There are some terms that pertains to an economy that are well known. One such term is “employment“. There is a good chance that you, my good reader, are employed via some organization in order to generate an income. Hey, employment is the most popular way to earn money. So if you are earning money, then there is a good chance that you’re employed.
But then again, you may not be. Whether you’re employed or not, you may not have an understanding of what the term “employment” means. If that is the case, just continue to read the contents of this page. Soon you will have a good solid understanding of what the term “employment” means and how employment benefits an economy.
What Does Employment Mean?
Employment is a term used to describe the state where an employee has an ongoing or temporary obligation to perform a set task (or a set of tasks) for the employer and in return the employee gets compensated by the employer with value or a form of value like money. An employee is one who has employment, is subject to an employer, and has a specific task or tasks to fulfill; task(s) designated by an employer. An employer is one who provides employment for an employee and has authority over the employee.
Oh, there is an exception you need to be aware of. The exception is for one to be self-employed. In a self-employment situation, one is both the employee and the employer. A self-employed individual has a set task or a set of tasks to perform and is under the authority of oneself. The individual provides the tasks for oneself and is in charge over oneself.
Being employed is the state of being under employment. The term ‘job’ and ‘career’ are synonymous with the term ‘employment’. When you hear someone say something like, “I need a job/career.”, that person is also saying, “I need employment.”.
Now that you have a good understanding of what employment is, it’s time to explain why employment opportunities are so important to an economy. For an economy to prosper and grow, an economy needs as many people as possible to be employed. Why? Because when people are employed, they make money. When people have money, they spend money on goods and services and as a result become consumers. When consumers spend money on goods and services, producers make profits and thus have the necessary capital to expand. Why would a producer expand? Because producers have a major incentive to expand. That major incentive is bigger profits. When a producer expands, that producer has the opportunity to earn more money…and who does what to earn more money?
When a producer is ready to expand, that producer would have provide additional employment opportunities to more individuals. When more individuals become employed, those new employees will start earning money. With money in their possession, those individuals will start spending. Producers make more profits and expand further. And the circle continues.
You see, when producers expand it means an economy is growing. Every time producers expand, they either increase the rate at which they offer their goods and services to the economy or they offer totally different goods and services. It is even possible for new producers to come about.
Economic growth depends on consumers having money and spending money on goods and services. The most popular way for consumers to get money to spend is to become employed. Once consumers get money through employment, they spend that money and producers eventually expand as a result. That expansion is economic growth.