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

You may be aware that redundancy figures have boomed over a very short period of time and there is evidence to support the view that this boom is going to continue. Today I am going to discuss why this has happened and why experts speculate that it will continue for some time.
The leading factors affecting unemployment can be put into two classifications: They are ‘supply-side’ factors and ‘demand-side’ factors.
Supply-side factors dictate when a business is not able to fulfil demand for a product for the same price as their competitors. There is still a demand for the company’s service and products, but it is available cheaper elsewhere. Minimum wage laws stop the employer from lowering employee salaries and so the company can be forced to downsize.
Demand-side factors relate to drops in demand for a product or service provided by a business. This affects the company’s income and hence, they must reduce outgoings. This is often achieved by downsizing.
An example of ‘supply-side’ is 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 people are disgusted by this, but if you owned a call centre and could reduce overheads by up to 50% would you not consider it? Improvements in the Internet and telecommunications has made this achievable, but it does have a negative impact on our own economy.
An example of ‘demand-side’ is the new car market. Because of the perception that our economy is struggling, many individuals are now reluctant to purchase new cars, opting for cheaper second hand cars, or putting off upgrading their transport altogether. If you have looked into purchasing a brand new car recently you will have seen that there are exceptional offers available, as the manufacturers and dealerships are struggling to generate business.
Although this is the case there is very little we can do about the situation. However, by becoming aware of it, we can look at alternative ways of generating additional income, taking advantage of economic changes.
If you have ever considered starting your own business then you would benefit greatly from understanding 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 world market and with the emerging information age it is sensible to make use of the Internet whenever possible!
I hope this article gives you beneficial insight, if you consider starting a part-time business in the future.

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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