Padilla, Kimberly Rose G.

October 6, 2011

BSHTM HRRM 2 2:30-3:30 TTHS

Effects of Global Crisis

Unemployment

 In many advanced economies, unemployment remains at very high levels, with little sign of an
early fall, while in emerging and developing countries the economic shock hit jobs in export
sectors hard, but these are now recovering, in part as exporters have diversified their markets to
rely less on those of the advanced economies. The 2007–09 slowdowns also hit the large
informal economies of the developing world. Informal employment has increased, and the
numbers of working women and men who cannot earn enough to keep themselves and their
families out of poverty have risen. increases the number of the family who covers under the
poverty line. The unemployment rate is an important indicator with both social and economic
dimensions. From an economic perspective, unemployment indicates unused available labour.
Rising unemployment may also result in loss of income for individuals and increased pressure on
government spending on social benefits.
- If global crisis happens, these are the factors that could lead to unemployment:

 Recessions
 Inflation
 Disability
 Undulating business cycles
 Changes in tastes as well as alterations in the climatic conditions. This may in turn lead to decline
in demand for certain services as well as products.
 Attitude towards employers
 Willingness to work
 Perception of employees
 Employee values
 Discriminating factors in the place of work (may include discrimination on the basis of age, class,
ethnicity, color and race).
 Ability to look for employment

Source:
http://epp.eurostat.ec.europa.eu/statistics_explained/index.php/Impact_of_the_economic_crisis_on_une
mployment

Inflation

- Money loses value, more money is needed, therefore, if the currency falls by 25 percent, then
prices can rise by 25 percent. Global inflation is a prime cause of the financial crisis. Only a few
months ago, American policy makers were worried about the reverse problem — rising prices, or
inflation — as then-soaring costs for oil and food filtered through the economy. In July, average
prices were 5.6 percent higher than a year earlier — the fastest pace of inflation since 1991. But
by the end of September, annual inflation had dipped to 4.9 percent and was widely expected to
go lower.
 - The new worry is that in the worst case, the end of inflation may be the beginning of something
malevolent: a long, slow retrenchment in which consumers and businesses worldwide lose the
wherewithal to buy, sending prices down for many goods. Though still considered unlikely, that
would prompt businesses to slow production and accelerate layoffs, taking more paychecks out
of the economy and further weakening demand.
- The danger of this is the difficulty of a cure. Policy makers can generally choke off inflation by
raising interest rates, dampening economic activity and reducing demand for goods. But as Japan
discovered, an economy may remain ensnared by deflation for many years, even when interest
rates are dropped to zero: falling prices make companies reluctant to invest even when credit is
free.

Source: http://www.nytimes.com/2008/11/01/business/economy/01deflation.html?pagewanted=all

Deflation

- Deflation accompanied the Depression of the 1930s. Persistently falling prices also were at the
heart of Japan’s so-called lost decade after the catastrophic collapse of its real estate bubble at
the end of the 1980s — a period in which some experts now find parallels to the American
predicament.
- With economies around the globe weakening, demand for oil, copper, grains and other
commodities has diminished, bringing down prices of these raw materials. But prices have yet to
decline noticeably for most goods and services, with one conspicuous exception — houses. Still,
reduced demand is beginning to soften prices for a few products, like furniture and bedding,
which are down slightly since the beginning of 2007, according to government data. Prices are
also falling for some appliances, tools and hardware.

Source: http://www.nytimes.com/2008/11/01/business/economy/01deflation.html?pagewanted=all

Productivity Of Human

- The global economic crisis will put survival before productivity concerns. One key to emerging
from the economic recession successfully, however, will be how well management can create a
context for energizing labor behind a productivity agenda that prioritizes general welfare, a viable
healthcare system, and transparent decision-making processes. Productivity campaigns lacking
these goals will fail to rally a skeptical workforce. Business and labor initiatives that fail to include
the broader social context of productivity will likely fall short of expectations. Social and
environmental aspects: recommendations for adjusting social policies to address the crisis as well
as adjust to a post-crisis environment including reforming national insurance programs (health,
pension, employment), education and the effectiveness of current policies such as Conditional
Cash Transfers and developing new markets for green products and renewable energy; making a
low carbon society an integral part of economic recovery and growth.

Source: http://www.economywatch.org/research.productivity.concerns/