OFFERS Buy 4 assignments and get 1 absolutely FREE!
25% off

Prices from


Safe & Trusted

Introduction to Unemployment or joblessness

Unemployment or joblessness occurs in a nation when people who actively seek work are without work. A relatively high rate of unemployment is experienced by an economy during periods of recession (Floyd, 2003). There are several factors that assume an important place in explaining the changing level of unemployment in a country. Also, the government of a nation takes certain corrective measures for tackling these factors and curing the problem of unemployment. These are geographical and occupational mobility of labor, flexibility of the labor market etc. There are certain economic factors also that affect the level of unemployment. These are inflation rate, interest rates, productivity etc. the following report makes an attempt to critically evaluate and discuss the factors that assume the most important place in explain the changing level of unemployment in the UK over the last 10 years. The impact of these factors has been critically analyzed. Also, the steps taken by the government to deals with the situation have been discussed in the report.


Several economic issues are being faced by the individuals and organizations in the UK. These are the issues that have been important in changing the level of unemployment in the UK. During the long boom of the 2000s, unemployment fell to a low of 5 per cent. This showed the condition of being near full employment (Floyd, 2011). However, in 2008, the deep recession caused a sharp rise in the unemployment. It was mainly because the people were being laid off in the recession. During the prolonged recession of 2008 to 2013, the unemployment fell. However, the unemployment rate of United Kingdom has dropped to a five year low of 6.9 per cent in the quarter to February (Hardy, Lawless and Martin, 2013). The graph below shows the trend of unemployment in the UK over the past ten years.

 As such, there has been a continuous change in the level of unemployment in the UK over the past ten years from 2003 to 2013. Various economic factors are responsible which are faced by the people and the organizations in the UK. They are the following:


In the UK, consumer price inflation rose to 3.4 per cent up from 3 per cent in the February (Hardy, Lawless and Martin, 2013). Inflation is one of the biggest economic issues that the individuals and organizations of UK are facing. By eroding the value of money and assets, it makes the business adjust the prices. It disrupts business planning and makes the budgeting difficult. This is because it leads to rise in both the costs and prices. This leads to reduction in the planned investment spending. In medium terms, prevailing inflation is important in changing the level of unemployment in the UK. This is because as inflation will affect the costs, there will be loss of jobs. As the costs rise owing to inflation, the business often go for substituting labor with other factors such as new technology.

There has been deceleration in the inflation rate of UK for the sixth consecutive month to 1.6 per cent (Mallik and Bhar, 2011). This has impact on the unemployment in the UK. With inflation, the wages have also caught up for the first time in nearly four years. The businesses of UK have been impacted by the inflation. There is increase in prices that leads to higher wage demands. This is because the people try to maintain their standard of living. At the same time, the prices of raw materials such as oil, steel and copper increase. This has impacted the turnover of the business in the UK. Further, inflation has led to loss of international competitiveness. This worsens the trade performance of the organizations. As such, they cut down jobs which lead to an increase in the unemployment level in the UK.