Effects of Rising Economic Role of China on High Levels of Essay

Effects of Rising Economic Role of China on High Levels of Unemployment in the EU and USA - Essay Example ble effects of China’s economic strength on unemployment rates in the European Union states and the United States can also be explored by understanding the primary causes of unemployment in the two regions because a review of factors into high unemployment rates in the region identifies vulnerability to a foreign economic force. The European Union states regulate their labour market and this influences unemployment rates among the Union’s states. Carbaugh explains that the level of inflexibility in a country’s labour industry is directly proportional to the country’s unemployment rates as employers manage regulatory constraints to ensure their fair share of profit. Laws for protection of employees’ rights and minimum wage laws are legal factors in the region that force employers to resort to alternative cost cutting strategies such as reducing number of employees. Strong labour unions also force pay and initiates similar counter measures into high u nemployment rates as employers struggle to balance their expenses. The relatively cheaper exports from China will however offer a more profitable venture and paralyse the regions’ production industries to increase unemployment rates (Carbaugh 2010, p. 257- 259). The types of unemployment that are significant among the European Union countries further identify microeconomic factors into the region’s high unemployment rates. â€Å"Frictional, structural, and seasonal unemployment† mean that economies are not flexible enough to align their human resource potentials with their dynamic labour markets. Payments for unemployment benefits in the region also accounts for significant rate of unemployment because people do not feel a mandatory need for work and may not make necessary efforts to gain necessary skills for... This essay aims to provide an economic outlook for the level of unemployment in the European Union and the United States, in connection with rising levels of their imports of goods and services from China. Effects of globalization have been significant in different regions of the world, both negative and positive. China has for example emerged to be an economic giant while western countries have continued to suffer from high unemployment rates. The trend in China’s economic growth is one of the indicators of the effects of its economy on unemployment rates in the European Union and the United States. China has continually expanded its economy and its exports, a factor that has undermined manufacturing activities in other countries Possible effects of China’s economic strength on unemployment rates in the European Union states and the United States can be explored by understanding the primary causes of unemployment in two regions. The level of inflexibility in European Union labour industry is directly proportional to the unemployment rates as employers manage regulatory constraints to ensure their fair share of profit. The US is poor in natural resources and heavily relies on imports for its production processes that utilizes natural resources and may also for the nation to import finished products from nations like China. It can only rely on technology and education to enhance its business activities and reduce its unemployment rates but is under significant threat to suffer from unemployment effects of globalization.