Long-term unemployment solution is hard to find out and unemployment is a global issue that affects industrialized, emerging, and impoverished countries. The main evidence is that even industrialized countries are struggling with unemployment. According to one survey, approximately 6.7% of Americans were unemployed in December of 2013.
According to the International Labor Organization’s statistics on both employed and jobless people in 2012, approximately 6% of the world’s population is unemployed, and youngsters are the ones who are unemployed, i.e. youth unemployment.
To tackle the unemployment problem and improve the nation’s economy through employment, the government and citizens must take appropriate remedial measures.
- What Exactly Is Unemployment?
- Unemployment Statistics
- Types of Unemployment
- Ways to Solve the Unemployment Problem:
What Exactly Is Unemployment?
Unemployment occurs when a person looks for work but is unable to find work.
Unemployment is one of the most serious problems that exists today. The phrase unemployment refers to the state of the economy.
The unemployment rate is commonly used to calculate unemployment. It is usually the number of unemployed people divided by the number of people in the labor force.
According to the International Labor Organization, around 200 million people worldwide, or roughly 6% of the total workforce, were unemployed in 2012.
In this fashion, let us look at a few characteristics of unemployment and the many aspects associated with it.
In 1982, the unemployment rate reached a post-World War II high of 9.7%. The Bureau of Labor Statistics (BLS) of the United States Department of Labor collected the unemployment and wages data.
There were other reports that mentioned a 9.6% unemployment rate in 1983 as a result of an economic slowdown. This happened in the aftermath of the Great Depression of 1983. The unemployment rate fell to 5% in 1989, but then began to rise again. This resulted in 6.8% in 1991 and 7.5% in 1992.
Types of Unemployment
1. Structural unemployment:
Unemployment happens when there is a mismatch of talents in the labor industry. Some of them are divided as shown below.
Geographical immobility: Geographical immobility occurs when an individual finds it difficult to relocate to another place in search of work. For example, jobs may be plentiful in California, but getting accommodated or finding proper schooling for children may be difficult.
Occupational immobility: This type of unemployment arises when a candidate is unable to learn new skills that must be utilized in a new industry due to a change in technology. A farmer, for example, may be unable to work in high-tech companies.
Technological change: Many industries have labor-saving technology, which has contributed to a decrease in labor. This has been the primary cause of unemployment since the advancement of technology.
Economic structural change: Another cause of unemployment is the economic structural change that occurs in a country. For example, the weakening of coal mines due to a lack of competitiveness has resulted in the layoff of a number of coal mine workers. These folks are unable to get work in any new industries, including computer and technology.
2. Frictional unemployment:
This sort of unemployment is prevalent in many nations. This sort of unemployment is the time taken by individuals as they shift jobs. Graduates looking for another employment are an example. It will undoubtedly take time to find another work.
3. Real wage or classical unemployment:
This type of unemployment occurs when wages in a competitive job market rise above the equilibrium level.
This sort of unemployment occurs, for example, when the supply of labor exceeds the demand for labor. This sort of unemployment happens when trade unions and labor organizations bargain for better salaries. As a result, demand for labor falls.
4. Voluntary unemployment:
Voluntary unemployment occurs when people choose to be unemployed rather than employed. A simple example is that if someone can get a decent benefit, they choose to stay with the benefit rather than being employed.
Frictional unemployment is another type of unemployment in which people choose jobs until they find one that is suitable for them.
5. Demand deficient or cyclical unemployment:
Demand deficient or cyclical unemployment occurs when the economy operates at less than full capacity. A basic example is aggregate demand, which falls during recessions, resulting in a slowing of negative economic growth and output.
When output falls, so does the employment of workers, resulting in the development of fewer commodities.
There are numerous companies that go out of business, resulting in mass layoffs. During recessions that result in unemployment, more workers are laid off.
6. Seasonal unemployment:
This is a type of unemployment that occurs owing to a seasonal shift in the nature of the job. Catering, fruit picking, tourism, and hospitality are just a few of the industries affected by seasonal unemployment.
7. Youth unemployment:
Another important issue that is occurring is youth unemployment. Globally, 73 million people are neither unemployed nor enrolled in school.
Youth unemployment is three times higher than that of the elderly. In the United States, the youth unemployment rate is approximately 5.7%, with approximately 17% of the nation’s youth unemployed.
8. Casual Unemployment:
Casual employment is the type of employment that is available for employees who work on a daily or short-term basis. When the contract expires, the employee will become unemployed, which is known as casual unemployment.
This form of unemployment would not last long, as the workers would either find another contract job or have their previous job extended. The majority of venues where people can find casual work are dockyards, market places, the film business (junior artists), and so on.
Ways to Solve the Unemployment Problem:
Unemployment can be solved if the country plans ahead of time. There are several approaches to addressing the natural rate of unemployment.
Some viable strategies for the government and the people to collaborate to solve long-term unemployment are as follows:
- Maintaining political stability
- Raising educational standards
- Control of the country’s population growth Launch of new empowerment programs
- Encouragement of self-employment and entrepreneurship
- ensuring basic education access
- Reducing the retirement age
- Avoid being lazy.
- Being innovative, upbeat, and competitive
- Being optimistic in order to avoid unemployment.
With all of this, few policies that promote economic growth should be undertaken.
- Lowering taxes
- avoiding investing in ineffective programs
- avoiding favorite shows
- Avoiding industry overregulation
Monetary policies: One major strategy that can help avoid unemployment is an expanded monetary policy. The Federal Reserve should pursue expansive monetary policy because it is swift, effective, and powerful.
When interest rates are low, as noted above, individuals can borrow money to buy a car, consumer goods, and other items.
In this approach, the interest rates allow businesses to borrow money at reduced rates, providing them with capital to hire personnel to satisfy increased demand.
These are some of the steps that must be taken in collaboration with the people and the government to address unemployment. When properly planned and implemented, the national unemployment rate can be reduced.
Because natural unemployment is a big worry in any country, working on it is critical in order to prevent the country from economic deterioration.
Because unemployment impacts every citizen in the country, suitable economic circumstances and government upkeep are required. In times of recession that result in unemployment, the government should be prepared to take the appropriate steps. The unemployment solutions are also mentioned, and so unemployment is an aspect that all inhabitants of the country should focus on.