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Secondly, the other policy to reduce unemployment is fiscal policy. According to The
Free Dictionary, fiscal policy describes taxation and spending that the government pursues
in an effort to influence the overall state of the economy. Two common goals of fiscal policy
are to reduce unemployment and encourage economic growth. Taxation is one of the
primary fiscal policy tools the government has at its disposal to reduce unemployment. High
taxes mean consumers have less disposable income, which results in less consumption.
When consumers buy less, business take in less revenue and are less likely to hire new
workers or may even lay off workers to reduce costs. Cutting taxes is a common method the
government uses to spark economic growth and reduce unemployment. Tax cuts put more
money into the hands of consumers, which can lead to increased revenue for business and
expansion and hiring.
After that, the government needs to urgently solve the problem of the mismatch of
supply and demand of labour force and skills. The allocation of scholarships as well as the
intake for different courses in universities and vocational schools should reflect the
estimation of what the economy needs in the medium term of two to four years. The
curriculums of the courses at tertiary institutions should be more industry-driven. In addition,
technical and vocational education and training (TVET) should be rebranded as an attractive
pathway for secondary school leavers, just as it is in countries such as Germany. It is better
to be a TVET graduate armed with skills that are in high demand (and thus be paid for that)
by the market, such as an aeronautical mechanic, oil and gas technician or crane operator
etc, than to be a university graduate with no job prospects.
As a mention above there are many solution to overcome the unemployment from
the government, youth graduates etc. Therefore, the parties involved need to initiate each
initiative them in solving this problem because Unemployment is a serious issue for any
economy. It creates negative affects to unemployed as they are jobless and suffer from
worse prospects to find new job and those who are employed feel less secure to keep their
jobs in future.
References
Ministry of Higher Education. (2006). Development of soft skills for Institutions of Higher
Learning. Serdang: Universiti Putra Malaysia. Malaysia’s August jobless rate rises to 3.1 %.
(2013, October 23). The Star Online, Retrieved April 08, 2019 from
http://www.thestar.com.my/Business/BusinessNews/2013/10/23/MalaysiaAugust-jobless-
rate-riseto31.aspx.
FMT News. (2018). Government can help youths to get jobs, achieve potential.