Poverty, Inflation and Unemployment: Role of Policy Makers in Eradicate the Problem

Topics: Inflation, Unemployment, Monetary policy Pages: 14 (5124 words) Published: May 9, 2013
Unemployment, inflation and poverty have become issues worldwide, including Malaysia. Unemployment can be defined as those of working age who is without work, but who are available for work at current wage rate. In other word, unemployment involved people who are seeking for a job, but unable to find one. Historically, from 1998 until 2013, Malaysia Unemployment Rate average 3.33 Percent reaching an all time high of 4.5 Percent in March of 1999 and a record low of 2.70 Percent in August of 2012. In Malaysia, the unemployment rate is measured by the number of people actively looking for a job as a percentage of the labour force (Trading Economies, 2013).

Whereas, inflation is a general increase in prices and fall in the purchasing value of money. Meaning that, inflation is a lot of money chasing after few goods. In Malaysia, as reported by Department of Statistics Malaysia, the annual inflation rate increased to 1.6 percent in March 2013, from 1.5 percent recorded in February, as a result of higher prices for food, health, education and hotels (Trading Economies, 2013). This increasing in inflation will affect the country as money will start to lose its value.

In other hand, poverty refers to the condition of not having the means to afford basis human needs such as clean water, nutrition, health care, clothing and shelter. Malaysia has adopted three concepts of poverty which is absolute poverty, absolute hardcore poverty and relative poverty. Malaysia has successfully eliminated extreme poverty and hunger. However, standard of living in peninsular Malaysia is differing from east Malaysia due to the poverty.

All these three problem need to overcome immediately in order to provide a country with economic stability to its citizen. Thus, policy makers have to plays a crucial role to eradicate all these issues or problem.

Unemployment as stated earlier is those at working age who is without work, but who are available for work at current wage rate. The unemployment rate can be defined as the number of people actively looking for a job divided by the labour force. Changes in unemployment depend mostly on inflows made up of non-employed people starting to look for jobs, of employed people who lose their jobs and look for new ones. Formula of unemployment rate is; Unemployment Rate= total employed/ total labor force x 100%.

Unemployment rate in Malaysia remained unchanged at 3.30 percent in January of 2013 from 3.30 percent in December of 2012 as reported by the Department of Statistics Malaysia.
To reduce the rate of unemployment in Malaysia, policy makers have to plays an important role in ensuring this problem can be solved. Firstly is launching a program to train or re- trained unemployed especially fresh graduates. This program is really important to be launched because it will help the fresh graduate to acquire a job. We can see a phenomenon today as many fresh graduates are not able to find a job. Based on the 2011 Graduate Tracking Study of the Higher Education Ministry, about 40,000 graduates are still unemployed (The Star Online, 2012). This shows that the graduates failed to secure permanent jobs six months after graduation but usually were gainfully employed within two years. Thus, our government or policy makers must introduce any programs that will lead a way out from this problem. For instances, Graduate Training Scheme and Majlis Latihan Vokasional Kebangsaan help Malaysian to further their studies while getting paid by the government. Meaning that, this program will reduced the number of unemployed in Malaysia. In addition, program is launched just to avoid the unemployment among fresh graduates. For example, chief minister of the states of Pahang, Datuk Seri Adnan Yaakob has launched Kerjaya Program in order to create a group of skilled and trained workers, thus reducing the unemployment rate among fresh graduates. 200 graduates had been selected for the Graduate...
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