FactIncept - Flame up the IDEAS, Incept the FACTS
In
the first month of year 2013, a report released by the International
Labour Organization has predicted the upcoming tough days in relation to
employment and labour markets around the globe. In its annual report
ILO warned that global jobless queue will stretch to more than 200
million people this year. For the last six years this organization is
predicting about unemployment and job across the globe. If its
predictions turn to reality, global unemployment will hit a record.
An UN agency has estimated that, unemployment may rise by 5.1 million this year, and by another 3 million in 2014. In 2012, Global Unemployment has been roused by 4.2 Million, and due to worsening condition of economic insecurity, and lack of policies this situation is going to worsen further in the current year.
Every social misery is pitiful but with unemployment follows poverty, depression, suicide etc. which makes it most miserable. It agonizes you and staunch your thinking capability. A man willing to work, and unable to find work, is perhaps the saddest sight that fortune's inequality exhibits under this sun.
The misery index, which is the sum of inflation and unemployment rates, has increased drastically.
Today, the misery index is nearly back to the level of 1980s. However, the source of the misery is now not inflation, but this time it is the unemployment rate in double digits.
Jane Addams (1910), "Twenty Years at Hull-House" said that-
"Of all the aspects of social misery, nothing is so heartbreaking as unemployment ..."
In 2009, a journal from Wall Street shows the relation of rise in suicide cases with rise of unemployment. This journal reported that historically, suicide attempts in the United States were on rise during tough economic times, esp. when unemployment was high. Yet, link between suicide rate and unemployment is declared unproven by many experts. Though, studies on effects of job-loss lights up many other serious problems. Some of the notable problems evolved from the studies are-
>> Even after 15-20 years of losing job people make 20% less money than compared to those who never lost their job.
>> Health issues mainly related to heart goes on rise due to stress.
>> Unemployment also effects mortality rate and leads to an average loss of life expectancy of 1 – 1.5 years.
>> Interestingly, an unemployed person’s child is 15% more vulnerable in repetition of a grade in school than that of a child of an employed person.
>> Study has also shown that, a child who has experienced his father’s job loss earns 10% less than a child who didn’t.
>> Longer is the time of unemployment, harder the chances of getting employed.
>> A person’s self-confidence and morale is affected dearly by unemployment.
>> Small businesses are unable to cope up with frozen credit markets and less demand by depressed customers.
The worst effects are on youths.
When recession grips economy, there is rise in number of unemployed people and labour market contracts. But, what about youth?
For them, recession forms a vicious circle. Any company which goes for job cuts, targets youths first. This never helps them because after school they go through a transition period till attaining some experience to widen their future scope. After getting fired they are the last ones to be hired. The latest UN World Youth Report launched on 6 February 2012 quotes,
"During economic downturn, young people are often the 'last in' and the 'first out' – the last to be hired, and the first to be dismissed. This issue has particularly severe implications for the school to work transition, the period when young people enter the labour market to look for their first job."
The report also highlights that around globe the youth unemployment rate is higher, which was at 12.6%, than the unemployment rate of adults at 4.8%. The other adverse effect is on the participation of youth in the labour force, which is declining continuously. It results in lack of hope among them with high level of stress.
Is there a cure?
There is no magical cure which can heal it quickly. The easiest can be said that supportive government policies which can recover demand crisis can solve it. But formation and implementation of any policy is a very lengthy and complex process, whose outcome may suite on papers but actual results can be only accessed in real world. Therefore, it can be said as more of a hit and trial method, but the easiest one. Though, the situation during the recession period could have been worse, if the government had not thrown in the right policies like, most central banks lowered their interest rates.
Another policy which Germany, Italy and Japan governments encouraged that, in-spite of firing employees, companies should keep their employees on a less wage and reduced working hour basis. These types of policies are not only effective during recession, but it also works during recovery period, because the hiring costs in future reduce greatly.
Germany recently announced that for the first time, the number of unemployed people had dipped below 3 million, which has been a threshold for them. Much of the credit can be given to such policies.
There are signs of financial reforms, which are now able to support growth and demand. The resolution of weak banks and proper government funding helped it to regain faster.
But on the other side we must also ask that, do we need to increase the attention given to the jobs dimension in economic policymaking? Are targets for employment growth and for balanced growth in incomes needed, the way countries often have targets for inflation and fiscal deficits?
An UN agency has estimated that, unemployment may rise by 5.1 million this year, and by another 3 million in 2014. In 2012, Global Unemployment has been roused by 4.2 Million, and due to worsening condition of economic insecurity, and lack of policies this situation is going to worsen further in the current year.
Every social misery is pitiful but with unemployment follows poverty, depression, suicide etc. which makes it most miserable. It agonizes you and staunch your thinking capability. A man willing to work, and unable to find work, is perhaps the saddest sight that fortune's inequality exhibits under this sun.
The misery index, which is the sum of inflation and unemployment rates, has increased drastically.
Today, the misery index is nearly back to the level of 1980s. However, the source of the misery is now not inflation, but this time it is the unemployment rate in double digits.
Jane Addams (1910), "Twenty Years at Hull-House" said that-
"Of all the aspects of social misery, nothing is so heartbreaking as unemployment ..."
In 2009, a journal from Wall Street shows the relation of rise in suicide cases with rise of unemployment. This journal reported that historically, suicide attempts in the United States were on rise during tough economic times, esp. when unemployment was high. Yet, link between suicide rate and unemployment is declared unproven by many experts. Though, studies on effects of job-loss lights up many other serious problems. Some of the notable problems evolved from the studies are-
>> Even after 15-20 years of losing job people make 20% less money than compared to those who never lost their job.
>> Health issues mainly related to heart goes on rise due to stress.
>> Unemployment also effects mortality rate and leads to an average loss of life expectancy of 1 – 1.5 years.
>> Interestingly, an unemployed person’s child is 15% more vulnerable in repetition of a grade in school than that of a child of an employed person.
>> Study has also shown that, a child who has experienced his father’s job loss earns 10% less than a child who didn’t.
>> Longer is the time of unemployment, harder the chances of getting employed.
>> A person’s self-confidence and morale is affected dearly by unemployment.
>> Small businesses are unable to cope up with frozen credit markets and less demand by depressed customers.
The worst effects are on youths.
When recession grips economy, there is rise in number of unemployed people and labour market contracts. But, what about youth?
For them, recession forms a vicious circle. Any company which goes for job cuts, targets youths first. This never helps them because after school they go through a transition period till attaining some experience to widen their future scope. After getting fired they are the last ones to be hired. The latest UN World Youth Report launched on 6 February 2012 quotes,
"During economic downturn, young people are often the 'last in' and the 'first out' – the last to be hired, and the first to be dismissed. This issue has particularly severe implications for the school to work transition, the period when young people enter the labour market to look for their first job."
The report also highlights that around globe the youth unemployment rate is higher, which was at 12.6%, than the unemployment rate of adults at 4.8%. The other adverse effect is on the participation of youth in the labour force, which is declining continuously. It results in lack of hope among them with high level of stress.
Is there a cure?There is no magical cure which can heal it quickly. The easiest can be said that supportive government policies which can recover demand crisis can solve it. But formation and implementation of any policy is a very lengthy and complex process, whose outcome may suite on papers but actual results can be only accessed in real world. Therefore, it can be said as more of a hit and trial method, but the easiest one. Though, the situation during the recession period could have been worse, if the government had not thrown in the right policies like, most central banks lowered their interest rates.
Another policy which Germany, Italy and Japan governments encouraged that, in-spite of firing employees, companies should keep their employees on a less wage and reduced working hour basis. These types of policies are not only effective during recession, but it also works during recovery period, because the hiring costs in future reduce greatly.
Germany recently announced that for the first time, the number of unemployed people had dipped below 3 million, which has been a threshold for them. Much of the credit can be given to such policies.
There are signs of financial reforms, which are now able to support growth and demand. The resolution of weak banks and proper government funding helped it to regain faster.
But on the other side we must also ask that, do we need to increase the attention given to the jobs dimension in economic policymaking? Are targets for employment growth and for balanced growth in incomes needed, the way countries often have targets for inflation and fiscal deficits?
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