What Are The Measures To Control Unemployment?


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There are many measures put in place by the government to try and curb unemployment and help raise the economy of the country. Reduction of the Federal Funds Rate is one of the first points of action when unemployment levels are looking to be too high and inflation is looking difficult to control. This scheme lowers the main interest rates and allows businesses to get more confidence to take out loans, meaning that they will have more money and therefore, be more likely to hire more staff to expand their businesses. This method also provides other benefits:

• Boosts the housing market as people are more prepared to sell their houses and buy bigger ones when the market is good. This means that even first time buyers have more chance in purchasing a house, allowing the economy to grow.
• Wealth in general is created through use of this method, with more money to spend meaning that people have more money confidence whilst businesses will benefit from the improved profits.

If things do not significantly improve after this method has been implemented, the next idea is to introduce fiscal policy. This is going back to the methods of Roosevelt with his New Deal, putting more money into government projects which means that the people have more job opportunities whilst also contributing towards the general better society with the government's plans.

The method is beneficial to all, even those that aren't directly being helped by the scheme, as if it looks like the government is confident enough about the financial climate, people are more likely to spend money as they see the state of the government as related to how good finances are.

Despite all this, however, unemployment rates are still low and to an extent, the government prefers it when there is a certain amount of unemployment as it helps control inflation. However, if the level of unemployment exceeds 4%, there is usually a change as it looks bad for the country and messes with the inflation rates.

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