How does unemployment and lack of economic opportunity affect the world.

Unemployment is the state where an individual is out of work and looking for available work actively and cannot get the opportunity to work. Unemployment and the lack of economic opportunity are a major issue affecting most nations of the world, especially developing nations. The problem particularly affects the youth, individuals under the age of 30 years. Millions of youths are not participating in the labor market. Some levels of unemployment are inevitable within a society. Most societies that operate on a full capacity still have a level of unemployment known as the natural unemployment level. The production possibilities within a country determine such levels. Unemployment and lack of economic opportunities are a global issue. It has led to many other societal issues such as increased crime levels as unemployed people try and find out a way to survive.

This paper will discuss the impact of unemployment and the lack of economic opportunities in countries worldwide. It will also discuss several solutions to unemployment, such as; better education, equal access to education, more funding and research on the causes of unemployment, boosting job creation and the demand for labor, and improving financial welfare, among others. The paper will justify that unemployment is a problem that the world can solve and should solve.

Background

Some level of unemployment has always been persistent globally, with many individuals moving from rural areas to urban areas searching for job opportunities. The shift from farming economies to industrialized economies led to individuals’ requirement to look for jobs as a way of making a living and sustaining their lifestyles. All industrialized societies are working societies as individuals have to put in work to be eligible for society’s benefits. The problem of unemployment in most countries started as early as the 1970s. In western countries, it was

triggered by the first oil crisis of the mid-1970s, where thousands of people lost their employment. Global crisis leads to the increase of unemployed people and leads to less economic opportunities within nations. The rate of employment in 2008 was at its all-time high due to the financial crisis that affected the whole world. Most individuals that lost their jobs did not recover years after the crisis.

For instance, the 2008 crisis saw the rise of unemployment levels in the United Kingdom to 5% and increased further as the impact of the crisis grew. The country had over 2.7 million unemployed people due to the crisis, the highest level of unemployment the country experienced in 20 years (Pettinger, 2019).

 

In countries in the western world, such as the United States, unemployment rates were also high. The USA rate of unemployment in 2008 was at its highest level since 1945. Over 2.6 million people lost their jobs due to the deteriorating economic conditions and increased economic losses. Most countries are still recovering from the rates of unemployment caused by the 2008 crisis. However, the next financial crisis is around the corner, and millions of individuals are unemployed globally. The lack of jobs or economic opportunities for youths leads to dramatic consequences on the society and eventually helps to further sink the economies of

affected countries. Traditional manufacturing and processing industries are disappearing, with most tasks being automated. The new industries require high sets of skill and knowledge which many youths across the globe lack. Countries that are most affected by unemployment are in the African continent (Oluwajodu et al., 2015). Countries such as Senegal, Djibouti, and Kenya have an unemployment rate of over 40%. Countries in the Caribbean and Haiti show high levels of unemployment.

Causes of Unemployment and Lack of Economic Opportunities

Various factors within an economy cause a lack of economic opportunities and unemployment. Frictional unemployment is caused when people move from one job to another, or it is caused by the time that people take to get a new job. The lack of perfect information in the economy will always result in frictional unemployment. On the other hand, structural unemployment is caused by a mismatch between skills within the labor market. It is caused by occupational immobility, making it difficult to learn new skills or adapt to changing technologies. The structural change in the economy also causes unemployment.

A good example is a change from an industrial and manufacturing-oriented economy to a technological economy. A higher supply of labor than demanded could lead to unemployment. Many youths graduate with skills from tertiary universities in many countries, but the demand for labor is lower than its supply. It is the reason why many African countries have high levels of unemployment.

Unemployment as a Societal Problem

A social problem is an issue that makes it hard for people in society to achieve their potential. Unemployment is a societal issue in that it causes hardship and suffering within

society. Unemployment causes poverty and hardship within society. When people have no jobs, they have no means of making a living and therefore plunge into poverty. Most people who live below the poverty line are unemployed or have jobs underpaying, way below the minimum wages in most countries. Unemployment also causes social health problems in society. As seen above, poverty is caused by a lack of employment, and therefore individuals do not have enough money to cater to their health needs (Chodorow-Reich et al., 2019). People who have been unemployed for long periods suffer more from preventable chronic conditions than those employed. It also causes mental health issues such as causing depression, which leads the unemployed members of the society to activities such as drug abuse, to deal with the depression.

Unemployment affects family relationships due to the change of behavior roles between parents. Such impacts affect all members of the family, especially children. Parents that are unemployed and have responsibilities tend to be more aggressive, and such anger is often passed on to the children. Unemployment leads to crime, such as stealing, as individuals try and sustain themselves and their families. A good example is the slums in a country like Kenya, where many youths are unemployed and result in joining gangs that terrorize members of the community.

Solutions to Unemployment

The International Labor Organization (ILO) reported in 2016b that over 71 million youths under the age of 24 around the globe suffered from unemployment. The rate of youth unemployment rose to 13 percent. There are potential solutions to the issue of poverty in the world. The solution to the problem is in relation to the cause of the problem. The lack of quality education causes employment in many countries. Therefore, countries need to invest in quality education for their youths and other populations. The research from ILO in 2016 also showed that 40% of employers find it difficult to hire people with the required skills. The world is

changing due to the advancement of technology. Education and skill development should also change as technology changes.

Most countries are still stuck in the old form of education, which does not teach youths the necessary skills to cope with changing technology. The article by Hogberg et al., 2019 shows how education can influence unemployment. According to the study, educational policies influence the well being and unemployment levels among young adults. The researchers argue that such policies mitigate the negative impact of unemployment, and they allow youths to gain opportunities that will help them exit unemployment.

The other solution is through boosting job creation and the demand for labor in countries. Governments should develop action plans that target youth and employment. They should promote incubation enterprise programs and projects that train and hire youths. Educational institutes should also be motivated to do the same through incentives. Employers should also be incentivized to create more entry-level job opportunities to ensure more youths are employed or gain the necessary skills required for employment. Fostering entrepreneurship by creating entrepreneurship symposiums also helps reduce the levels of poverty around the globe. In Sub-Saharan Africa, the Immersion Training Strategy: Targeting Young Marginalized Entrepreneurs (ITS TYME) initiative is an innovative way through which corporations, NGOs, and government agencies take the training of youth entrepreneurs from a classroom setting to the field where the population is found.

Statistical Data

Longe (2017) research shows the problem of unemployment in Nigeria and how the government plays a role in the rising rates. According to the data76% of individual users in the study stated that there was a minimal collaboration between the government educational bodies

and employers, which led to the increase of unemployed graduates. The study also explored remediable approaches to deal with unemployment, depicting a mean score from 4.72 (highest) responses and 4.05 (lowest) and a 2.5 point on the Likert scale. The results denote an efficient way of solving unemployment by coordinating educational institutions and employers and reducing the gap between the supply and demand for labor in the country.

The study by Janlert, Winefield, and Hammarstrom (2015) showed the impact of long-searching used a repeated logistic regression with unemployment as the independent variable and different health measures as the dependent variables. The research used a 95% confidence interval unemployment on the health of individuals. The results showed that 22.1 percent of men were not in good health due to depression related to unemployment, and 25.8% of women were not in good health for similar reasons. Duygan-Bump et al., 2015 also shows how employment was affected by the Great Recession. From their statistical analysis, smaller firms suffered the most due to the lack of financial ability to survive the recession. The study showed the growth rate of assets for firms depending on their External Finance Dependence (EFD). It further compares the characteristics of workers depending on the size of the firm and the EFD levels. The results were that unemployment increased in smaller firms by 3.8 percent compared to 2.5% in large firms. The differential impact of the recession on employment by the firm’s size was found to be economically and statistically significant (.028.020=.008).

The researches provided reliable and credible data on unemployment and the causes of unemployment in countries across the globe. Little though, has been done on knowing how the rates of unemployment in different nations are intertwined. Further research should be carried out to understand why developing nations suffer more from unemployment than developed nations. Research should also be done to reduce the negative impact of unemployment in nations during hard economic times, such as the financial crisis.

Ethical Outcomes

Solutions such as educating youths to help reduce rates of unemployment have positive and negative ethical outcomes. On the positive side, such education equips individuals with required knowledge and skills such as business and work ethics, which lead to the creation of an ethical workforce. However, education may also have ethical concerns as not all students have the cognitive capability to grasp educational material. The question arises whether such a solution would be fair to such individuals and help them get out of unemployment. Collaboration between employers, government, and educational facilities also raises an ethical concern of corruption (Sage, 2019). Corrupt individuals might likely corrupt the system that is trying to get rid of unemployment.

As seen in many countries, government officials, bosses, and directors of companies and businesses are often corrupt. They make the educational solution to unemployment vague as they are willing to employ those that do not have specialized education or skill to perform the task through favoritisms. The outcome increases the level of unemployment and causes youths to lose trust in the set system. It leads to malpractice and negligence in the labor market, pushing nations deeper into unemployment other than fixing the problem.

Conclusion

Unemployment and lack of economic opportunities are a global issue experienced in most countries in the world, both developing and developed countries. It is caused by various factors, such as the mismatch of required skills to unemployed individuals’ skills. The lack of prowess in dealing with new technology also risks an increase in levels of unemployment. Massive unemployment is experienced during economic downturns, such as the financial crisis of 2008. The youths suffer most from the problem of unemployment. Countries must improve

their educational systems and encourage youths to acquire an education if they want to reduce unemployment’s negative impacts. Encouraging and supporting collaboration among different players in the society is also another solution. Unemployment is a social problem that should be taken seriously as it affects the unemployed and society as a whole.

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