Particularly low national employment rates may signal a long-lasting depression and underdevelopment.
The kind of job of a person is one of the determinants of his belonging to social groups.
If considered in terms of the number of people, employment is purposefully divided along principal 8 axes:
Along their professional life, people are hired, change job (internally or externally to their organization) and finish their career. In many countries, they thus become pensioners and receive pensions from Social Security or private funds. Accordingly, important events for employment dynamics are hiring, firing and retirement, which in turn means that labour market economic models should include routines for hiring, firing and retirement.
also important to monitor whether groups of workers face unhealthy conditions,
too long working hours, sexual harrassment, and other humiliating conditions.
An assessment about Filipino domestic workers overseas is here.
Changes in the composition of employment can happen even
if the total remains unchanged.
important role is played by institutional arrangements (as laws, contracts
and collective negotiations) on how to react to slow-downs in GDP.
in a certain activity may be ceiled up by the number of employable skilled
people and by timing, contents, and effectiveness of vocational training.
General population dynamics is a very broad framework for employment and should not be used as a proxy for its dynamics, since demographic variables are extremely slow in changes, whereas employment reacts to economic climate.
The relationship with wages is twofold: higher wages may reduce the incentive for firms to employ but, conversely, high employment may give more power to employees in wage negotiations, thus increasing their remuneration.
Employment creation happens both in the private and the public sector, while policies and rules on the labour market and the general economy exert an impact on both. Politicians promising job creation may mean to foster public expenditure for goods and services produced in the private sector, thus increasing the number of jobs there.
High levels of employment rate and longer working hours mean, also at
the same wages, a larger income for employee. Income distribution gets
more equitable with a sharp reduction of poverty.
conditions usually improve and people have confidence in maintaining their
jobs and even getting better ones. This perspective is conducive to investment
in human capital.
As we said, in this environment it is likely an increase of wages. Consumption of employee will be boasted but global consumption may follow a slower path if reduction in other income source takes place. Global consumption depends on consumption/saving attitude of different social groups and their income share.
Happiness at the individual level is linked to fair working conditions, in terms of stability, personal relationships with colleagues, suppliers and clients, as well as of the pay and the actual content of operations.
The willingness of voters to confirm the current government can be influenced by the labour market conditions. In particular, a rising unemployment can make the voters less likely to support it, with growing anger and anxiety. Jobless recovery makes the incumbent particularly vulnerable, because GDP rise would authorise to boast success, whereas people will be unwilling to recognize it because of the difficulties in finding jobs.
Employment has always grown, but at a very different pace according to
countries. Where its growth has been the highest, reduced productivity
growth have usually kept GDP dynamics low (often
from an already low level). Where its growth has been the lowest, productivity
has usually (but not always) been high with a relatively good GDP performance
(often from an already high level). In between these two extremes, employment
growth has been matched with any other situation.
In many countries, employment has followed short-term GDP dynamics, especially in prolonged recessions when a fall in employment takes place, with more moderate growth than GDP along growth path in the long-term, because of increases in productivity.
In other countries, employment has been static at the same level for some decades, with GDP dynamics mirroring itself only on productivity.
It is expected that "green jobs" in environment-related clean sectors will play an important role in overcoming the present crisis linked to climate change and that innovative economic policies should maximise the co-benefit of employment and environment protection.
As recession hits harder, perspectives gloom, and strategic decisions on restructuring take places: the number of firing rises dramatically.
is often in this case that a fall in employee consumption is not counterbalanced
by an increase of other groups' consumption, since also they are touched
by recession. Through the Keynesian multiplier, recession worsen.
recovery, firms exploit better their production capacity and personnel,
thus GDP can growth without new employees and machines ("jobless
recovery"). This is particularly true if recovery was achieved by
a fall in wages, a rise in profits and a more un-equal income distribution,
so that GDP growth is led by a small
number of purchase of higher-quality goods purchased by the rich.
starts growing when the perspective of growth are consolidated, firms
urgently need new personnel, possibly in connection with new investments.
At peaks, in many activity branches, a shortage of personnel may be felt and employment increases less than it could otherwise.