8/21/2020 ASSIGNMENT NO:1

What is unemployment? What are the causes and types of

unemployment? How to avoid unemployment?

IBRAR ULLAH
ROLLNO:301
SUBMITTED TO: DOCTOR KHURRAM NAWAZ
What Is Unemployment?
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Unemployment iis idefined ias ia isituation iwhere isomeone iof iworking iage iis inot iable ito iget ia ijob
ibut iwould ilike ito ibe iin ifull-time iemployment. i

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Unemployment iis iwhen isomeone icould iwork iand iwants ito iwork ibut iis iunable ito ifind ia isuitable
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Explanitation:
Unemployment iis ia ikey ieconomic iindicator ibecause iit isignals ithe iability i(or iinability) iof iworkers
ito ireadily iobtain igainful iwork ito icontribute ito ithe iproductive ioutput iof ithe ieconomy. iMore

iunemployed iworkers imean iless itotal ieconomic iproduction iwill itake iplace ithan imight ihave

iotherwise. iAnd iunlike iidle icapital, iunemployed iworkers istill ineed ito imaintain iat ileast

isubsistence iconsumption iduring itheir iperiod iof iunemployment. iThis imeans ian ieconomy iwith

ihigh iunemployment ihas ilower ioutput iwithout ia iproportional idecline iin ithe ineed ifor ibasic

iconsumption. iHigh, ipersistent iunemployment ican isignal iserious idistress iin ian ieconomy iand

ieven ilead ito isocial iand ipolitical iupheaval. iConversely, ia ilow iunemployment irate imeans ithat ithe

ieconomy iis imore ilikely ito ibe iproducing inear iits ifull icapacity, imaximizing ioutput, iand idriving

iwage igrowth iand iraising iliving istandards iover itime. iHowever, iextremely ilow iunemployment ican

ialso ibe ia icautionary isign iof ian ioverheating ieconomy, iinflationary ipressures, iand itight iconditions

ifor ibusinesses iin ineed iof iadditional iworkers.

While ithe idefinition iof iunemployment iis iclear, ieconomists idivide iunemployment iinto imany
idifferent icategories. iThe itwo ibroadest icategories iof iunemployment iare ivoluntary iand

iinvoluntary iunemployment. iWhen iunemployment iis ivoluntary, iit imeans ithat ia iperson ihas ileft

ihis ijob iwillingly iin isearch iof iother iemployment. iWhen iit iis iinvoluntary, iit imeans ithat ia iperson

ihas ibeen ifired ior ilaid ioff iand imust inow ilook ifor ianother ijob. iThe icoronavirus ipandemic iaffecting

ithe iU.S. iand ithe iworld iin i2020, ifor iexample, iis icausing imassive ilevels iof iinvoluntary

iunemployment

Types of Unemployment i i

1. Structural Unemployment
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This iform iof iunemployment iis ilargely idefined ias iunemployment ithat iresults ifrom iperceived
i value iand iskills ithat ian iindividual ibrings ito ia ijob iagainst ithe ineeded, idifferent iskills irequired iby
i an iemployer ito ido ithe ijob icorrectly.
Job iskills iare, iafter iall, idynamic, iand iover itime inew iskills ireplace icurrent ibut iaging iskills ino ilonger
i needed iby ian iemployer. iThese inewer iskills iare irequired iby iemployers ito isucceed iin ithe
i marketplace.

Consider ian iauto ibrake ipad imanufacturer ithat isupplies ibrake ipads iand icomponents ito
i automobile imanufacturers, iauto iparts istores iand icar irepair ibusinesses. iIn ithe ipast i10 iyears,
i robotics ihas iadvanced ithe iperformance iof ibrake ipad iproduction iand iinstallation, ito ithe ipoint
i where ithe ineed ifor ihuman ibrake ipad ispecialists iaren't ias inecessary ias ithey iused ito ibe. iThat
i definitely ihurts ithe ijob iprospects ifor ilong-time ibrake ipad imakers.

Yet icorrespondingly, ithat isame ibrake ipad imanufacturer, inow ipresumably iproducing
i components iat ia ifaster iand iless iexpensive iclip, isees isales irise, iand inow ineeds iemployees iwith
i different ibut inow inecessary iskills i- ithink isales iand imarketing iprofessionals, icustomer iservice
i representatives, iand itechnology ispecialists ito icreate, imaintain, iand irepair ithose iautomated
i break ipad imanufacturing isystems.

In ithis iscenario, istructural iunemployment ifor ithe imanufacturing iline ioperator igoes iup, iwhile ithe
i unemployment ifigure ifor itechnology ispecialists iand isales iprofessionals igoes idown, ias idemand
i for itheir iservices irises.

2. Cyclical Unemployment
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Cyclical iunemployment iis isimilar ito istructural iunemployment iin ithat ithe ibusiness icycle iis ihighly
i dynamic itoo, iand ichanges iall ithe itime. iWhen ithe ieconomy iis ion ithe iupswing, icompanies ihire
i more iworkers, iand ithe iunemployment irate ispikes iupward. iConversely, iwhen ithe ieconomy iis
i spiraling idownward, ithe iunemployment irises, ias icompanies ilet iworkers igo, iand istop ihiring iat ian
i accelerated irate, ias ithey iwould iin irobust ieconomic iperiods.

Consider ithe icase iof iauto imanufacturers iin ithe iGreat iDepression, iin ithe ilate i1920's iand iearly
i 1930's. iBefore ithe istock imarket icrash iof i1929, iand iresulting idepression, iAmericans iwere ibuying
i autos ifrom icompanies ilike iFord iMotor iCo. i(F) i- iGet iReport i, iChrysler i(FCAU) i- iGet iReport iand
i General iMotors i(GM) i- iGet iReport iat ia ihigh irate. iThey icould iafford ito ido iso, ias ithe iAmerican
i middle iclass iwas ijust istarting ito ijell, iand iearning igood imoney iin iboom ieconomic itimes.
 But ionce ithe iGreat iDepression ihit, iAmericans ifocused imore ion ikeeping ifood ion ithe itable iand
i bypassed ilarge iexpenditures ilike inew icars. iThat islashed irevenues iat ithe imajor icar icompanies,
i who icut iworkforce inumbers, islowed ior istopped ihiring ialtogether, iand iin ithe iprocess, isent ithe
i unemployment irate iskyrocketing.

It iwas ionly iafter ithe iWorld iWar iII ithat ithe iU.S. ieconomy irecovered, iand imillions iof iAmericans
i flooded iauto idealerships ito ibuy icars iand itrucks, iputting ithousands iof iauto iworkers iback ito
i work.

3. Frictional Unemployment
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Short-term ifactors iinvolved iin ifiguring iout ithe ination's iunemployment irate ifall iunder ithe iterm
i "frictional iunemployment."

This iform iof iunemployment irelates ito ithe ijobless irate ithat imoves iupward ias icareer
i professionals idrift ibetween ijobs ifor ia ivariety iof ireasons, iincluding:

• Workers iwho imove ito ianother istate, icity, ior itown iand iare ilooking ifor ia inew ijob.
• Workers iwho ileave itheir ijobs iwith ia igoal iof ifinding ia ibetter ione.
• College igraduates iwith iadvanced idegrees iwho, iafter iearning ia ipost-graduate idegree, ireturn ito
i the iworkforce iwhen ithey ifind ia inew ijob irelated ito itheir istudies.
Consider ia icollege igraduate iwho's ispent ia ifew iyears iafter igraduation iworking iat ia ifinancial
i services icompany ias ia idata ianalyst. iBut ithat icollege igraduate istarts ihearing imore iabout iartificial
i intelligence iand iafter idoing isome iresearch, idecides ithat's ithe ifield ifor ihim. iConsequently, ihe
i takes itwo iyears iaway ifrom ithe iworkforce ito iearn ia imaster's idegree iin iscience iand itechnology,
i specializing iin iartificial iintelligence.

The itime ispent ibetween ihis ilast ijob ias ia iWall iStreet idata ianalyst iand ihis inew ijob ias ian iartificial
i intelligence iproduct ideveloper i is ideemed ito i represent ifrictional i unemployment.
Since ifull ifrictional iunemployment inever igoes iaway, iit ihas ito ibe ifactored iinto ithe inational
i unemployment iequation. iTime, ilike imoney ior idiamonds, iis ia icommodity, itoo i- iand itaking itime
i between ijobs ito iget iback iinto ithe iworkforce imakes ifrictional iunemployment ia ikey icomponent
i of ithe iU.S. iunemployment ipicture.
4. Seasonal unemployment
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Specific iindustries imay ionly ibe iopen ifor ibusiness iat ia ispecific iperiod iduring ithe icalendar iyear
i (think ia iChristmas itree iseller ioperating iout iof ia imall iparking ilot, ian iice icream ishop iby ithe ibeach
i that icloses idown iafter iLabor iDay, ior, ion ia ilarger iscale, ian iIowa ifarm ithat iproduces icorn
i seasonally.) iUnemployment ifor iseasonal iindustries irises iin ioff-peak iperiods, iand ithe iU.S.
i unemployment inumbers ireflect ithat iseasonality iissue iin itheir imonthly inumbers.

4. Regional unemployment
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Regional ior ieven istate-by-state iunemployment iis ia ibig iissue, ias iwell. iAgricultural, ifishing,
i tourism, iand iother iindustries iare idependent ion itheir igeographical iboundaries, ithe iweather, iand
i consumer idemand. iNo idoubt, iSouthern iFlorida isees ia idrop ioff ifrom itourists iafter imid-April,
i when ithe iweather istarts iimproving iin iNorthern istates. iThat ileads ito ia idrop-off iin idemand ifor iin-
season iworkers, iand ia ihigher iunemployment irate ifor iregional iemployees.

Causes of Unemployment
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The iterm iunemployment iis iused ito idescribe ianyone iwho iis iable ito iwork, ibut idoesn’t ihave ian
ioccupation. iUnemployment iis ione iof ithe imost icommon iand ichronic iproblems iworldwide. iIt iis ia

iconcern ifor iindividuals ias iwell ias iglobal icommunities. iUnemployment iis iexpressed ias

ipercentage iof ithe itotal iavailable iwork iforce ithat iis iunemployed, ibut iactively iseeking

iemployment iand iwilling ito iwork iwhich iis iknown ias ithe iunemployment irate. i(>>>>>>>>>>>) iThe

iBahrain’s iunemployment irate ihas idropped ifrom ian iestimated iaverage iof i16.4 ipercent iin i2006 ito

i3.7 ipercent iin i2010 i(Minister iof iLabour iDr. iMajeed iAl iAlawi, i2010).

Basically ithere iare ifive itypes iof iunemployment: ifrictional iunemployment, icyclical
iunemployment, istructural iunemployment, ireal iwage ior iclassical iunemployment, iand iseasonal

iunemployment. iThe ilevel iof iunemployment ivaries iwith ieconomic iconditions iand iother

icircumstances. iThe icauses iof iunemployment iinclude iincreased ipopulation, irapid itechnological

ichange, ilack iof ieducation ior iskills iand irising icost ilead ito ifinancial, isocial iand ipsychological

iproblems.

There iare ifour imain icauses iof iunemployment. iFirstly, ithe iincreased ipopulation iwhich ileads ito
ihigher iunemployment irates. iAs ithe inumber iof ipeople iwho iare ilooking ifor ijobs iis iincreasing, iit iis

imore idifficult ito iarrange ijobs ifor iall ithese ihuge inumbers iof iworkers. iIn ithis isituation ithe

idemand ifor iwork iwill ibe imore ithan ithe iavailable ioccupations. iThis iwill iresult iin iincreased

inumber iof iunemployed iindividuals. iAn iunemployment isituation icontinues ias ilong ias ithe

idemand-supply igap ipersists. iThis iis ivery iobvious iin icountries ilike iChina iand iIndia.

There iis ia iglobal irapid itechnological ichange iwhich iplays ia ibig irole iin ithe iincreased
iunemployment iproblem. iMany ijobs iwhich iwere ihandled iby ihands iare ibeing idone iby idifferent
imachines iand itechnology inowadays. iThe inew iadvanced itechnology ireplaced ithe ilow iskilled ior
iunskilled iworkers iin idifferent ifactories. iThis imade iproduction ifaster iand imore iaccurate, ibut iit

iresulted iin imore iunemployed ipeople. iFor iexample; iwhen ipersonal icomputers ireplaced

itypewriters, itypewriter ibecome iunemployed iand ihad ito ifind iother iindustries ito ibe iemployed iin.

iAdditionally, iaccording ito ithe iInternational iLabour iOffice itechnological iprogress imay ihave ihad ia

imore isubstantial iimpact. iThe inew itechnological iadvances ihave ieliminated ithe iless icomplicated

itasks; iwhile iat ithe isame itime irequire iworkers ito ihave ihigher ilevels iof iskills. iHowever, iit iis

idoubtful iwhether itechnological ichange iis ileading ito ia inet idestruction iof iemployment, iif iboth

idirect iand iindirect iimpacts iare iaccounted ifor. i(Combating iUnemployment iand iExclusion: iIssues

iand iPolicy iOptions, iContribution ito ithe iG7 iEmployment iConference isubmitted iby ithe iDirector-

General iof ithe iInternational iOffice, iLille, i1-2 iApril i1996. iISBN i92-2-110158-4. iInternational
iLabour iOffice, iGeneva, i1996.)

The ithird icause iof iunemployment iis ilack iof ieducation ior iskills ifor iemployment. iThis ihappens
iwhen ithe iqualifications iof ia iperson iare inot isufficient ito imeet ihis ijob iresponsibilities. iIf ithe

ieducation iwas inot idirected itowards ithe ilabour imarket ithen ia imismatch ioccurs ithus ileading ito

istructural iunemployment. iThese iindividuals iface idifficulties iin ilearning inew iskills iapplicable ifor

ithe irequired ijob ie.g. icomputer iskills, imanagement iand icommunication. iAs ithe ineed ifor iskilled

iand ieducated iworkers iincrease ifor iemployers, ithe iemployment iopportunities ifor ithose iwithout

ia icollege ieducation idecrease ileading ito ihigher iunemployment irate. i(Morgan iDrake iEckstein i,

ind)

Unemployment ican ibe idue ito ithe irising icost. iThe irising icost imakes iit ihard ifor ithe icompanies ito
ipay ithe iusual ioptimum isalary ifor ithe iemployees ior ieven ithe iminimum iwage iin isome icases.

iHence, ithe iemployees ireject ilow iwage ijobs iand ileave ithe icompanies. iFoe iexample iif ithe iprice iof

ipetrol ior ielectricity ihas iincreased ithis idefinitely iwill iaffect ithe iindustries ior ifactories iwhich

idepend ion ithese ienergy isources. iMoreover, isometimes icompanies ineed ito icut idown ithe ibudget

idue ito ian ieconomic icrisis, iindustrial idecline, icompany ibankruptcy, ior iorganizational

irestructuring, iso ithe inumber iof iemployees iis ireduced ior isome ipositions iare icancelled iwhich

iincreases ithe iunemployment irates.

Pakistan iis ione iof ithose icountries ithat iare ifacing ithis igiant iissue ithrough ithe iwhole ieconomy iis
i at ithe iedge iof idestruction. iAccording ito ifew isurveys, ithere iare iabout i2 imillion ipeople iare
i unemployed iin iPakistan iwhich ireally idangerous isign ifor iPakistanis. iThis inew iGovt. isaid iloudly iin
i the ipast ibefore ielections ithat ithey iwill iprovide iemployment ito ithe iunemployed ipeople. iBut
i after igetting irule, ithey iare ireally iupset ito ihandle ithis isituation iwhich iis igetting iviolently ispeed
i towards idownfall. iToday iit iis iseverely iconcerned iproblem ifor ithe ipublic iand ithey iare idemanding
i to igovt. ito isolve iit ion iprior ibases. iAll ieducated istudents ithat iare ipassing iout ifrom itheir idegrees
i are isitting iidle ibecause ithey ihave ino iopportunities, iso ithey iare igoing iabroad ifor ithe ijobs. iMany
i surveys ihave istated ithat iPakistan iis iworst icountry ifor ithe iemployment iand iit iis iplaced iin ipoor
i countries ithat ilive ion iforeign iaids. iThe iGovt. ishould ipay iattention iand icreate ispecial
i opportunities ito ithe istudents ithrough iwhich ithey ican iearn ireasonable imoney ithrough itheir ihard
i work ibut inot ithrough iwrong iways.

How to Avoid Unemployment

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Update and Revive

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Before iany ilayoff, iprofessionals ishould itake ithe itime ito irevive iand iupdate itheir iresume ito
iinclude itheir icurrent ijob iduties iand ishowcase iany inewly ilearned iskills. i iPotential ijob iseekers

ishould ialso itake ithe itime ito iupdate ior icreate itheir iprofessional isocial imedia inetworking ipages,

iincluding iLinkedIn iand iFacebook. i iBut ijust idon’t istick ito ithose isocial imedia isites. i iLook ifor iniche

isites ithat ideal iparticularly iwith iyour iindustry ior iskill iset. i iYou imight ifind iyou ihave imore iluck

igoing ithat iroute ithan ibeing ipooled itogether iinto isuch ia ilarge iand idiverse icrowd iof ijobseekers. i

Research
Many ipeople iwho ihave inot ihad ito isearch ifor ia inew ijob imay inot iknow itheir icurrent imarket
ivalue. iProfessionals ineed ito idetermine ian iappropriate isalary ifor itheir ilevel iof iwork iexperience

ionce ithey ibegin ilooking ifor ianother iposition. iThere iare ia inumber iof iwebsites iand iindustry

imagazines ithat ican ioffer iinsight iinto iwhat ithe igoing imarket irate iis ifor icertain ifields. i iThis iway, iif

iyou iare imaking ibelow-market iwages, iyou idon’t ijust iget ioffered ia isimilar isalary iwith ino ileverage

ito imake ia ihigher ione. i iYou ican iargue ithat ialthough iyou iwere imaking iX iamount iof idollars, ithe

igoing irate ifor isomeone iin iyour iposition iis iZ idollars iand itherefore iyou ifeel iyou iat ileast ideserve iY

idollars. i iArm iyourself iwith ias imuch iintelligence ias iyou ican iwhen ilooking ifor iother ijobs, ibecause

iwhile iyou ifear iyou imight ibecome iunemployed isoon, iyou’re inot iat ithe imoment iand istill ihave

isome ipower ito inegotiate. i

i Step back and take a deep breath

i i i i i i

No ione ilikes ilosing itheir ijob i— iunless ithey ihated iit iin ithe ifirst iplace. iEither iway, idon't ilook iat iit ias ia
ifailure. iUse ithe ifirst ifew idays ito itake iinventory iand irelax. iWatch ia imovie iwith iyour ichildren, ifind

isomething imeaningful ito idistract iyourself, iand itake ia ideep ibreath ibefore idiving iright iback iin.

We iknow ithis iis ieasier isaid ithan idone; ilife igoes ion iand ibills ineed ito ibe ipaid. iThe ipoint iis ito inot idrown iin
iself-pity iand idoubt. iInstead, iturn ito iproductivity. iGive ia iself-evaluation ia itry. iMake ia ilist iof iyour

istrengths iand iweaknesses, iskills iyou ihave, iskills iyou ineed, iand ieven imake ia ilist iof iall ithe ithings iyou

idisliked iabout iyour iold ijob. iThis iexercise iwill ihelp iprepare iyou ito imove iforward iand ieven ipinpoint ithe

itype iof iposition iand icompany iyou're ilooking ifor. i

Be useful
i
Everyone ineeds ito ifeel iuseful; ithat's ijust ihuman inature. iIt's ialso iwhy iself-esteem iis ioften iconnected ito
iour ijobs iand ifamily ilife i— iand iwhy iunemployment idepression iis icommon. iWe ifeel ivalued iwhen iothers

icome ito ius ifor iadvice iand ihelp.

Take ithis inotion iand istart ihelping iothers. iIf iyou're ia iparent, itake ia icue ifrom ithe imany istay-at-home
imothers iand ifathers iwho ibecome iinvolved iin itheir ichildren's ischool iactivities ior ilocal icommunity

ievents. iThey ijoin ineighborhood iorganizations, ilocal iPTA iboards, iand iother iorganizations ito ifeel

ineeded iand ifoster ia isense iof icommunity.

This iis igreat ifor iyour iresume ias iwell. iVolunteering ifor ilocal ievents iand icauses ishows ileadership
ipotential iand ibuilds icommunication iskills. iHiring imanagers ilook ifor icandidates iwho igo ithe iextra imile

ito ihelp iothers isince iit ishows icommitment iand idedication, ia ivaluable itrait ifor iany ibusiness. iLook ifor

ilocal ivolunteer iinitiatives iin iyour iarea, isuch ias inon-profits; ithey ialways ineed ihelp ifrom ivolunteers.