Although there had been strong economic growth in the past, with the recent downturn of the global economy, the labor market is performing extremely poor. Employment has expanded by just 50% of annual global targets. The numbers of unemployed people are on a high increase due to lack of job opportunities.
Most of the working population seems to be rising from low-productivity and low-pay sectors. On the whole, industrial, construction and manufacturing sectors are bringing up figures showing “net job loss.” And most of the new jobs created in the global economy are part-time jobs and not the full-time jobs that many governments seem to be promising, but not creating.
The estimated number of jobs which are expected to be created on an annual basis is falling by the day. This makes it very difficult to find jobs and causes continuous unemployment. Governments are facing “job deficits” (lack of jobs) and the situation is becoming extremely serious!
In many economies, although there has been GDP (Gross Domestic Product: country’s net output) growth, unemployment seems to have grown equally. Because of the soaring unemployment, there seem to be no drastic changes in wages or family incomes.
The Lack of Job Opportunities: job employment opportunities can pose great problems to individuals. Because they have no means of earning a living, the unemployed could face problems in paying rent or even mortgages. This may lead to homelessness. Furthermore, unemployment can increase susceptibility to problems like illness, malnutrition, mental stress and loss of self-confidence and eventually depression. Although it is a known fact that unemployment can cause crime rates to increase, because of the provision of many welfare benefits to the unemployed (in western countries), there is no proper evidence on this aspect. On the other hand, unemployment may force people to resort to ‘suicidal’ thought, due to the inability to cope with the many personal problems that arises with it. Therefore, it can be concluded that unemployment does lead to an increase of suicide incidences in a country.
However, the combination of unemployment with lack of financial resources and social responsibilities may cause individuals to take up work that doesn’t fit their career profile or their skills. Therefore individuals may under-utilize their potential and talents, leading to “underemployment.”
From a social perspective, an economy which doesn’t create enough job opportunities for its people faces many social problems, especially in terms of under-utilization of resources, i.e. labor. Unemployment reduces the productivity of an economy which would probably perform better if the entire workforce was employed. During the Great Depression, it has been estimated that unemployment cost the US economy nearly $4,000 billion! What more, long periods of unemployment can cause workers to lose their skills and even reduce their life expectancy!
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