Unemployment
The International Labor Organization (ILO) defines unemployment
as a state in which people are actively looking for work but are
unable to do so. It is an issue for developed and developing nations
alike.
The percentage of unemployed persons in a nation is measured by a
statistic called the unemployment rate. It is defined as the number of
people who are actively seeking employment, do not already hold
employment, but would be willing to begin employment right away
if one
were to become available.
The unemployment rate is the most important indicator of an
economy's health. The number of people who are jobless and
actively looking for work but are having difficulty finding it is
counted. It is defined as the total number of people aged 16 to 64
who were employed divided by the total number of people who were
unemployed at some point during
the reference period (typically a month).
Voluntary Unemployment is defined as the situation in which
people are unemployed because of their choice or they are not
working due to laziness or they are not interested to do work. It is
caused by a lack of demand for labor. This type of unemployment
can be solved by increasing the demand for labor, which will
increase wages and reduce the
number of unemployed people.
Involuntary Unemployment is when an individual
does not have enough skills or experience to find work in his or her field, but
cannot find a job in their current field because there are no jobs available in
that field. In this case, individuals may need to acquire new skills before
they can find work again.
Types of unemployment
Types of unemployment include the following.
Structural Unemployment
The result of an economic downturn or other structural changes in the economy such as technological change. This type can last for several years after a recovery begins. Structural factors can include Changes in technology (e.g., automation) or natural disasters (e.g., earthquakes). It is the outcome of an economy's underdevelopment and backwardness.
Open Unemployment
Open unemployment is the difference between total employment and
the number of people who are unemployed. Open unemployment is
a measure of how many people in an economy are actively seeking
work, but not currently employed. The workers are completely idle.
When there are more people looking for work than jobs available,
it’s called “full employment.”
Underemployment
It is a situation in which employed persons are working but less than
they are really capable of it. Due to the unavailability of suitable
work as per their ability and expertise, they join the inferior
occupation.
Disguised Unemployment
Unemployment that is covered up when more people are working than are actually needed to do so is known as disguised unemployment. It is a situation in which a person seems
as employed but in fact, he is not employed. This situation is raised when a
more number of workers are engaged in a job than actually needed. This can be
seen in construction sites, the agriculture sector, etc. All family members
engage more unnecessarily than needed.
Cyclical Unemployment
It occurs due to the trade cycle. The Trade cycle refers to the regular
upward and downward movement of business or overall economic
activities.
During the period of the great depression in the 1930s, a large number of the labor force was unemployed in the developed countries, especially in the USA. It is brought on by laziness in the economic environment. Investment activities get discouraged during a depression. Large numbers of workers are unemployed as a result of the economic activity decline.
Seasonal Unemployment
The situation in which people are out of work and looking for a job
during the off-season. For example workers from Africa come to
European countries as seasonal workers during the harvesting and
planting season. In other seasons they go back to their home countries.
This is beneficial for the producers because they do not have to
spend extra money on incentives and other burdens. But this creates
insecurity for workers. You have to choose the better-off solution for
both economic agents.
Frictional Unemployment
It is a situation in which people are
looking for a new and better job and employers are looking for the right workers.
It is a situation in which people search for a job by leaving one job.
Educated Unemployment
It refers to unemployment in which
highly educated people do not want to do inferior jobs.
Technological Unemployment
Technological unemployment is typically seen in developed nations.
The advent of new technology is the primary culprit.
Causes of Unemployment
The causes of unemployment are complex. The main cause is the
lack of demand in the economy, which can be due to a number of
reasons such as Unemployment occurring when there are fewer
people seeking work than jobs available. Unemployment may also
occur if there are more workers
looking for jobs than there are vacancies.
Both developed and developing countries are facing unemployment
problems although their percentage is different.
But key points may be because of:
·
High population growth rate
·
Slow economic growth and
industrial development
·
Unequal distribution of land
·
Lack of infrastructure in developing
countries
·
Lack of saving and investment
· Capital-intensive technique(Use of more machines and robots during production)
Measure to create employment
Unemployment is a serious problem in developing and developed
nations. If a large number of people are unemployed then there may
be social problems such as gang fighting, political instability, and
other discrimination and conflict between rich and poor. Then there
will be conflict in society as said by Karl Marks. Then the objective
of economics to make a prosperous and happy society remains
incomplete. For this, the following measures can be done.
- Increase in fracture and industrial development for employment opportunities.
- Promote the agriculture sector because at least there will not be a scarcity of food.
- Credit facility for farmers and small-scale industries (Government should provide loans at a cheaper rate.)
- Educational system should be reformed into a vocational one from the school and university levels.
- The use of the labor-intensive technique is preferred if there is a high rate of unemployment.
- Political instability may be the reason for unemployment so during choosing politicians you have to vote for a capable leader.
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