Name: DWI FUJI CAHYANTI

NIM: 17053087

SUBJECT: HUMAN RESOURCES

UNEMPLOYMENT

Unemployment is a problem that cannot be avoided for every country. For developing
countries, unemployment is a very serious problem because it will affect the country's
economic and social conditions. As for developed countries, unemployment is only a matter
of economic cycles. The large number of population in Indonesia and the limited number of
jobs makes the problem of unemployment in Indonesia a problem that is difficult for
governments to overcome.

Unemployment is someone who is 16 years old and above, who can work, is looking
for work within a period of 4 weeks but has not yet gotten a job (Mankiw, 2013). The main
factor causing unemployment is a lack of aggregate expenditure. Entrepreneurs will increase
the production of goods when the demand for goods and services increases. An increase in
production will cause an increase in the amount of labor employed. Thus it will be related to
the level of national income where the higher the national income, the more use of labor in
the economy (Sukirno, 2015)

Other factors causing unemployment are unemployment occurs because job seekers
want to find other better jobs, employers use more modern equipment, and the mismatch
between work skills possessed by job skills required by industries. The bad consequences that
will result from unemployment are the emergence of economic and social problems. In terms
of individuals, the absence of income causes unemployment to reduce consumption
expenditure. Prolonged unemployment will cause adverse psychological effects for the
unemployed and for their families (Sukirno, 2015).

Unemployment is a very complex problem. According to (Sukirno, 2015), this

happened because of a relationship with several economic indicators. Indicators that can
affect the unemployment rate are inflation, economic growth, and minimum wages. A high
inflation rate will affect the unemployment rate. According to him the unemployment rate can
increase economic growth, and if economic growth increases will also affect the minimum
wage.

According to Sukirno (2002) Based on factors that cause unemployment is divided

into conjuncture unemployment, structural unemployment, and frictional unemployment.
Conjuncture unemployment is unemployment caused by changes in the level of economic
activity. Structural unemployment is unemployment caused by changes in structure and
economic activity as a result of economic development. While frictional unemployment is
unemployment caused by a system that cannot bring together the opening of the workforce
with job seekers.

In addition, unemployment in developing countries can be divided into open

unemployment, hidden unemployment, seasonal unemployment and underemployment. Open
unemployment is unemployment caused by an increase in the number of vacancies that are
lower than the increase in labor. Hidden unemployment is unemployment caused by excess
labor used. Seasonal unemployment is unemployment caused by the change of seasons.
Whereas underemployment is unemployment resulting from workers not working full time or
working hours less than normal working hours.

Unemployment can be caused by the number of workers and the number of

unbalanced jobs, technological advances, skills and experience of applicants not in
accordance with the criteria, lack of education, poverty, termination of employment by
companies, the presence of tight global competition, difficulties in finding vacancies
employment, and expectations for prospective workers are too high.

We can see the negative effects caused by unemployment from two aspects, namely
aspects of economic activity and aspects of individuals and society. In terms of aspects of
economic activity, the bad effects of unemployment are: unemployment causes people not to
maximize the level of prosperity that they might achieve; unemployment causes reduced tax
revenue, and unemployment does not promote economic growth. While from the aspect of
individuals and society, the bad effects of unemployment are, unemployment causes loss of
livelihoods and income; unemployment can cause loss of skills; and unemployment can lead
to social and political instability.

Labor demand is an entrepreneur's decision related to the interests of the company

that is related to the optimal level of employment opportunities desired by the company. To
meet this optimal employment opportunity the company will respond to changes in wages,
capital costs and other inputs, the level of company sales and technological developments.

Labor demand is related to consumer demand for goods and services. Where
consumers buy goods and services provide utility to consumers. Meanwhile the employer
employs someone to produce the goods or services. So that employers' demand for labor
depends on the demand of producers for the goods they produce. Requests like this are
known as child requests.

The company will use additional labor if MPPi is greater than the cost of additional
labor. Additional labor costs are determined by the real wage calculated as (nominal wage /
price level), this real wage measures the amount of real output the company must pay for
each worker, because by hiring one more worker it produces an increase in output for the
MPPL and costs to the company, For real wages, companies will hire additional workers as
long as MPPL exceeds real wages.

Assuming that labor can be added and other factors of production fixed, the ratio of
production equipment for each worker becomes smaller and additional marginal yields
become smaller as well, or as more labor is used the MPPi decreases, due to the MPPi value.
following the law of increasing yields which is diminishing.

If the price or level of labor wages rises, the quantity of labor demanded will
decrease, this is shown by an increase in wage flows that intersects the VMP curve in a
smaller quantity of labor. With the reduction in workers, the marginal physical product of
capital input, or MPPR, will decrease because now each unit of capital is worked by fewer
workers. If a machine is operated by one person, the marginal physical product of the
machine will decrease compared to the previous time when the machine was cleaned by
several people. Because now there is only one worker, they cannot take turns running the
machine, so the results are fewer. In another sentence, capital is complementary to energy.
work, or there is complementarity between the two.

Labor supply is the amount of labor that can be provided by the owner of labor at
each possible wage within a certain period. In classical theory human resources (workers) are
individuals who are free to take the decision to work or not. Even workers are free to set the
number of hours they want to work. This theory is based on theories about consumers, where
each individual aims to maximize satisfaction with the obstacles they face.
 Labor supply is influenced by a decision made by someone whether he wants to work
or not. The decision also depends on a person's behavior to use his time, whether the time is
used for work or used to do other activities that are relaxed (having fun), or is a combination
of both.

The effect of wage rates on working hours is divided into two effects, namely the
income effect and the substitution effect. An increase in the wage level that causes an
increase in income is called the income effect. Whereas the increase in working time as a
result of rising wage rates is called the substitution effect, assuming income and other factors
are constant, the magnitude of this substitution effect is positive.

Increasing the number of population each year will potentially increase the number of
the workforce, this can lead to problems of imbalance between labor supply and labor
demand. If the supply of labor is greater than the demand for labor then there is a workforce
that is not absorbed and this will cause problems in the form of unemployment. The state of
imbalance between labor supply and this can be illustrated by using the labor demand and
supply curve.

The labor market balance is a condition that illustrates the suitability between labor
demand and supply. The condition of equilibrium in the labor market characterizes the
absence of factors of production of unemployed labor or what is often referred to as a
condition of full employment. But unemployment is always a manifestation in the economy,
which illustrates the failure of the labor market to reach balance

The failure of the labor market towards the equilibrium is determined by many
factors. Among them because the production sectors have a low absorption (demand) of
labor, while labor supply continues to increase because of the increase in the labor force and
migration resulting in unemployment.

Bibliography
Mahyuddin, & Zain, M. M. (2010). Elastisitas Permintaan Tenaga Kerja dan Kekakuan Upah
Rill Sektoral di Sulawesi Selatan. Jurnal Agro Ekonomi, 113-132.

Mankiw, G. N. (2013). Pengantar Ekonomi Makro. Jakarta: Salemba Empat.

Sholeh, M. (2007). Permintaan dan Penawaran Tenaga Kerja serta Upah: Teori Serta
Beberapa Potretnya di Indonesia. Jurnal Ekonomi & Pendidikan, 62-75.

Sukirno, S. (2015). Teori Pengantar Makroekonomi. Jakarta: PT. Raja Grafindo Persada.