If a person is of working age and is seeking, but cannot find a job, the situation is defined as unemployment. There are various forms of unemployment. Unemployment caused by lack of aggregate Demand in an economy, is a cause for concern. It is an indicator of economic recession.
FACT 1: The first UN Millennium Development Goal is to eradicate extreme poverty and hunger. Target 1 A for achieving this goal is to achieve full and productive employment and decent work for all, including women.
FACT 2: The unemployment rate is measured by dividing the total labour force of a country by the number of those in the labour force who are unemployed. A person is considered unemployed if he/she falls within in the working age group, does not have a job but is actively seeking work. Voluntary unemployment is not considered e.g. a mother who stays home to look after her children.
FACT 3: There are various forms of unemployment. Seasonal unemployment occurs when people work only during a particular season, e.g. agricultural labourers work only during sowing and harvest season. This form of unemployment often escapes being counted.
FACT 4: Frictional unemployment is natural. It occurs when people are looking out for suitable jobs or changing jobs. It lasts for a short period.
FACT 5: Under employment occurs when people are willing to work fulltime, but can only find part time work. Casual unemployment is when contract or daily wage labourers do not have work for a period of time.
FACT 6: Unemployment is considered a bane to the economic and social well- being of a country. The immediate ill effect is the loss of earnings to the individuals and those dependent on him/her. This will lead to stress and health problems. This often leads to rise in crime rates and increased vandalism. Unemployment also reduces the country’s GDP.
FACT 7: Youth unemployment is highest in North and East Africa. 25.6% of youth are unemployed in the region. In Syria 73% of the total number of unemployed persons are in the age group 15 to 24. Every 6th person in the world is Indian and every 3rd poor person in the world is also Indian. Initially India made no attempt to actively tackle the unemployment situation. It was thought that general economic development would percolate down to provide employment to all. Planned measures were introduced in the nineties. In 2005 India passed the National Rural Employment Act that guarantees 100 days of wage employment to rural households engaged in manual labour.
FACT 8: Unemployment and poverty go hand in hand. Though poverty is not always measured in terms of income, income is an accurate indicator of the poverty situation in a country. Children of underemployed or unemployed parents form the largest group of impoverished in any country.
FACT 9: Some world leaders have stated that unemployment is not necessarily a negative; in fact it controls spiralling inflation. Norman Lamont, Chancellor of the Executive, UK said in the House of Commons, “Unemployment is a price worth paying for lower inflation.” This view is not upheld by economists as it implies huge government expenditure on welfare.
FACT 10: Countries like Ethiopia adopt employment intensive schemes to reduce unemployment rates. There is insufficient data to evaluate the efficacy of these schemes, though they are considered to be reasonably successful.