Monday, March 26, 2018

Countries with lowest unemployment rates

Top 12 countries in lowest unemployment rate. 6/12 are from the ASEAN -- CM, TH, LA, BR, VN, SG. 4/12 though have old data, as of end-2016. Some of these 12 countries have zero personal income tax (QA, BR) or low flat tax (Macau 12%, Belarus 13%, Tajikistan 13%). Data from Trading Economics.

Unemployment rate of 2-3% is somehow considered as "full employment" economy. The 2-3% of labor force who are looking for job but have no jobs at the time of labor survey/questionnaire are considered as "voluntary unemployment" normally due to high "reservation wage" and other factors.

For instance, a person is offered a job for P20k a month but he refuse to accept it because he/she is waiting for another job call that would give him/her P25k a month or higher. Or a person is offered a job somewhere at a high rate but refuses to take it because he/she wants to work only nearby even at a lower pay. Say to help take care of a sickly parent/s, sibling or child.

Governments should reduce restrictions and rigidities in the labor market. More laws to "protect labor" actually result in less labor hiring because the employers' flexibility to re-allocate resources, capital-labor-technology-land, flexibility to fire lazy or irresponsible staff, is limited.

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