A Simple Case Of Supply And Demand - The Leading Cause Of Unemployment

I am sure you are aware that unemployment figures have skyrocketed over a minimal period of time and there is evidence to suggest that this boom is likely to continue. Today I want to tell you why this is true and why economists predict that it may continue to happen.

The leading 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 a business is not able to fulfil demand for a product for the same cost as their competitors. There is still a market for the companys product or service, but it is available cheaper elsewhere. Minimum wage requirements stop the company from lowering employee salaries and so the company may be forced to lose staff.

Demand-side factors relate to reductions in demand for a product or service provided by a company. This affects the companys profits and hence, they have to are required to reduce outgoings. This is often achieved by losing staff.

An example of supply-side is the outsourcing of call centres. Some companies now choose to outsource call centre services to countries like India, due to the vast difference in cost for the same service. Many individuals are offended by this, but if you owned a call centre and could cut costs by as much as 50% would you not consider it? Improvements in technology and telecommunications have made this possible, but it does have a detrimental impact on our own economy.

An example of demand-side is the car sales market. Because of the belief that our economy is in crisis, many individuals are now reluctant to purchase brand new cars, opting for cheaper second hand cars, or putting off upgrading their motor vehicle altogether. If you have considered buying a newly produced car recently you will have seen that there are exceptional deals available, as the manufacturers and dealerships are struggling to generate custom.

Although this is the situation there is little or nothing we can do about it. However, by being concious of it, we can explore alternative ways of generating additional income, taking advantage of the trends.

If you have ever considered building your own business then you would benefit greatly from understanding the impact that technology and the Internet is having on economic trends 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 advancing information age it is necessary to harness the Internet as often as possible!

I hope this article provides you beneficial insight, if and when you consider starting a part-time business at a later date.