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Unemployment Problem, Its Cascading Effect and Solutions to Tackle The Issue from Different Angles

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Unemployment is a critical social and economic problem in both developed and developing countries. Recent survey shows that Arab youth consider unemployment as a serious problem and a big social concern. This report discusses and defines the unemployment problem, its cascading effect and suggests solutions to tackle the issue from different angles.

The definition of unemployment by International Labour Organisation (ILO) is “those people aged 16 or over are unemployed if they are: Out of work, want a job, have actively sought work in the last four weeks and are available to start work in the next two weeks. Or out of work, have found a job and are waiting to start it in the next two weeks”.

Unemployment can be either voluntary or involuntary. The voluntary unemployment is a condition when a person is out of jobs because of his/her own desire to not to work on the prevalent or prescribed wages (i.e. he chooses not to take a job). On the other hand, involuntary unemployment is when a person is separated from remunerative work and devoid of wages although he is capable of earning his wages and is also anxious to earn them.

The unemployment rate is defined as the percentage of unemployed workers in the total labor force, the total labor force consists of all employed and unemployed people within an economy. (Team, 2018)

unemployment Rate= (unemployed workers)/(total labor force) *100%

The unemployment rate is very important indicator as it provides insights into the economy’s spare capacity and unused resources. Unemployment usually increases as economic activity slows, below is illustration of unused youth unemployment rate in Arab World 2014, and 2016.

Unused youth unemployment rate in Arab World 2014 and 2016

As per The international labor organization (ILO) the statistics of both employed and unemployed in 2012 shows that about 6% of the world population are unemployed and youths are the ones who are unemployed.

Unemployment is the biggest concern among Arab Youth who believed that their biggest concern about the future is the fear of unemployment. This was the results of the ninth ASDA’A Burson-Marsteller Arab Youth Survey, this survey was conducted over 3,500 Arab national men and women between 18 and 24 years old between February 7 and March 7, 2017. This survey based on face-to-face interviews held in Arab countries (Bahrain, Kuwait, Oman, Qatar, Saudi Arabia, UAE, Algeria, Egypt, Libya, Morocco, Tunisia, Iraq, Jordan, Lebanon, the Palestinian territories and Yemen). The sample expressed their worries that they might not be able to either keep their current jobs or find new positions, as they complained about the job market in their relevant Arab countries.

No less than 35% of the surveyed Arab youth are concerned with unemployment.

Unemployment rate in different countries (Statistics / facts & figures)

As per the data shown from the central bank of United Arab Emirates UAE, the unemployment rate in UAE was 1.72 % in 2017, while 1.64% in 2016.

The total unemployment rate in UAE declined to about 2.44% in 2014 from 2.82% in 2013. According to the same estimates, during 2017 the unemployment rate was 1.72%.also population 9,400,000, Change of employment was 3.20 %.

Based on the data collected 2017, the unemployment rate in UAE is relatively less as the highest rate is Spain have 16.74%, turkey 9.6%, the lowest rate Switzerland 2.40% , Japan 2.20%.

Unemployment Rate by Country

Country – Last – Month collected – Previous – Highest – Lowest

Spain – 16.74 – 18-Mar – 16.55 – 26.94 – 4.41 % Quarterly

Turkey – 9.6 – 18-Apr – 10.1 – 14.8 – 7.3 % Monthly

France – 9.2 – 18-Mar – 9 – 10.7 – 7.2 % Quarterly

Canada – 6 – 18-Jun – 5.8 – 13.1 – 2.9 % Monthly

United Kingdom – 4.2 – 18-May – 4.2 – 12 3. – 4 % Monthly

United States – 4 – 18-Jun – 3.8 – 10.8 – 2.5 % Monthly

China – 3.89 – 18-Mar – 3.9 – 4.3 – 3.89 % Quarterly

India – 3.52 – 17-Dec – 3.51 – 8.3 – 3.41 % Yearly

Germany – 3.4 – 18-May – 3.4 – 11.5 – 0.4 % Monthly

Switzerland – 2.4 – 18-Jun – 2.4 – 5.7 – 1.5 % Monthly

Japan – 2.2 – 18-May – 2.5 – 5.5 – 1 % Monthly

The main reasons for unemployment are:

  • Collapse or closure of companies.
  • Downsizing and redundancy.
  • Lack of educated, qualified and experienced / skillful people.
  • Lack of employment opportunities due to limited companies, industries.
  • Low or insufficient wages.
  • Automation and new technologies. Fewer workers needed to run more technologically advanced companies.
  • Technical difficulty adapting to changing requirements of industry.

Seasonal variation as some employment is seasonal (agriculture, tourism and construction). Off-season workers are laid off. Students return to full-time education.

The effects of unemployment not only affects workers but also their families who lose wages, and the society as a whole loses their contribution to the economy in terms of the goods or services that could have been produced, creating a cascading effect that ripples through the economy.

Unemployment even affects those who are still employed, as this increases the amount of work they have to cover. In addition, Unemployment have a negative mental effect on those who are still working. As they become more afraid losing their own jobs or looking for something better because they “are lucky” to be employed at all. Also may even feel guilty about having a job when their co-workers are out of work..

Unemployment solutions, challenges and social integration

Unemployment is one of the oldest human problems, where different factors interrelate and may result in increasing poverty situations. Humans have always tried to solve it, as it affects society by implementing effective and efficient strategies that allow the reduction of unemployment. “Around the world, there is growing recognition of the need to strengthen policies and investments involving young people… Youth can determine whether this era moves toward greater peril or more positive change. Let us support the young people of our world so they grow into adults who rise yet more generations of productive and powerful leaders” said Ban Ki-Moon, Secretary-General of the United Nations. Here are suggestions to solve the unemployment problem which ensure effective interaction between all society members:

  • Change in industrial technique, for example manufacturing approach should suit the needs and means of the people. It’s vital that labour intensive generation ought to be encouraged in place of capital extensive generation.
  • Policy regarding seasonal unemployment: For example: Agriculture should have multiple cropping. Also plantations, horticulture, dairying and animal husbandry should be encouraged. Cottage industries should be encouraged.
  • Change in education system: Educational pattern should be completely changed. Students who have interest for higher studies should fulbe admitted in colleges and universities. Emphasis should also be given on vocational education
  • Expansion of Employment exchanges: More employment exchanges should be opened. Information regarding employment opportunities should be given to people.
  • More assistance to self-employed people and entrepreneurs: self-employed are engaged in agriculture, trade, cottage and small scale industries etc. These persons should be encouraged, helped/supported financially, providing raw materials and technical training.
  • Powerful and productive employment: The government should put policies toincrease employment opportunities, and affords employment to anybody.
  • Government should support and increase employment opportunities and production in agriculture and industrial sectors.
  • More importance to employment programmes: In five year plans more importance should be given to employment.
  • Decentralization of industrial sector. If industrial activities are centralized at one place, there will be less working chances within surrounded areas. So authorities ought to encourage decentralization of industrial activity.

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