Time Lag is Over-Welcome Unemployment

Global Crisis has run for several months. Time lag is over and now we get the direct impact in our daily life, in supply and demand side (industry and household). Government also (as demand in other hand and as supply in other hand too). Everyone can analyst the impact, not only economists or analysts.

How to start our analyst? Which sectors who gain the global crisis impact; Supply side (read industry) or demand side (read household)? As well as J.B. Say statement ‘Supply Creates its own demand’, I do like him. Supply side gains the bad impact first! Macroeconomic has its explanation, microeconomic also has and monetary sector also has itself explanation to describe this phenomena. Global Crisis has come and attack the fundamental economic, Banking and financial institutions in America and then European (Euro Zone) and finally to all countries without exception. Banking plays very important rules in economic and we know that. As creditor, Industries get fresh money from them.

Time lag is over and it is time to see the impact. Many industries start to house (housing) their employers. America as the source of this Global Financial Crisis Virus gets worse impact; put new record on unemployment rate in last 14 years. 600.000 employers have been housed in last three months and total unemployment approximately 1, 2 million people in this year. Industries with higher labors (industry with labor based) try to cut their labor because significantly decline on demand side. Because America is main target Export from developing countries, most countries (foreign industries) also gain bad impact because demand in America showing fantastic declining. After America, Demand in Euro Zone is also low. Once demand is low, business (with export based) do nothing because no buyer. To housing some of their labor is right decision. Both labor and businessmen also gain, labor is potentially housed and businessmen are potentially collapsed.

In America, Manufactures industries, property, metal and financial services resulted biggest portion of unemployment, 8.5 percent unemployment rate in next year, American Research and Statistic Bureau staff Goldman Sachs said.

Unemployment will reduce their portion to buy (lower of purchasing power parity) and this condition will push down imported products. In Indonesia, Textile Industries, Electronic Industries (produce goods in process-spare part or electronic component products) or motorcycle industries gain very bad impact. Industries with economic scale will gain worse than industry based technology.
Exported industries orientation will loss demand and the bad news is decline on demand is held in the same time with New Wage Costing in 2009.
Indonesia Labor Union and Businessmen result good deal, job continuity for labor is very important for them to stay survival. Government rules as caretaker is still needed. Union Labor fight forces to avoid massive unemployment if the crisis goes to bad. International creditor institutions must reduce any complexity conditions. Labor Union must know about their company, to let them know if something policy has taken such as housing some labor, changing longer work hour and others.
We don’t have to panic. New investment isn’t good solution for this time. All we do is to keep and to prevent negative impact deeper and deeper.

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