ONG, CHRISTINE JOYCE P.

2013121206

AR172/AR3

SOCIO-ECONOMIC ISSUE: UNEMPLOYMENTWHAT IS UNEMPLOYMENT?

Unemployment occurs when a person who is actively searching for employment is unable to find work. Unemployment is often used as a measure of the health of the economy. The most frequently cited measure of unemployment is the unemployment rate. This is the number of unemployed persons divided by the number of people in the labor force.

DEFINITION OF TERMS:

1. EMPLOYED

actually working at a job, even if part-time

2. UNEMPLOYED

Being involuntarily out of work

Not working, but looking for work or awaiting a scheduled recall from a temporary layoff

People who are jobless, looking for jobs, and available for work.

3. UNEMPLOYMENT

Defined as the number of people without jobs who are actively seeking work.

4. UNDEREMPLOYMENT

workers that are highly skilled but working in low paying jobs workers that are highly skilled but work in low skill jobs Part-time workers that would prefer to be full-time.

TYPES OF UNEMPLOYMENT

1. Fractional Unemployment

is always present in the economy, resulting from temporary transitions made by workers and employers or from workers and employers having inconsistent or incomplete information. This type of unemployment is closely related to structural unemployment due to its dependence on the dynamics of the economy. It is caused because unemployed workers may not always take the first job offer they receive because of the wages and necessary skills. This type of unemployment is also caused by failing firms, poor job performance, or obsolete skills. This may also be caused by workers who will quit their jobs in order to move to different parts of the country.

2. Structural Unemployment

Structural Unemployment, one of the three types of unemployment, is associated with the mismatch of jobs and workers due to the lack of skills or simply the wrong area

desired for work. Structural unemployment depends on the social needs of the economy and dynamic changes in the economy.

3. Seasonal Unemployment

Occurs when people are unemployed at certain times of the year, because they work in industries where they are not needed all year round. Examples of industries where demand, production and employment are seasonal include tourism and leisure, farming, construction and retailing.

4. Cyclical Unemployment

Unemployment that is attributed to economic contraction is called cyclical unemployment. The economy has the capacity to create jobs which increases economic growth. Therefore, an expanding economy typically has lower levels of unemployment. On the other hand, according to cyclical unemployment an economy that is in a recession faces higher levels of unemployment.

5. Technological Unemployed

This can be seen where firms use capital investment in technology to reduce their reliance on unskilled or semi-skilled labor.

Unemployment primarily caused by technological change. Early concern about technological unemployment was exemplified by the Luddites, textile workers who feared that automated looms would allow more productivity with fewer workers, leading to mass unemployment.

6. Residual Unemployment

Some of the people will not even be capable of holding permanent job by virtue of some physical or mental disability

CAUSES OF UNEMPLOYMENT

Over supply of labor force on popular careers

Lack of quality graduates

Inability to take on available jobs or seize opportunities

Apparently clueless job applicants

Discrimination and unreasonable job requirements

Overpopulation

Lack of available jobs

Job mismatch

EFFECTS OF UNEMPLOYMENT

A. INDIVIDUAL

individuals are unable to earn money to meet financial obligations

Failure to pay mortgage payments or to pay rent may lead to homelessness through foreclosure or eviction

Increases susceptibility to cardiovascular disease, somatization, anxiety, depression, and suicide.

unemployed people have higher rates of medication use, poor diet, physician visits, tobacco smoking, alcoholic beverage consumption, drug use, and lower rates of exercise

social responsibilities may push unemployed workers to take jobs that do not fit their skills or allow them to use their talents

B. SOCIO - ECONOMIC

An economy with high unemployment is not using all of the resources, specifically labor, available to it.

Workers can lose their skills, causing a loss of human capital. Encourage xenophobia and protectionism as workers fear that

foreigners are stealing their jobs. Social problems such as crime; if people have less disposable

income than before, it is very likely that crime levels within the economy will increase.

Malnutrition of people Increases the number of gamblers Increase in Poverty Rate Increase in illiteracy Decrease in standard of living Declines economic growth

BENEFITS OF UNEMPLOYMENT

People are available for hire, without being headhunted away from their existing employers.

permits new and old businesses to take on staff

Workers who are laid off may have access to benefits that make up for part or all of the income they lost for a certain amount of time. Some companies offer severance packages to workers they lay off, which can include pay and benefits, often based on the amount of time the worker has been with the company.

They can have lots of free time to spend

UNEMPLOYMENT RATE IN THE PHILIPPINES

KEY PLAYERS

DOLE (Department Of Labor and Employment)

POEA (Philippine Overseas Employment Administration)

TESDA (Technical Education and Skills Development Authority)

CHED (Commission on Higher Education)

NGO (Non-Government Organizations)

SOLUTIONS

Reduction of employment discrimination

Proper educational advice to college students in terms of job demands and skill required to get job faster

Higher level of initial education so that workers are more flexible and able to adjust when condition changes.

Providing facilities for the retaining of workers whose skills are no longer in demand

stabilization policies and government policies intended to maintain full employment

encourage performance related pay