A simple case of supply and demand - the cause of unemployment

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You may be aware that redundancy figures have boomed over a minimal period of time and there is evidence to suggest that this boom is going to continue. Today I am going to explain why this is the case and why experts speculate that it may continue for some time.
The primary factors forcing up unemployment can be put into two classifications: They are ‘supply-side’ factors and ‘demand-side’ factors.
Supply-side factors are relevant when an organisation is unable to fulfil product orders for the same cost as their competitors. There is still a market for the company’s service, but it is available cheaper elsewhere. Minimum wage laws stop the employer from lowering employee salaries and so the company is often forced to lose employees.
Demand-side factors occur due to reductions in demand for a service or product provided by a company. This affects the company’s revenue and hence, they must reduce outgoings. This is often achieved by downsizing.
An example of ‘supply-side’ would be the outsourcing of call centres. Some companies now opt for outsourcing call centre services to countries like India, due to the vast difference in cost for the same service. Many individuals are disgusted by this, but if you owned a call centre and could cut costs by as much as 50% would you not be tempted? Improvements in the Internet and telecommunications has made this possible, but it does have a detrimental effect on our own economy.
An example of ‘demand-side’ is the new car market. Because of the perception that our economy is in crisis, many people are now apprehensive about buy newly produced cars, opting for cheaper second hand cars, or putting off upgrading their motor vehicle altogether. If you have researched buying a brand new car recently you will have seen that there are fantastic offers available, as the manufacturers and distributors are struggling to generate custom.
Although this is the reality there is little or nothing we can do about the situation. However, by being concious of it, we can look at alternative ways of earning additional income, taking advantage of industry trends.
If you have ever thought about building your own business then you would benefit greatly from identifying the impact that technology and the Internet is having on the economy and business. What you should observe is that most successful businesses today rely on the Internet to market and promote products. This enables them access to a global market and with the emerging information age it is sensible to make use of the Internet whenever possible!
I hope this article offers you beneficial insight, if and when you consider starting a home business in the future.

Article Source: http://depositarticles.com/

Author: Dr. Andrew Smith, director of WINOnline.biz/. Get your free report, "secret of the ratrace disclosed: escape the 9 to 5 forever" from => www.winonline.biz/

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