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The Relationship Between Gdp Growth And Unemployment Growth

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My Idea on Why GDP Growth No longer is a Key Indicator for Job Growth

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The Relationship Between Gdp Growth And Unemployment Growth

  1. 1. The Relationship between GDP Growth and Unemployment growth.<br />GDP Growth is made up of Goods and Services throughout the Economic Market.<br />Goods: <br /><ul><li>there are many manufacturing techniques’ that Companies for Production
  2. 2. These vary from Labour intensive to those needing a light Labour force
  3. 3. Goods are produced more efficient and Technological advancements have taken over some of the Labour Skills that were once performed by people.
  4. 4. International Trade Markets have increased the Competition between Sellers of goods and there for diminished Market Share for many domestic companies. Thus decreasing the Potential for Profit Maximisation and Production Maximisation of Companies
  5. 5. Demand for goods are low – Leading to less production and lower workforce
  6. 6. Poor Quality
  7. 7. Unstable Market
  8. 8. Less Disposable income (lower wages and Tax payments)
  9. 9. These Elements have lead to an erosion of the typical Economic use of GDP being a direct link as an Indicator for Job Growth in a current world governmental economy as previously used.
  10. 10. Services:
  11. 11. In 2010 and the years ahead Services that are included in the GDP are services that no longer need Human Labour to perform.
  12. 12. Certain Computer services and Telecommunication Services
  13. 13. Services like Goods are being run more efficient to stay in touch with the Competitive Market leading to a lower Labour force needed by Service Companies
  14. 14. Less Demand due to lower incomes of Customers and customers scaling back their personal Spending in this Economic Environment
  15. 15. Some services can be outsourced overseas so will go where the Labour Force is Cheapest for the same Quality of Labour and Levels of Production
  16. 16. These Elements add on to the reason GDP growth can no longer be used as a Key Indicator for a decrease in Unemployment, or in other words an increase in Jobs for people.
  17. 17. Summary
  18. 18. GDP for many years has been used as a Key Indicator for Economist and Governments as a “Lead in” Indicator for what will be a “Decrease in the Unemployment rate”. This can no longer be the “norm”.
  19. 19. GDP should be broken up as too a Portion derived by Production of Goods and a Portion Derived by Services. The Services Section should be Broken up to those Services provided by human Labour and those attained by Electronic Services that require, no to minimal human labour.
  20. 20. This will provide a better indicator for increase in GDP that will lead to a reduction in the unemployment rate.</li></ul>Alberto Kang<br />Special Assistant<br /> Profile<br />YouTube Channel<br />Facebook<br />Google Profile<br />Twittter<br />Flickr<br />SlideShare<br />