The Impact of Rising Unemployment on Economy

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Okun (a), a famous American economist, was the chairman of the Council of Economic Advisers under President Johnson. In order to convince the President, Congress and the public that if the unemployment rate is reduced from 7% to 4%, the national economy will benefit a lot. According to the change data of the unemployment rate and actual GNP in the United States in 55 quarters (1947- 1960), he passed. The equation is: Y= 1-3X. Where y is the change rate of real GNP (%) and x is the quarterly change rate of unemployment rate (%). The result is the famous Okun's Law.

In recent years, the registered unemployment rate in China has increased slightly. From 1999 to 2000, the unemployment rate remained at 3. 1% or so, and 200 1 rose to 3. 6%, rising to 3 in 2002. 6%, 4% at the end of 2002 and 4% at the end of the first quarter of 2003. 1%, and the annual target is controlled at 4. 5%。 The redefinition of employment and unemployment standards will affect the unemployment rate to some extent. According to People's Daily, the Ministry of Labor and Social Security has redefined the concepts of employment and unemployment. According to the new standard, "unemployed" refers to those who have the ability to work, are unemployed, require employment and cannot find employment, while women are within the legal working age of 16-55. Although engaged in certain social labor, but the labor remuneration is lower than the local minimum living standard for urban residents, it is regarded as unemployment.

On the other hand, China's GDP has been on the rise steadily. 1978 since the reform and opening up, the economy has maintained a high growth rate, with an average annual growth rate of 9. 4%, but there is no corresponding increase in employment. The following table lists China's GDP and unemployment rate (registered urban unemployment rate) since 1978.

Table 1:

Annual GDP (100 million yuan) Urban unemployment rate (%)

19783624. 15.3

19793899.55.4

198045 17.84.9

198 14752.73.8

19825 185.23.2

19835750.42.3

19846624.5 1.9

19858964.4 1.8

1986 10202.22.0

1987 1 1962.52.0