We dedicate this research report to our parents, to whom we owe everything that life has given us And to our inspirational instructor,… Without whose guidance and encouragement all this would not have been possible.
The Historical Perspective
Causes of Unemployment
Impacts on Pakistani Society
• ‘The unavailability of jobs for the inhabitants of a society is called unemployment’. • In economics‘One who is willing to work at a prevailing wage rate yet is unable to find a paying job is considered to be unemployed’.
TYPES OF UNEMPLOYMENT
There are seven main types of unemployment.
When there is not enough aggregate demand for the labor.
When moving from one job to another, the unemployment temporarily experienced when looking for a new job. 3. STRUCTURAL
Experienced when the structure of an industry or skill demands changes in mainly: 1. Switching from a declining industry to a rapidly growing one. 2. Pace of change in the tastes of people.
3. Regional structure of industry.
Caused by the replacement of workers by machines or other advanced technology. 5. CLASSICAL
When real wage for a job are set above the market-clearing level, commonly government (as with the minimum wage) or unions, although some (such as Murray Roth bard,) suggest that even social taboos can prevent wages from falling to the market clearing level. 6. MARXIAN
When unemployment is needed to motivate workers to work hard and to keep wages down, to preserve profitability. 7. SEASONAL
When an industry only is in demand certain times. For example, construction work, certain segments of agriculture, ski slopes, shopping mall Santas, and snow plow services.
CATEGORIES OF UNEMPLOYMENT
1. Unemployment of unskilled or semi-skilled.
2. Rural unemployment.
3. Unemployment of educated young. Unemployment of women. 4. Industrial unemployment
5. Temporary or seasonal unemployment.
THE HISTORICAL PERSPECTIVE
The Historical perspective on unemployment is very interesting. In fact, it has at times been called one of the causes of the collapse of Roman Empire. This shows that the issue is not new to mankind. But for a third world country like Pakistan, the perspective is even more interesting. When Pakistan was made in 1947, the country had not much of an industrial infrastructure and agriculture was the back bone of the economy. More than 70% of the population was associated with agriculture. But as time went on a few major problems started taking heavy toll. ← The Exponential Increase in population. As is the case with most third world countries, Pakistan’s population increased to the extent of rendering its resources short. There were not enough jobs being created and the population was increasing continuously. ← Bulk of the labor force of the country was unskilled labor. Most of the jobs available were for some type of skilled labor, and only a very small fraction of the unskilled labor got job and the rest stayed unemployed. ← The Mechanization of most industrial units left a huge number of people jobless. Where 10 men used to work, a machine was placed with one skilled operator. This further exacerbated the problem of a huge unskilled labor. But in the meanwhile there were some good moments as well, where the employment rate improved. Much of this was seen in the seventies and early eighties. This was the time of the “Gulf Employment”. During this period, huge resources of oil were discovered over much of the Gulf. The gulf countries needed some cheap and roughly skilled labor to...
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