Unemployment

INTRODUCTION

The problems of unemployment are not new and they do exist everywhere. Even the industrial countries that are considered the richest countries have not been spared from the distinctive implications of unemployment. However, in the less developed regions of the world like Africa, Asia, & Latin America, the problems of unemployment are more serious & deep sealed in the rural areas of the poor countries, unemployment is more widespread, particularly disguised unemployment. This is a situation where individuals are working actually but they do not contribute solutions to the problem. There are various unemployment causes such as changes in technology, renovations, business cycles and seasons. Some of these causes are temporary in nature. However there are types of unemployment, which have become persistent. In the Philippines, more individuals join the long lost of jobless persons every year. It is a pity that colleges and universities are producing graduates but due to present economic crisis, where unemployment is prevalent, the increase in the number of graduates has aggregated the unpleasant situation. But despite this depressing economy, many economists and business specialists believe that our economic recovery can only start in 1990. (Economics, Third Edition, Feliciano R. Fajardo)

Unemployment has both economic & social implications. The productive resources are not fully used. Less goods and services are produced by individuals who could have done more. They could have earned more, & with their earnings they have more chance to improve their economic conditions. On the part of country, increase in unemployment rate means a decline in national income/gross national product. In such situations where the GNP declines, government revenues literally fall. Evidently, the government has to put aside some of its important projects due to the lack of funds. In most cases, the country has to borrow money from foreign sources to be able to pursue its development objectives or for its economic recovery program.

A job provides hope for re-employment in the near future, not a few jobless people develop an attitude of frustration. Thus, may lead to loss of self-confidence or to more several crimes. (Feliciano R. Fajardo, Economic, third edition)

A job experience could give more chances of reemployment for aspiring job seekers. Unfortunately, those who were denied of getting an employment on the first try would eventually give up and eventually lose their chance of being employed.

THE CAUSES OF UNEMPLOYMENT

Unemployment is caused by several factors. First, the employers seek the people who are most suitable for the job. Qualifications and credentials of employees are prioritized together with the skills of the aspirants. Usually, employees are under-skilled or under-qualified for the jobs. In our country with a high literacy rate of 92.3% (www.census.gov.ph), statistics would show that this may not even be an indication that literacy is congruent with employment rate.

Second, and closely related cause of unemployment are with actions of labor unions are collectives my workers who rally together for higher wages, better working conditions & more benefits, these unions force firms to spend more money on each worker, some on the form of wages & some in form of benefits. Overall, this has an effect similar to minimum wage law, where workers are demanding wages greater than the firms are willing to pay.

In microeconomics, we learned that in an efficient market, the price of goods change to equilibrate the quantity demanded and the quantity supplied.

A third reason is based on theory of efficiency wages. The basic idea behind efficiency wages is that firms benefit by paying their workers above the equilibrium wage, since higher wages produce happier, healthier and more productive workers & may even increase worker loyalty.

A fourth reason would be because of the improvement of our technology. Companies strive for the automation of processes, which have drastically improved production at lesser labor costs. Because of automation, companies employ less number of people because they depend more on machines and robots to do the job. With this, there are no more jobs available for the people.

THE EFFECTS OF UNEMPLOYMENT

The first and most obvious effect of unemployment is Poverty. As per the latest census, the Philippines is home to 76.5 million people, almost 85% is composed of the poor and marginalized society. From the working force (15 years old and above to 60 years old), unemployment rate is 8.1% in 2006 and projected to be at 7.8% in 2007. This would mean that about 500,000 occupants of this country are not employed, excluding the fact that another 21 % or about 1,200,000 persons are underemployed. This is one of the most depressing situations that are caused by unemployment.

The effect of poverty has also its sub-effects such as the proliferation of crime in the country. Although the unemployment rate is expected to decrease this 2007, the crime rate remains to be high. And majority of criminals are those who have no source of income and no means of livelihood. So there seems to be a positive relation between unemployment and the commission of crime.

Moreover, unemployment means lack of income. With this, since families have no means of subsistence, this carries with it the problem of malnutrition and parents cannot also afford to send their children to school. This aggravates the situation.

RECOMMENDATION

The researchers believe that a job provides hope for material and social development. In order for the economic stability of our country be achieved, the researchers suggest the following recommendations:

1. There must be an improvement in the quality of education.

Literacy rate has proved to be not an indicator of employment, at least for our country. This may be absurd because high literacy rate suggests better jobs for people. But in our country, literacy rate may be high, but this only relate to the reading and writing skills of the people, and not really based on comprehensive and analytical skills. They must also teach the students to inculcate a sense of passion towards success and progress.

Our government should develop means and procedures in improving the quality of education given by schools so as not only to focus on the basic reading and writing skills but also target the holistic development of students. It is not uncommon that the high paying jobs are given to highly qualified applicants. Schools should produce not only academically good graduates but also graduates who are equipped with proper training and skills that they need for employment in the future.

2. Government should support microeconomic enterprises.

Microeconomic enterprises, or those small and medium enterprises, help alleviate poverty and unemployment. Small businesses may be supported by creating programs, such as providing loans, to the marginalized but deserving people. Often, the poor are willing to start business but the main problem is the lack of capital. If the government would make programs that could support the poor in starting their own small business, the marginalized society would have better chance of improving their status.

3. Regulation of market competition.

Competition in the market is good. It is the key to have better goods and services at the most reasonable prices. But market competition should also be regulated by the government. Imported products are a usual sight in our market today. Because imported products are preferred because of its lower prices, our locally-produced goods are not patronized. The influx of imported goods in our market kills our local market. With this, local companies close or lay-off its employees which would then increase the unemployment rate.

CONCLUSION

The essence of social responsibility is when man thinks of the whole system and begins to develop societal values into his actions. In the same manner, the government has a social responsibility to the people. This whole system is integrated with different factors vital in its development.

That the government plays a vital role in the destructive implications of unemployment and in the recovery of the people from being drowned and being impaired from the effects of unemployment and of what unemployment brings. But man is also responsible and answerable for his own actions.

The government and the governed should be hand-in-hand in working towards development. We cannot put the whole blame to the government; we can only hope that our government would do better. Man needs to participate in the development of the whole structure by taking in part in being responsible for himself and helping others towards progress. After all, progress really starts from within.