The high level of employment in any nation promotes the sound of the economy. When youths and women are in full employment, the country social, political, and economic aspects are in a better position. Through a high level of employment, the government gets wide ways of obtaining taxes, as the product output is increased.
Through an increment of government revenue and increased output in productivity, there is growth in the economy and poverty reduction (Boyes and Melvin 312). In a country where the level of economy growth is high, there are more and more opportunities.
High levels of employment make the economy stable and help in recovering damaged parts. Even if the terms of employment are short or long they tend to boost the economy a great deal. Other benefits related to the employments are high levels of entrepreneurship due to the increased participation of young and energetic people in the labor market. Economists say that well paying jobs improves the overall incomes and social money spending of poor people, and assists a great deal in financing social activities.
Unemployment is an economic condition that occurs when an individual or a group of people seek jobs to no success. In every country, the level of unemployment depends on some factors such as the status of the economy, market and commerce forces.
There are five main types of unemployment (Baumol and Blinder 630). To begin with, there is frictional unemployment that is a temporary status of the job seekers. This condition occurs when a person takes a break from his or her current job and start looking for another opportunity somewhere.
This period when one shifts from one point of work to the other is the one that creates frictional unemployment. In most of the developed countries that have advancement in various ways, there is a high probability of one securing another job after leaving one. The major challenge is in the developing and in the underdeveloped countries where if one quits from one job, getting another one is a problem.
The issue of frictional unemployment can have a solution through employment insurance programs. This program offers support and temporary sources of income to the people who in several occasions become unemployed. In most cases, people do not quit from their jobs voluntarily but because of some circumstances like nursing a sickness, giving birth, or other critical issues in the family.
Through this insurance program, the unemployed people are still made to earn some income to continue supporting their families, and meeting their needs (Tucker 380). During this period, the unemployed people face their challenges with more confidence. The government should concentrate on empowering these insurance programs such that they are in a position to meet even large group of the frictional unemployment cases.
The employees who mostly benefit from this program are those who quit their jobs due to good reason like shortage of work, or sudden break of the job management. The government should also come up with a policy of encouraging the idea of permanent jobs to avoid such breaks. If one is in a permanent job, and well paid, it would be hard for one to quit from such a job. Taxation should be favorable to some salaries, as the net salary is so small unable to sustain ones life.
With reasonable tax on salaries, employees will have a good amount of salary to manage their lives without any need of quitting. The major limitation of the insurance programs policy is that the employees have to make regular contributions of some amount to the program. However, there is no guarantee of receiving this compensation after quitting a job. Compensation depends on the reason of quitting.
The second type of unemployment is structural unemployment that happens due to major changes in the economy. The major reason behind this type of unemployment is when the job in question requires more skilled workers than the current ones.
In addition, this form of unemployment may occur because of the difficulties of moving to a new working location, or challenges of learning new skills to meet the needs of the available jobs. Sometimes, the economy may advance greatly making use of new machines and technologies replacing some employees.
Structural unemployment in most cases occurs due to creation of new job opportunities to meet the labor demands in the market. This type of unemployment is very common as far as the economy of the country is flexible whereby when there are some firms going down, there are others that are in need of other skills and expands at the same time (Gwartney, Stroup and Sobel 516).
The rate at which the technological advancement of the nation is developing and globalization, the need for a more advanced labor is required. The nation cannot avoid be prohibited from advancing in technology or in its economy but there can be a solution for this type of unemployment.
The fact is that every nation is subject to some ways of advancement, and because of this advancement, a continuous mismatch of labor and the skills required is inevitable. As far as the government acts fairly to all sectors in the economy, there is need for special attention to service based sectors, such that it will be possible for them to accommodate as many employees as possible. Policies to increase job opportunities in service sectors can help many people to secure jobs in these sectors.
The rest of people, who may not fit in service industries, will then find some places in the industrial sectors. Some policies of regular training of employees in industrial sectors are also very important (Tucker 89). These sectors should emphasis on conducting regular trainings to keep their employees updated and matching with the current changes.
Before an industry purchase a modern machine that may require new skills, there is need to equip the current employees with the necessary skills as long as they are ready to learn. Most of these employees will be ready to learn to secure their jobs. It can be much disappointing if an industry can lay off more than 85% of its employees because they lack the necessary skills.
The only group that may deserve dismissal is of those who may find it hard to learn those new skills due to their education levels. If such policies may put into action, a country can only be experiencing very few cases of structural unemployment. If government supports service sectors fully and other business departments there will be more job opportunities for the citizens to choose where they fit best (Campbell and Craig 203).
Advancement of the country’s economy and its technological levels should be an opportunity for job creation but not a way of dismissing workers. Advancement is worth celebration but not an issue causing such disappointments of joblessness. Government may be much willing to support service industries, but there is need to distribute resources uniformly hence putting a limitation to that policy. If it supports one industry more than the rest, it may seem like discrimination.
Another type of unemployment is classical also called real wage and occurs as result of trade unions and other labor organizations actions. Severally, trade unions fight for the rights of the employees especially if the salary they are getting is not worth their responsibilities at their working places. When they realize that a certain company is underpaying the employees or the working conditions are not favorable for them, it is their duties and responsibility to fight for the rights of those employees.
To some extent, they calls for a bigger salary increment that the company may not afford to pay, and in return, the company decides to reduce labor and pay the few that it can afford. Although there is right for the trade unions to fight for the rights of the employees, the type and the status of the company should also be a factor to consider before taking actions. It is better to receive little salary than to survive without any money to support personal and family needs.
The government may try as much as possible to curb this type of unemployment through some policies like a minimum amount of wages than any company should not go below, and the minimum salary for the employees. Those terms can only be ignored incase there is a special arrangement between the employer and the employee. Sometimes it can be challenging to the government to take hard measures on some companies, as they also have their own rights in operations (Baumol and Blinder 420).
The trade unions should be taking some time to talk with the employees first before they take any action of salary negotiations. The employee should be ready to take the risks of the negotiation outcome if it will be necessary for that salary complaint. As much as the government tries to put some limitations on the wages that the company should pay its employees, some companies object and decide to negotiate with its employees.
The other type of unemployment is seasonal that mostly occurs in industries that deals with seasonal customers or products. For instance, tourism industries work only during the periods when there are expecting tourists. When these jobs are out of season the employees stays unemployed (Tucker 113). The employer may engage these employees in other minor jobs, even if with relatively lower salaries during the off-season as they wait for the peak of the season.
On the other hand, the government may provide these employees with some reserve works in the public sectors to keep them going during the hard seasons. This can only be possible if the country’s economy is doing well and the government has enough money to take care of these situations. Although it may be hard to take care of every individual, but the majority should benefit and earn something during such seasons.
Those people, who suffer from seasonal unemployment, are at an advantage on the other hand. When their job is on season, they earn much money that may take them through the off peak seasons or invest in other fields to keep on earning.
During this period when they are not officially working, they can also look for other seasonal jobs before they resume to their normal fields. Even if the government can try to accommodate those people during the off-season periods into public sectors, it cannot afford to absorb all of them, hence putting a limitation to this policy.
Disguised unemployment is another type most common in the underdeveloped countries. The major problem in these countries that results to this type of unemployment is the slow growth of capital stock.
The rate of population growth is much higher than the capital stock growth, hence becoming very hard for the country to offer a reliable type of employment (Gwartney, Stroup and Sobel 121). A country with such a problem is realized through a high number of unemployed people in the urban areas especially cities. In such countries most of the young energetic people end up in agricultural activities where the name disguised unemployment comes from.
The people who finally end up in agriculture do not add any value as they do this work unwillingly, as they have little knowledge on how agricultural activities operate. The government can only solve this problem through establishing more sectors by adding spending to create job opportunities, although the overall Gross Domestic Product of the nation limits this policy sometimes.
The last type of unemployment is cyclical that occurs during recession. At times, the economy of a nation may be so down whereby the demand of the goods and services is also down hence pulling down the need for labor in industries and other sectors.
During such a period, most company’s have no other option other than firing any surplus labor. It is a hard moment of every company as they wonder on what criteria they will suck the excess employees. Most of them make use of the education levels and the acquired skills of the employees as the best factor of elimination.
When the country’s economy is in recession, the government can only be the savior. The government may decide to lower both the tax and interests rates, which will in return boost the consumer spending as well as the demands of various goods and services. This act by the government will create more job opportunities that creation of cyclical unemployment. Prolonged reduction of the government revenue may limit this policy, as the government also requires money for its operations.
In conclusion, the government does not set any target in its operations for the unemployment cases. Its main objective for its citizens is to have enough jobs in the market offering opportunities to everyone who is in need of work. The government aims at equalizing the demand and the supply policies between its citizens and the industrial needs to make both benefits from one another (Gwartney, Stroup and Sobel 701).
To some extent there are inevitable limits that the government cannot exceed as far as controlling unemployment cases is concerned. In several cases, the policies that are looked upon to improve the levels of employment in a nation may be very expensive and on the other hand, they have an opportunity cost for them to be successful.
Works Cited
Baumol, William and Alan Blinder. Economics: principles and policy. New York: Cengage Learning, 2008.
Boyes, William and Michael Melvin. Economics. New York: Cengage Learning, 2006.
Campbell, David and Tom Craig. Organisations and the business environment. London: Butterworth-Heinemann, 2005.
Gwartney, James, et al. Economics: private and public choice. New York : Cengage Learning, 2008.
Tucker, Irvin. Macroeconomics for Today. New York : Cengage Learning, 2008.