Based on the article, it is stating about one of the topics in macroeconomics that I learn in

Basic Economic subject. Unemployment is one of the macroeconomic problems. The article
stated that the lower the unemployment rate, the lower the number of unemployed person in
Malaysia and also it stated that the International Labour Organisation defined an unemployment
rate of below 4% as full employment or zero employment. So, the writer of the articles means
that Malaysia has zero unemployment in 2014 because Malaysia only recorded 2.7% of
unemployment rate as of the third quarter of 2014. So, it means that Malaysia has increase their
full employment due to the unemployment rate in 2013 and 2012 which is 3% and 3.1%. I dont
think Malaysia has zero unemployment rates. Zero unemployment rate or full employment is the
situation where all available resources in the economy are employed to produce goods and
services. However, it is difficult to define full employment because full employment doesnt
mean 100% of the working labour force. There are always some people who are voluntarily
unemployed, due to work dissatisfaction or resigning to look for another job. So, it is impossible
for our country to have zero employment and I didnt agree with the statement that Malaysia has
zero unemployment.
The first thing that we have to understand about unemployment is we have to understand
the meaning of labour force. Labour force is defined as people in the age group of 15 to 64 years
who are working or actively seeking work. Not everyone who is 15 years old and above are
included in labour force because those who are 15 years old and above who are students,
housewives, pensioners and discourage workers are excluded in the labour force. So, we can
state that labour force consist of employed and unemployed person.
Unemployment can be define as labour force participants being available and willing to
work, but are unable to find job. Discourage worker is an individual who wants to work but has
been unsuccessful for a long period of time in finding a job and who has consequently given up
on job seeking. Therefore the unemployment rate is the percentage of the labour force that is
unemployed and is actively seeking employment. While, the labour force participation rate is
defined as the fraction of the labour to the total working age group population, in percentage. So,
the 2.7% rate of unemployment is calculated by using the formula 1 below.
Formula 1
Number of Unemployed
Unemployment rate (%) =
100%

f
X

formula2
Labour Force
Labour Force Participation Rate =
Working age population (1564)

Based on the article, I also realized that women participation had increase 3.6% from
2010 to 2013, which is from 46.8% to 50.4%. So, it means that most of the women in Malaysia
have their own career. So, we can conclude that government had used some measure to control
unemployment in Malaysia thats why there is a decrease in the unemployment rate, for example
based on the article the ministry has ensured that there will be cooperation between agencies to
conduct programs to recruit and retain women in the job market.
There are some other measures that the government can takes to control unemployment.
Firstly, the government may practice expansionary policies which increase money supply in the
economy. The tool of monetary policy used to control unemployment is such as open market
operation where the purchasing of securities can increase money supply and also increase the
purchasing power of individuals and firms. Some other tools that can be used as the measures to
control unemployment are lowering the reserve requirement, lowering the discount rate and also
lowering the interest rate.
Secondly, the government may also practice the expansionary fiscal policies through
taxation and public expenditure. The government should reduce taxes, to increase the
consumption expense of the people. A reduction in business and corporate tax will promote an
increase in investment so, employment will rise up. An increase in government expenditure also
will directly affect the aggregate demand. For an example, an increase in the salary of civil
servants creates more development projects which may reduce unemployment.
Besides monetary and fiscal policies, there are some direct control measures that can
control unemployment. Firstly, more training and education should be provided for individuals
who have difficulties securing a job. Secondly, developing new land can create more job
opportunities, especially for people from rural areas. The development of new land is through
government agencies such as FELCRA, RISDA, and FELDA. Last but not least is, more job
opportunities must be created, if there is diversification in an economy. If all sector in economy,
such as transportation, finance, insurance, services, manufacturing and construction expand, it
will create more job and reduce unemployment.
We cant achieve full employment because it is impossible but the government must take
some measure to control unemployment or decrease the number of unemployment. High
unemployment rate will affects the economy which is unemployment incurs the loss of
government revenue obtained through personal taxes. Unemployment also will slow the
economic growth and it will lead to low output as well as it lead to a depression. Last but not
least, the higher of unemployment the higher the GNP gap.