How Political Decisions Change the Job Market

Whether it’s a society or an individual, families or an organization, large or small businesses, political trends can have its impact at any level. Government agencies and leaders can set certain trends in policies that can affect the legal framework within which businesses operate. It is therefore an essential part to know the political trends at local or national level for planning and strategy development for business development.

Enactment of policies by different political parties shape national and local economies to prosperity founded on their own economic ideologies. Therefore impact on taxes levied on businesses or jobs could be laid due to these political trends.

Alteration in labor laws can be expected by keeping track of political trends. Political candidates are often outspoken about their rationalized mental attitudes regarding minimum wages, insurance requirements, labor-related taxes and regulation on the terms of employment. Any alteration in labor laws can mean a modification in expenses for a business and these expenses can be important for small businesses without large cash reserves. A switch in the minimum wage, for instance, can cut directly into a small company's profitability.

Does politics have an impact on job creation in general or during recessions? Yes, it matters most. Governors and other political bodies are recipients of any jobs benefits from these initiatives, and not originators. There is a business cycle expansion which includes a demand growth, income growth, consumption and investment growth, etc. Politicians and governors during such times do not have much to do except for taking credits for a job growth.

Governments are the primary control points for free markets. Resultantly, the fiscal and monetary policy has a deep bearing on the financial marketplace. Any increase or decrease in government spending impacts unemployment and stabilization of prices. By altering interest rates and the volume of funds available on the open market, governments can modify the flow of investments in and out of the country. Good investments can also mean better scopes of employment for the common people.  

Job growth, however, may not be directly related to the existing political trends. While the cumulative quantity of job progression in a nation is largely driven by macro and global trends, there’s a lot sub-national officials can do to try to boost the number of jobs that are created in their states and cities.

The government can, for sure, make modification in developments, primarily by watching out for and preventing market failures. It helps if fiscal policy is designed such that budget deficits that developed during the recessions shrink in the expansion. And there’s always ample amount of work to be done in ensuring that export markets are open to more businesses and workers are adequately trained. Recessions are always tough times for any country’s work force. Those with jobs are shown the door and those who are freshers in the job market face a dead end!

What matters most to thriving businesses and a successful workforce is the quality of public goods. That could include physical infrastructure and the quality of the workforce. The youth plays a vital role in the formation of a government with expectations of better job opportunities. Thus, it is up to the government to play a vital role in developing the job market. With relevant reforms and policies, the government can surely be the driving force behind a successful workforce and economy.