CONCEPT OF UNEMPLOYMENT, Definition of unemployment. Unemployment is defined as a situation in which persons of working age, and willing to work are unable to find a employment.
In other words, unemployment refers to a situation in which people who are
capable of working and who are qualified I age to work cannot find employment.
Unemployment rate is denoted by symbol ‘U’ and is represented by a form below:
U = Number of unemployed persons x 100
Working population or labour force
Example of unemployment
A country has a working population or lab force of4.8 million of which 3.6 million
are employed. Calculate the unemployment rate of the country
Labour force = 4.8 million
No. of employed = 3.6 million
No. of unemployed = 4.8m – 3.6m = 1.2m
U = Number of unemployed persons x 100
Working population or labour force 1
= 1.2m x 100
Types of unemployment
- Structural unemployment: This type of unemployment which is the result of changes in the pattern of demand of certain commodity.
If the demand is low, it could lead to industries reducing their workforce and this eventually results in structural unemployment.
- Seasonal unemployment:
This type of unemployment which takes place in industries whose production is subject to seasonal variations and demands
- In other words, there are certain seasons for production. When such industries are off season, i.e. not in production, very few workers are required, leading to unemployment. I have seen this type of unemployment take place in PZ cussions, Ikorodu lagos. In fact, in the year 2009 I was affected and laid off
- Mass unemployment: Mass unemployment is the type of unemployment which affects many occupations and industries at the same time. It is caused as a result of decrease or fall in the quantity of goods demanded.
The industries so affected will embark on retrenchment of workers leading to unemployment. Mass unemployment is also known as cyclical or deficient unemployment.
- Under-employment: This is the type of unemployment which occurs when an individual works at less than his full capacity so that his productivity is below the maximum. Under-employment occurs when a worker is not working in his full capacity.
- Frictional unemployment: This is the type of unemployment which occurs as a result of changes in the techniques of production.
Due to advancement in technology, machines are introduced in production, which tend to replace labour and this can lead to retrenchment of workers. Frictional unemployment is also called technological unemployment.
- Voluntary unemployment: Voluntary unemployment occurs when a worker deliberately refuses to take up paid employment even though employment opportunities are available. They may be receiving unemployment benefits from government; the available jobs may not be attractive, etc.
- Residual unemployment: This is the type of unemployment that arises as a result of physical or mental disabilities. Those who are disabled, and are not capable of working, fall into this group.
- Casual unemployment: This is the type of unemployment which involves jobs that are not permanent. This is common with the unskilled type of labour, e.g. part time jobs.
Causes of Unemployment
- Inadequate educational system: The educational systems practiced by most developing countries are inadequate as special attention is paid to paper qualification to the detriment of job creation.
- Lack of industrial growth: Most developing countries do not have industries that are capable of employing enough workers. This leads to unemployment.
- Over-population: When a country’s population is too high, it tends to produce many workers and such workers may not have jobs to do, thereby leading to unemployment.
- Lack of social amenities: Labour tends to be unavailable when there are no social amenities in the area.
- Geographical mobility of labour: Due to certain circumstances, labour finds it difficult to move from one geographical area to another and this results in unemployment.
- High cost of education: As a result of the high cost of acquiring education, many find it difficult to go to school and so end up with low paper qualification, which may not permit them to get good employment.
- Use of automated machines: The use of automated machines in factories reduces the need for many workers and this leads to unemployment.
- Deficiency in demand: An overall fall in demand for goods can lead companies to
- Poor development plans: Government does not normally put in place development
plans that can create employment opportunities or take care of the unemployed.
Consequence of Unemployment
(1) Increase in crime rate: When there area large number of unemployed persons, it
Usually leads to increase in crime rate such as armed robbery, car snatching, hired assassination, etc, in a bid to survive.
- Threat to peace and stability: With an ever-increasing number of unemployed persons, the peace and stability of the state will be threatened.
- Reduction in investment: The zeal to invest is always very low when there is a high level of unemployment.
- Migration: When there is unemployment, it usually results in able youths and adults alike moving out of the country to look for jobs in other places.
- Waste of human resources: The time, money and energy spent in acquiring degrees and certificates will be wasted and labour is made idle.
- High rate of dependency: The level of dependency will increase as a result of unemployment.
Solutions to Problems of Unemployment
- Industrialization: Government establish many industries that can employ
- Population control: Population should be controlled to obtain optimum level, so as to match the human population available natural resources.
- Encouraging geographical mobility labour: The enabling environment should be created so that labour should to move from one geographical another.
- Re-designing educational system: The education system should be re-designed to graduate people that are able to create employment.
- Proper development plans: development plans should be put in place to cater for people who are unemployed.
- Provision of social amenities: availability of social amenities encourage workers and this tends reduce unemployment.
- Quality of labour: The quality of labour in terms of skills or training determines the level of wages or salary attracted. Highly educated and professionals workers attract higher level of wages than unskilled workers.
- Condition of the economy: When the economy is buoyant, workers enjoy high level of wages, but when the economy is in recession, wages and salary levels fall.
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- what is a firm
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- scale of preference
- concept of economics
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- factors affecting the expansion of industries
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