Essay on Unemployment Rate
Number of words: 1986
The essay is focused on examining the issue of unemployment among people in various societies and countries around the world, the reasons for unemployment, types of unemployment, ways to overcome the issue of unemployment and examine the costs associated with unemployment. Unemployment is a major social issue among people in the economic market today, there are several reasons for unemployment in economics depending on the type of unemployment available, these can be directed to government, employer, supply of labor, among others. The types of unemployment can be directed to frictional unemployment, structural unemployment, cyclical unemployment, and seasonal unemployment. There is a need to solve the unemployment problem in the social economies, this can be done in several ways including enhancing political stability, promoting education, controlling the growth of population, among others. The issue of unemployment in the social economies has several costs ranging from loss of income among individuals, low standard of living among unemployed people, low production, and economic growth, among other costs.
Unemployment and reasons for unemployment
Unemployment is a major problem in various countries around the world, this is a situation whereby people do not have any work that can generate income and are actively searching for a job (Hauser & Burrows, 2018). Individuals in this situation are mostly employable and are actively searching for jobs. This can also include people who are working in jobs that are below their qualifications, experience, and satisfaction. The situation where there is a high level of unemployment will result in several economic distress and problems. The situation of unemployment hinders people to engage in productive work to facilitate development in the country. This will result in a decrease in economic productivity and development (Hauser & Burrows, 2018).
The two categories of unemployment are voluntary and involuntary unemployment, the situation where one moves out from a job to search for another is known as voluntary unemployment, and a situation where a person is laid off and now looking for a job is known as involuntary unemployment. Wolcott et al., (2020) in 2020, the coronavirus pandemic affected Singapore and the world, causing a high level of involuntary unemployment. There are several reasons for unemployment, inadequate job opportunities in a country can cause unemployment in the country. The slow economic development issue can result in unemployment, especially when the population growth is increasing.
The high growth of the population can result in unemployment challenges when the country is not developing and when fewer job opportunities are in the country. Also, people who depend on agriculture production work can become unemployed when the season is not favorable for plant growth. A decrease in industrialization and investment can account for unemployment in several countries that are not developing, the situation where there are few industries and investments are not available will have a severe influence on the employment of people in a developing country. Improper economic planning can also result in unemployment challenges, situations, where there is a gap between supply and demand of labor, which will result in unemployment.
Various types of unemployment
Hauser & Burrows, (2018) Types of unemployment can include frictional, cyclical, structural, institutional, and seasonal unemployment. These types of unemployment are based on voluntary and involuntary unemployment. Frictional unemployment is a situation where a person voluntarily moves from one job to another in a country. The time spent to get another job can be linked to unemployment, it may take some time before the person gets another job. Some people move to another location to search for a new job which can take some time before getting the desired job. When fresh graduate students’ transit to search for a job, the time spent before getting a job is also linked to frictional unemployment. The time can be very short or longer depending on the availability of the job the applicant is seeking (Hwang, 2019).
Hwang, (2019) cyclical unemployment is another type of unemployment where the decrease in production and demand for products results in a decrease in employment of new workers. The situation where a company is not getting enough purchases of goods from the market will decrease income level and ability to pay workers. This can lead to a decrease in salary, and an increase in savings. People will not be able to buy enough goods when their salary is decreased and savings are increased. The situation is cyclical in nature but can be resolved when economic growth and investment are facilitated in the country.
Structural unemployment is when there is a new change in the operation of a business, technology, and production. The situation whereby a company adapts to a new technological system or process will result in laying off workers who do not have the relevant skills for the new changes. There will be a need for retraining of staffs or workers to understand how to use new systems in the company (Wolcott et al., 2020).
Institutional unemployment occurs when there are changes in policies, institutional incentives, and interference of the free market condition in a country. The change in employment policies and strategies can result in laying off some workers in order to regulate the new policies.
Seasonal unemployment is a situation whereby workers that depend on jobs that operate in different seasons are not having jobs due to the unfavorable season or weather conditions to engage in such jobs. An example is farming, among others.
Various ways to overcome unemployment
Education is very important in solving the problem of unemployment, educating people will help increase their skills and ability to be employed and start their own businesses. Education will enable workers to advance their skills and employability level. The education system has to be improved in order to enhance the admission of students into higher studies in colleges and universities. The availability and improvement of vocational institutions can also facilitate the development of skills among students in the higher level of education. Students from these training institutions can start their own businesses after completion and reduce the unemployment rate in the country. The industrial technique can be enhanced to identify the employment needs of the country and improve labor-intensive technology in order to employ more people instead of using machines and other fully technological systems (Sari, 2019).
There is a need to design a policy to solve seasonal unemployment issues, mostly in the agriculture sector, the provision of alternative job opportunities for workers who depend on seasonal jobs will help reduce the unemployment rate during unfavorable seasons. Also, the use of multiple cropping can be encouraged in order to facilitate the production of crops favorable in any given season. The addition of varied plantations, animal husbandry, food processing, and other farming practices will enhance employment.
The use of communication and employment exchanges can be provided to enhance the dissemination of information regarding job opportunities available anytime. This will alert the public in order to enhance the employment rate and reduce frictional unemployment. There is a need to assist self-employed individuals in order to facilitate their work and production. This can be in a form of financial support, technical training, and raw material support in order to improve self-employed businesses.
The development and implementation of policies that encourage the development of more jobs in a country will help reduce unemployment. There is a need to increase development of jobs in a country and increase employment of labor in order to help them gain benefits and contribute towards societal development. There can also, be enhanced employment program facilitation, this is done by setting plans to develop infrastructure, power supply, roads, and other facilities that encourage production (Sari, 2019).
Costs associated with unemployment
There are some costs associated with unemployment which include individual and societal costs; the major cost to unemployed individuals is income lost, this is the situation where a person does not get any income due to unemployment. Unemployment affects people’s ability to earn money. The situation can hinder people’s ability to finance and take good care of themselves. The well-being of people becomes disrupted due to a lack of income to support themselves. The cost to society is a reduction in productivity through a decrease in goods and services, the people do not have money to purchase goods and services, this also affects the performance of companies and organizations in the society. The situation also causes waste of resources including labor, since the economy does not utilize these resources efficiently. The situation, when people take up jobs below their qualifications, brings about inefficient use of labor. This also results in the loss of skills and labor capital in the economy (Alrasheedy, 2019).
The situation of unemployment can affect the health of people in the country, this includes the mental and physical wellbeing of individuals in the country. There is an incidence of family and social unrest, an increase in the crime rate, and other bad practices in society. The situation of unemployment can cause disruption on confidence and self-esteem among people who are unemployed (Alrasheedy, 2019). The situation can drastically deplete the skills, motivation, and well-being of people in the country. The situation of unemployment also causes loss of tax and revenue to the government, development of the country will be slowed and hindered. The expenditure incurred by the government increases as a result of providing support to unemployed people in the country. The situation of a high rate of unemployment will bring about severe problems to individuals, the situation where the unemployment problem takes longer duration, the country resort to borrowing from other countries and becoming indebted to those countries.
Unemployment is a major social issue in many countries in the world, the situation of unemployment is a challenge to the government, employers, and individuals in the society. The types of unemployment can be directed to frictional unemployment, structural unemployment, cyclical unemployment, and seasonal unemployment. The situation of unemployment can be identified when a person is actively seeking a job but does not get any available. This can also include people who are working in jobs that are below their qualifications, experience, and satisfaction. The situation where there is a high level of unemployment will result in several economic distress and problems. The situation of unemployment hinders people to engage in productive work to facilitate development in the country. This will result in a decrease in economic productivity and development.
The two categories of unemployment are voluntary and involuntary unemployment, the situation where one moves out from a job to search for another is known as voluntary unemployment, and a situation where a person is laid off and now looking for a job is known as involuntary unemployment. There are several causes of unemployment, including population growth, slow economic development, people who depend on seasonal jobs such as agriculture production work can become unemployed. A decrease in industrialization and investment can account for unemployment, improper economic planning can also result in unemployment challenges. The situation of unemployment can result in social unrest, an increase in the crime rate, and other bad practices in society. The situation of unemployment can cause disruption on confidence and self-esteem among people who are unemployed. Unemployment can be solved when there is education, development of new jobs, investment, and support of self-employed workers.
Alrasheedy, A. (2019). The cost of unemployment in Saudi Arabia. International Journal of Economics and Finance, 11(11), 1-30.
Hauser, M. M., & Burrows, P. (2018). The Economics of Unemployment Insurance (1st ed.). London: Routledge.
Hwang, G. J. (2019). How fair are unemployment benefits? The experience of East Asia. International Social Security Review, 72(2), pp.49-73.
Sari, A. I. (2019). Social Entrepreneurs and Innovation for the Unemployment. International Journal of Economics and Management, 1(3), pp.72-79.
Wolcott, E., Ochse, M. G., Kudlyak, M., & Kouchekinia, N. A. (2020). Temporary Layoffs and Unemployment in the Pandemic. FRBSF Economic Letter, p.34.