The Comparison of Unemployment Rate Between Malaysia and Germany with Its Reasons

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2.2 The comparison of Unemployment Rate between Malaysia and Germany with its reasons.

        Refer to the table above ,we can clearly know that the highest unemployment rate for Malaysia in the years 2009 which was caused by dynamics of foreign worker.It’s because people hire the large influx of foreign worker and paid them low wages to reduce expenses or overhead and earned more profit from it. Beside that, the domestic demand is decline 7.43% compare with previous year which is 3.1% in years 2008 due to a downturn in government spending in investment,consumption and trade.The lowest unemployment rate in years 2014 is 2.9 and dynamics of graduates as a worrying trend is a factor that fluctuates unemployment rate in Malaysia.Government is to encourage fresh graduates to seek work,because they are full of energy and more innovative.They are also a symbol for the future masters of the nation.Furthermore,the main purpose is to allow them to absorb enough experience, they are courage to face the challenges of the future. This is not just to reduce the burden on parents, but also enable them to be independent and can promote economic development of the country.Unemployment rate for Malaysia is constant in the years of 2004 and years 2005 which is 3.55 .The average unemployment rate for Malaysia around 10 years is between -10.2% to 10.53% .

        In Germany,the unemployment rate of 11 in years 2005 is the most highest rate which is because of the combination of high social contributions and still too low taxes is not the only cause for stagnation and high unemployment . Another cause of unemployment could be powerful trades unions, causing wages to be pushed above the equilibrium and therefore causing real wage unemployment .Also,unemployment benefits are more generous in Germany, increasing the incentive to stay on benefits and decreased incentive to work.This will cause people do not have to work but still get the incentive. From years 2005 - 2014,the working-age population in Germany (15-64 years old) decline. Moreover,the lowest unemployment rate is 4.983 in years 2014 .It is keep on falling in Germany from years 2007 and there is 5 possible explanation of this good performance such as working-age population is decreasing, growth is higher,especially thanks to better export competitiveness,short-time working increased considerably during the crisis, the wages haven risen much less than productivity and because the labour market has changed profoundly as a result of the Hartz reforms.The effective unemployment rate only started to fall when external demand took over from the stagnating domestic demand.On the other hand,the active population continues to grow.The continued rise in the labour force participation rate cannot be accounted for by the composition of the active population. .The average unemployment rate for Germany around 10 years is between -15.51% to 6.46% .