Modern macroeconomics emerged in the climate of a decade (1929-1939) of high unemployment and stagnant production throughout the world economy known as the Great Depression. These were years of human misery on a scale that is hard to imagine today (Parkin, 2010).
This essay will be centered on South Africa’s current situation and that of the USA during the Great Depression, but more emphasis will be placed on South Africa’s current situation. Initially, a comparison between the two countries will be done. This will be followed by a proposal of two policies, namely the Relocation Grants Scheme and the Education and Training Scheme, aimed at addressing South Africa’s unemployment problem and poverty.
A number of key issues that South Africa …show more content…
The New Deal is a collection of policies. Amongst the policies was the Federal Deposit Insurance Corporation (F.D.I.C.) which was created to maintain public confidence in banks and encourage saving. The Civilian Conservation Corporation (C.C.C.) was formed to create jobs for young men to conserve and develop natural resources. Furthermore, the Civil Works Administration (C.W.A) was launched and created more than 4 million (temporary) jobs. The basic idea behind the new deal was to stimulate the economy by creating jobs. This was critical because it put money in the hands of the consumer. Having more money meant that the consumer can spend more and this would trigger the multiplier effect. The demand for goods would rise and the demand for workers would also …show more content…
Since the problem in South Africa is that people spend too much and save less, this implies that increasing expenditure would not provide the solution, rather supply should be increased.
Unemployment in South Africa proves to be a critical obstacle to poverty reduction. This implies that by dealing with the issue of unemployment one is simultaneously addressing the issue of poverty. Two policies aimed at addressing unemployment and poverty are suggested in this essay. The policies are suggested on the basis that South Africa faces mostly structural unemployment and that unemployment is concentrated among the youth.
The first of the two policies is the Relocation Grants Scheme. The government could provide grants or low-cost housing schemes to encourage workers to move to other regions, where there are jobs available. Relocation grants would encourage people who are unemployed to move to regions where there are jobs available as most people cannot move due to the cost associated with moving. This will result in an increase in the supply of labour which will shift the supply curve rightward. As a result, the quantity of real GDP will
This essay will be centered on South Africa’s current situation and that of the USA during the Great Depression, but more emphasis will be placed on South Africa’s current situation. Initially, a comparison between the two countries will be done. This will be followed by a proposal of two policies, namely the Relocation Grants Scheme and the Education and Training Scheme, aimed at addressing South Africa’s unemployment problem and poverty.
A number of key issues that South Africa …show more content…
The New Deal is a collection of policies. Amongst the policies was the Federal Deposit Insurance Corporation (F.D.I.C.) which was created to maintain public confidence in banks and encourage saving. The Civilian Conservation Corporation (C.C.C.) was formed to create jobs for young men to conserve and develop natural resources. Furthermore, the Civil Works Administration (C.W.A) was launched and created more than 4 million (temporary) jobs. The basic idea behind the new deal was to stimulate the economy by creating jobs. This was critical because it put money in the hands of the consumer. Having more money meant that the consumer can spend more and this would trigger the multiplier effect. The demand for goods would rise and the demand for workers would also …show more content…
Since the problem in South Africa is that people spend too much and save less, this implies that increasing expenditure would not provide the solution, rather supply should be increased.
Unemployment in South Africa proves to be a critical obstacle to poverty reduction. This implies that by dealing with the issue of unemployment one is simultaneously addressing the issue of poverty. Two policies aimed at addressing unemployment and poverty are suggested in this essay. The policies are suggested on the basis that South Africa faces mostly structural unemployment and that unemployment is concentrated among the youth.
The first of the two policies is the Relocation Grants Scheme. The government could provide grants or low-cost housing schemes to encourage workers to move to other regions, where there are jobs available. Relocation grants would encourage people who are unemployed to move to regions where there are jobs available as most people cannot move due to the cost associated with moving. This will result in an increase in the supply of labour which will shift the supply curve rightward. As a result, the quantity of real GDP will