Unemployment is one of a major issue in our country . Because
when unemployment is high ,resources are wasted and people’s income are
depressed. Even different developing countries are also facing it but in
Pakistan ,the situation is more serious .
Each year there are about 8 lac new jobs candidates are added
into the labor force in Pakistan. Main problem is to generate employment
opportunities for these new candidates during unemployment , economic distress
also effect people’s emotions and foundy lives.
Causes of unemployment in pakistan:
In Pakistan ,the concept of employer and employees working
together in close cooperation to ensure productivity ,profitability and growth of
business and security of employment is not existed .
The major causes by which unemployment is gripping on our
country are :
1. Political dominancy and lack of political infrastructure
2. Lack of job opportunities
3. Lack of interest in technical education
4. Illiteracy
5. Education just for the sake of education,not for purpose
6. Transferring of rural labor to towns
7. Child labor
8. Double standards in the implementation of the merit policy
9. Youth focuses of an unrealistic and not beneficial careers.They only wants white collar jobs
10. Lack of resources of industry
11. Employment rights ,security issues and lack of employee needs satisfaction
2. Lack of job opportunities
3. Lack of interest in technical education
4. Illiteracy
5. Education just for the sake of education,not for purpose
6. Transferring of rural labor to towns
7. Child labor
8. Double standards in the implementation of the merit policy
9. Youth focuses of an unrealistic and not beneficial careers.They only wants white collar jobs
10. Lack of resources of industry
11. Employment rights ,security issues and lack of employee needs satisfaction
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Facts and Figures:
Unemployment Rate in Pakistan 2014-2015
Basically unemployment rate identifies the number of people in percentage which are looking for any job or lively hood as compared to the entire labor force percentage in the state. There are various institutions which calculate this rate according to the consensus, which is being done in every quarter of the fiscal year in Pakistan. The most reliable institution which is accountable for calculating the unemployment rate in Pakistan is the Pakistan Bureau of Statistics. The unemployment rate in Pakistan for the year 2014-2015 is 6 percent. It was 6.30 percent at the start of the second quarter of the fiscal year but at the latter half of the second quarter it declined by 0.30 percent and currently the unemployment rate in Pakistan as per the report of the Pakistan Bureau of Statistics is 6.0 percent.
There is a continuous variation in the unemployment rate in Pakistan, and unfortunately Pakistan is still considered to be one of those countries which have the highest rate of unemployment including both males and females. There are various tenures in which the unemployment rate is increased abnormally due to any internal or external factor, as in the year 2002 the unemployment rate in Pakistan was raised to an all time high percentage which was 7.8 percent while on the hand in the year 1987 in the month of December the unemployment rate of Pakistan was being recorded as the all time lowest which was just 3.1 percent. For the tenure starting from the year 1985 till the year 2014-15 the average unemployment rate in Pakistan is being recorded as 5.4 percent.
There are so many reasons and factors which have contributed in the raise of the unemployment rate in the country and amongst these factors the one reason which is on the top of the list is the power and energy crisis. Due to the threatening energy crisis through which Pakistan is going through has forcefully shut hundreds of industries and mills form Pakistan, which have left millions of people unemployed and jobless. The category of people which are uneducated and unskilled, are going through the most miserable phase in Pakistan. On the other hand the dreadful conditions of law and order has further damaged the national interest as due to excessive terrorism in the state the international investors are unwilling to invest in Pakistan which has immensely reduced the job opportunities for thousands of people and ultimately the unemployment rate in the state is continuously increasing.
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Kinds of
unemployment:
voluntary unemployment:
unemployment that result when resources which are willing and
able to engage in production choose not to produce output.
Involuntary unemployment:
The contrast to voluntary unemployment is involuntary
unemployment it also known as forced unemployment
Cyclical unemployment:
Unemployment
that is created because ,there is not enough aggregate demand for the labor.
Labor demand
<labor supply
This happen
because the consumption decrease so production needs to be lower that’s why
companies or industries requires less labor and there remaining will be
unemployment.
Disguised unemployment :
When more people engage in some activity then the number of
person required for that ,this is called disguised unemployment.
Structural unemployment:
This unemployment arises to the structural changes in dynamic
economy .unemployment caused by massive mismatch of skills or graphic location
is noted as structural unemployment.
Seasonal
unemployment :
There are certain industries for those the demand for their
product is seasonal or their production is seasonal so workers are employed in
one season and unemployed in second season.
Frictional
unemployment :
When a worker is shift from one job to another the time that
he invest in finding new job and remain unemployed is said to be frictional
unemployment .so this is a temporary unemployment frictional unemployment is
created because workers skills can mismatched with the new jobs so that
unemployment is structural unemployment.
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Unemployment & Find a jobs
INFLATION, UNEMPLOYMENT AND PHILIPS CURVE
• Macroeconomic policies are implemented in
order to achieve government’s main objectives of full employment and stable
economy through low inflation. We can use Philips Curve as a tool to explain
the trade-off between these two objectives.
• Philips Curve describes the
relationship between inflation and unemployment in an economy.
• You already know that the Inflation is
defined by increase in the average price level of goods and services over time.
• When there is inflation, value of money falls. A low inflation rate indicates that average price of goods would not rise as high.
• Unemployment exist when someone is
actively seeking for job but unable to find any despite their willingness to
accept the going market wage rate . New Zealand-born economist A.W Philips
first put this theory forward in 1958 gathered the data of unemployment and
changes in wage levels in the UK from 1861 to 1957. He observed that one stable
curve represents the trade-off between inflation and unemployment and they are
inversely/negatively related. In other words, if unemployment decreases,
inflation will increase, and vice versa. Macroeconomics 102 The original
Philips Curve: wage inflation against unemployment Inflation (%) Unemployment
• For example, after the economy has
just been in recession, the unemployment level will be fairly high. This will
mean that there is a labor surplus.
• As the economy
has just started growing, the aggregate demand (AD) will increase and therefore
leading to an increase in employment. In the beginning, there will be little
pressure for a raise in wages. However, as the economy grows faster and more
people are employed, wages will start rising slowly.
• This will increase
the firm’s cost of production and the high costs are usually passed on to the
customers in the form of higher prices. Therefore a decrease in unemployment
has led to an increase in inflation and vice versa.
• Not only that, unemployed might suffer from
money illusion as they thought the increase in wages offered to them
represented a real wage (Sloman 2000). They underestimate inflation by not
realizing that higher wages will be eaten up by higher prices. Thus they will
accept job more readily and this will reduce the frictional unemployment in
the short run. Macroeconomics 102 The relationship we discussed above is a
phenomenon in the short-run. But in the long run, since unemployment always
returns to its natural rate (unemployment rate at which GDP at its
full-employment level that is, with no cyclical unemployment…. there is no such
trade-off.
• When unemployment
rate is below natural rate, GDP is greater than potential output – Economy’s
self-correcting mechanism will then create inflation
• When unemployment rate is above natural
rate, GDP is below potential output – Self-correcting mechanism will then put
downward pressure on price level] Using the data from the 1950s and 1960s where
the world economy tend to be stable, Philips Curve relationship proved to be
true for many economies such as United States and UK (Griffiths and Wall,
1999). However, during 1967-1970 most countries such as US, Britain and France
had doubled their inflation (Ormerod, 1995). This was the first sign that the
downward relationship in Philips Curve was not always true. In 70’s the concept
of a stable Philips Curve shows a break down as the economy suffered from both
high inflation and high unemployment simultaneously. The economists refer this
kind of situation as stagflation where stagnant economies and rising inflation
occurs together.
Youth UNEMPLOYMENT in Pakistan
Workless people can always be dangerous to a
country’s security
.
• The frustrated youth of the country is falling a prey to drugaddiction,
violence, theft, and many other social evils. Smugglers, drug-traffickers and
terrorists are engaging them in heinous activities.
• A
Working Definition of Unemployment: “People able, available and willing to find
work and actively seeking work – but not employed”
·
The unemployment
rate in urban areas of Pakistan increased by 2% to 10.1%, whereas, the unemployment
rate in rural areas increased from 4.3% to 5%.v Recently, the
unemployment rate of Pakistan increased to 6.5% and so it can be said that one
out of every 10 people of the country are suffering from unemployment. v Unemployment is one
of the major issues confronted by our youth today. Every year many new
graduates are added into the labor force but few of them get very good jobs;
some others get a reasonable one but many keep on looking for jobs for a long
time.
·
Not only educated people
of Pakistan, but also the labor class is going through a rough phase and their
daily life has become a living hell for themv You will find so many
graduates, master students, engineers and people of every profession being
wasted due to unstable employment system in Pakistan v According to Economic
Survey of 2010-11, population of Pakistan is 177.1 million. Total labor force
is about 54.92 million out of which 51.87 million is employed and remaining
3.05 million is unemployed. Rate of male unemployment is 5.6 % and female
unemployment is 9.3 %
.
many cases of suicides because of unemployment
The causes are endless
and countless. But the major causes of unemployment in Pakistan are as follows:
1. Economic Causes
2. Social Causes
3. Financial Causes
ECONOMIC CAUSES
• Low Industrial
Growth Rate Low industrial growth rate is 1.7 % in Pakistan. Number of
industries is not increasing in Pakistan. Lack of industries means less opportunities
of employment.
• Mechanization of
Agriculture Due to mechanization of agriculture there is less use of labor in
agricultural sector. These unemployed persons move to cities to find jobs at
less wage rate. Accordingly, use of modern techniques in agricultural sector is
also a further cause of unemployment and under employment
Reduction in Foreign
Employment Due to illiteracy, ill training and lack of skill & efficiency
demand for our labor in foreign market is decreasing. It also creates problem
of unemployment.
• Use of Advanced Technology A poor country uses
backward techniques of production and labor intensive technologies. But when it
uses the advanced technology there spread more unemployment in the country
SOCIAL CAUSES •
High Population Growth
Rate The population of Pakistan is increasing at a rate of 2.1 %. Due to this
high rate about two million people enter into the labor market each year.
• Illiteracy & Literacy Illiteracy and literacy both are the
causes of unemployment in Pakistan. Due to Illiteracy people are not able to
work and they remain unemployed. On the other hand number of educated is
increasing annually but government is unable to create employment opportunities
e.g., students of B. Com. are increasing at very fast speed but they cannot
find jobs and admissions for higher education. Rate of illiteracy in Pakistan
is 42.3 %.
• Follow New Trend of
Education Students are that whenever there comes a new trend or a new
technology, then everyone follows to study that specific subject only rather
than differentiating themselves they all follow the same pattern. Later, when
there are only 5-10 vacancies of that specific field the number of graduates of
that field are in thousands. • Under Govt. Educational Institutions Around 80%
of the educational institutions in Pakistan are under government. So, our
educational and technical institutions do not equip the students properly to
suit international and at times even local markets.
 Lack of Confidence in Educated Persons A student may have a master’s degree ,but when he walks into an office for his interview, he lacks the confidence to carry himself for a formal conversation and in the end so many students of this type are rejected and left unemployed!
Political Instability There is political
instability in Pakistan, which creates less attraction for foreign investment.
Due to political instability investor hesitates to invest.
Afghan Refugees They create a bad effect on
our labor market. They are ready to work more at less wage rate.v Rural-Urban Migration
Pakistan an agricultural based economy, is currently undergoing the process of
mechanization. Labor is being replaced by machines, creating unemployment in
rural areas. Lack of Technical Education Today, literacy rate is 57.7 %. Number
of students of every field especially of commerce, are so large but employment
opportunities for them are few.
Nepotism and Favoritism It means selection
according to relation, language, caste, sects not according to ability. Here
deserving candidates do not get jobs and remain unemployed or under employed.
Re-employment Re-employment of higher rank
civil and especially armed forces officers has decline the jobs for qualified
young men in Pakistan
Law and order situation of Karachi Karachi is
the biggest and an ideal place in terms of industrial base of Pakistan. Sadly,
investors are not willing to invest in Karachi due to violence that has taken
over Karachi in the past few years
FINANCIAL CAUSES
• Lack of Credit Facilities It is so difficult
to manage the personal business and selfemployment due to absence of easy
credit facilities. Accordingly, shortage of credit facilities is also a main
cause of unemployment
• Deficiency of
Capital There is shortage of capital that leads to low level of saving and
investment in Pakistan. It results in low rate of capital formation and caused
in unemployment
 STEPS OF GOVERNMENT OF PAKISTAN AGAINST UNEMPLOYMENT
• SMEDA (SMALL AND
MEDIUM ENTERPRISES DEVELOPMENT) SMEDA provides loans to the deserving persons
to establishment of Small and Medium industries.
• SKILL DEVELOPMENT
COUNCILS Skill Development Council is play vital rule to educate the people who
desired to improved their technical qualification in industrial and other
organizations.
• OVERSEAS EMPLOYMENT
CORPORATION (OEC) Overseas Employment Corporation (OEC)was established in 1976
by Govt. of Pakistan and is only employment promotion agency operating in
public sector. During 37 years, sending more than 135,000 workers to 55
different countries across the world.
NATIONAL INTERNSHIP
PROGRAM (NIP) The educated youth of Federal Regions (ICT, FATA, GILGIT,
BALTISTAN, and AJK), along with monthly stipend of Rs. 10,000/-.v PRIME MINISTER’S
YOUTH PROGRAM
The following Six
Schemes are being launched Prime Minister’s Scheme Loan per person Candidat es
Budg All PM’s Qarz-e-Hasna Scheme 25,000 250,000 3.5 Billion PM’s Small
Business Loan Scheme 0.5 to 2.0 M 100,000 5 Billion PM’s Youth Skill
Development Scheme 3,000/ six months 25,000 800 M PM’s Scheme for provision of
Laptop 40,000/ laptop 100,000 4.0 Billion 30,000 1.2 Billion PM’s Scheme for
Reimbursement of Fee of 40,000 Tuition Students from the Less Developed Areas
fee / years
circular flow of economy durind poverty:  RECOMMENDATIONS:
• Establishment of
Employment Offices There is not any single office for the information about
employment opportunities in Pakistan. More and more employment offices should
be established these would cause in reduction in unemployment
• Population Control
Fast growth rate of population should be controlled. Due to population control
there will be more employment opportunities and reduction in unemployment
• Growth of Industrial Sector Government should
provide basic infrastructure to established industries is rural areas. Growth
of industrial sector is needed to reduce unemployment.
• Reduction in
Retirement Period Retirement age is 60 years in Pakistan. It should be reduce
to 55 years to provide more employment opportunities .
Subsidies to Private Sector Stable government
is required to subsidize the private sector. Government should help the private
sector to development. It will create more employment chances.
• Job on Merit
Government should eliminate the nepotism and favoritism. Employment opportunities
should be provided in accordance to skill and ability.
Economic Growth Govt. should make efforts to
push economic growth process. For this purpose Economic Revival Package should
announce for the revival of industries sector, to stimulate production and
investment
Fiscal and Monitory Policies Beside this a
number of fiscal and monetary measures should take to attract industrialists
and particularly foreign investment. • Export more than import Government needs
to motivate people to export more than import through broadening the tax base
and by lowering down the tariff plans.
Foreign Investment The government need to make
such policies that attracts foreign investment in our country which will lead
to more job opportunities.
Conclusion:
We conclude that there are two major elements, which can reduce
the unemployment i. e., use of labor intensive industries and adoption of
self-reliance policy. Progress and prosperity is impossible without the
reduction in unemployment.v In conclusion,
another erupting challenge standing before Pakistan is wide-spread unemployment.
Thousands of educated graduates are jobless. Hundreds of thousands of
unemployed workers are forced to lead their lives below their status. Large
scale unemployment has serious effects on the country’s production also.
Moreover, the country’s population has drastically increased during recent
years. Therefore, every step taken to improve the living standard of common man
proves to be futile and ineffective.
Suggestion To Reduce Unemployment:
following are some suggestion to reduce unemploymnt from country:
1.
Change
in industrial technique:
Production technique should
suit needs and means of the country .Its is essential that labour intensive
technology should be encouraged in place of capital intensive technology.
2.
Policy
regarding seasonal unemployment:
Seasonal unemployment is found in agriculture
sector and agro based industries.
To
remove it:
(a) Agriculture
should have multiple cropping,
(b) Plantations,
horticulture, dairying and animal husbandry should be encouraged,
(c) Cottage
industries should be encouraged
3.
Change
in education system:
Educationalpattern
should be completely changed .students who have likely for higher studies
should be admitted in college ad universities .Emphasis should be given on
vocational education.Qualified engineers should start their on small units.
4.Expansion of Emploment exchanges:
More employment
exchangeshould be opened.information regarding employment opportunities should
be given to people.
6. full and more productive employment:
The main objective of
country’employment policy should be to increase employment opportunities and
productivity of labour .govt. should adopt apolicy that provides employment to
all people.
7. increase
in production:
To increase employment, it is essential to
increase production in agriculture and industrial sector .Development of small
and cottage industries should be encouraged.
8.
More important to employment programmmes:
In five years plan more importance should be given
to employment .the programmes like irrigation ,roads ,flood control, power,
agriculture, rural electrification can provide better employment to people
9.
High rate of capital formation :
Rate of capital formation in the country should be
accelerated .capital formation should be particularly encouraged in such
activities which generate greater
employment opportunities. Capital output ratio should be kept low.
10.
industries in cooperative sector:
Industries
in cooperative sector should be encouraged. Kerala Govt.’ setup a textile mill
covering 600 unemployed persons on co-operative basis .This is a novel approach
to fight against unemployment.Different State
Govt.should take necessary steps
in this direction.
11. Decentralization of
industrial activity:
Decentralization
of industrial activity is necessary to reduce unemploymen. If industrial
activities are centralized at one place , there ill be less employment
opportunities in the under developed areas .So Govt. should adopt such policies
which encourage decentralization of industrial activity.
12. population control:
The growth of population
should be checked in order to solve unemployment problem .family planning
programme should be implemented widely and effectively .
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