actionJust like a majo rity of all countries, Scotland is facing struggle in their economic recovery after the recession. The problem be addressed in the chosen article speaks about the youth unemployment crisis that is occurring in the country. Demand in the conductr sector is not what the main problem is. Apparently, the youth (age 16 24) bring forth reached unemployment (ability to work but dont have a job) rates of 25% repayable to disadvantaged backgrounds. This can well-nigh likely be assumed that these people have had a overleap of bringing up and do not have the sufficient skills to apply for the desire jobs. This could be labeled as a skill mismatch between workers skills and employers needs. Unemployment can have a significant negative impact on a countrys economy and society.As the unemployment level rises, the more people are eligible for benefit payments (money given to the unemployed to consume basic necessities) which take away from the disposals revenue and pass power. Secondly , and most importantly, unemployment can cause a waste of resources and reduce the races output which will lower the economys GDP. With this hurt of the nations output, the economy will be producing within its PPF (Production curtain raising Frontier ability to produce ALL available resources efficiently) and lowers/decreases economic growth. The following labor market diagram can depict what unemployment the market is facing.As seen in the diagram, the labor market is shown in a simple AD/AS model. At Qe, the labor market is at equilibrium as the demand for labor matches the add together. Though, in this case, the supply of labor has decreased make the AS curve to shift leftwards. This shows that the market is not running at full efficiency as production is being hindered. The resource of workers are not being allocated at high efficiency because they are wanting(p) the factor of production of education. These factors of production are inputs that are employ in the productio n of goods/services.The suggested solution of the article is to seek long-term action to acquire the loss of supply/productivity in the skill deprived market. Government intervention seems to be the solution to correct those workers facing considerable barriers or lack of education. The reallocation of the government fiscal policy to boost economic activity will have to see a greater share of revenue towards the education sector. The fiscal policy is the use of the government intake and taxation to manage the economy. In this case, a supply-side policy will need to be rearranged to improve the quality of resources which would education in this situation.A stop of economic austerity will definitely be needed as the government will be forced to lower discretionary disbursal (expenditure that is adjusted annually) in early(a) sectors to assure that the current and future youth have better education and provide the economy with better qualities of production. utilise the same labo r market diagram, you will see the result of change magnitude the quality of the factor of production (education) as the supply of able workers rises back to equilibrium.The diagram shows the effect of re-allocated supply-side fiscal policy (policies to alter the level of supply to create a stable economy) towards increased spending for the education sector. The government can lower the number of un-educated workers/youths that lack adequate skills by subsidizing education and implementing better training for jobs. Currently, the aggregate supply for young Scottish workers lies on the AS Labor curve as firms cant betroth the un-skilled workers.This leads the real GDP, or the output of the country to be lower as goods and services arent being produced at maximum efficiency due to the lack of workers. The long-run solution that is alluded in the text would definitely be to improve the education system because currently the economy is running on spare capacity (producing at less than maximum efficiency). The economy would have to bare with the supply crisis until the workers have acquired the adequate skills.If the re-evalution of the fiscal policy is used by the Scottish government, then they can potentially fix this skill-mismatch issue and avoid disastrous economic problems. Lastly, to ensure economic safety, the Scottish government should restrain from borrowing money and spend money on other projects to allow them to fix their problem. This could hinder the development in other sectors as the money available to them should be placed towards education.