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03 From the Editor’s Pod

17 Grade BoosterShould you focus on the beginning words of a question or the ending words of a question? Of course, it depends on the wording of a question, but most of the times it’s the nouns that matter—those placed at the end of the question. Understand the importance of these words and how they influence the structure of your answer.

24 Essays Re-ModelledWhat better way to check your understanding of concepts related to unemployment than by trying your hand at the two essays set within the scope of unemployment? The best and most effective way to learn is by understanding how a particular section of content is applied to address a particular question. Get a sense of the key explanations needed, the best way to put them across to the examiner, as well as how to evaluate on the magnitude of the problem.

10 Prolonged Unemployment When unemployment drags, the pains and costs become much higher. Social problems of theft and loss of the ability to place food on the table for a prolonged basis all add to the need to find a quick solution to the problem. However, as the cause of the prolonged unemployment tends to be structural—indicating deep-seeded competitiveness—it’s no quick fix when dealing with prolonged unemployment, as this article shall explain.

04 Mission Impossible? Counting UnemploymentBefore we dig our hands deep into the messy problem of unemployment, let’s get another mess sorted out—how exactly are unemployment figures calculated? If so much of economic policy and analysis is based on the unemployment figures each month, we gotta make sure the way its counted is not in itself a problem to deal with. Otherwise we might end up chasing our own tails and working with inaccurate unemployment data.

18 Theory vs. RealityInflation, Unemployment, and NAIRU The most basic relationship between inflation and unemployment is that of a trade-off. As resources get used up and unemployment drops, inflationary pressures start surfacing as a tight resource market renders the need to raise wages and cost of raw materials. Does this theoretical trade-off exist in the real world?

32 Unfounded Productivity Fears? Productivity is the buzz word—a word driving many economies towards greater competitiveness and efficiency. It means that operations are lean and that resources are not wasted, but every ounce of valuable output is forced out, so it’s a good thing. Why then do we have big debates about the ills of increased productivity? Let’s find out the good and the bad of increased productivity.

38 Minimum Wage and Unemployment More and more countries facing rising income inequality have succumbed to the need for legislating a minimum wage. If some countries are putting a minimum wage in place, perhaps the effects on an economy need not be harmful. Yet there is still a general resistance towards a minimum wage—especially from employers, and we find out why. We also put the minimum wage into perspective as an unemployment issue and the relationship between the two.

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REGULARS FEATURESOn the Cover

Printer KHL Printing Co Pte LtdInsights Magazine is published by MindLever Education Centre Pte. Ltd. All rights reserved. No part of this magazine may be reproduced without the written permission of MindLever Education Centre Pte. Ltd.MICA 128/08/2010

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Editor-In-Chief Juliana Foo juliana@mindlevereducation.com

Design Director Mark Jason Vargas

Contributing Writers Juliana Foo Jaclyn Wee Tricia Wong

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ECONOMICS BROUGHT ALIVE!

Is unemployment a worse problem these days? As economists, we calculate the cost of unemployment in terms of opportunity costs and loss of GDP, but do we really know the social pain and stigma caused by

unemployment? Unemployment is a scary problem, as

it means that families have no means of subsistence and worsens income inequality. Unemployment means no income and as a consequence, no ability to afford basic necessities. It can be said to be a worse problem compared to inflation because if inflation is accompanied by

jobs, people still have a means of coping. Being employed brings dignity to a person and having dignity solves a basic human need beyond economic measure—and being unemployed can destroy the will to survive.

And what if the unemployment is prolonged? The costs start looking almost insurmountable. That seems to be the general sentiment today in Europe, where eager young people, graduating with top honors at top universities, find a lack of employment opportunities. Countless resumes offer no solution, to the point where many are entertaining thoughts of leaving for other countries where jobs are available.

In that sense, unemployment is an obvious problem that can massively affect many aspects of an economy’s outlook—whether it’s optimistic or pessimistic—in turn affecting consumption and even where people decide to live. Such a

problem that is stark in its negative effects, and people seem to be encountering new issues and challenges in modern times.

There seems to be more unemployment, more demand deficient unemployment, more structural unemployment, more part-time and flexible employment, and more job insecurity—all bad news. What is happening and can we make sense of what is happening?

It’s a challenging task to uncover the various aspects of unemployment, but we have taken it to task in this issue on unemployment. Learn all about how the labour market is changing and how governments are increasingly faced with a more and more challenging problem of unemployment and the unenviable task of creating jobs.

Your Editor-In-Chief,Juliana Foo

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FROM THE EDITOR’S POD

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