HANDOUT # 6

EMPLOYMENT, UNEMPLOYMENT AND UNDER-EMPLOYMENT

If a person is paid for the work they do, we say that they are employed.
If a person is available for work but does not have any, they are unemployed.
If people are working in jobs that do not fully utilize their skills or qualifications, or if
they are not working a standard number of hours, they are said to be under-employed.
The labour force of a country is all those people of working age, regardless of their
situation.

Factors that influence employment, unemployment and underemployment

Availability and use of capital

Capital is money or stock available to a company or person when starting a business or available
to expand or continue a business. The greater the capital available, the greater the number of
employment opportunities that can be created.

Supply and demand in skills market

At different times, there can be:

 A high demand for certain skills, to the point where individuals are recruited from
overseas
 Too many people with the same set of skills for the job available. This might lead to
unemployment and under-employment.

Types of employment

People have different skills that help them to work in the primary, secondary or tertiary sectors
of the economy. Primary industries include mining and agriculture, secondary industries include
processing and manufacturing and tertiary industries include services such as banking and
tourism. The number of workers available for a particular sector may not match the availability
of work in that sector. If there are more workers than jobs available, this can lead to
unemployment.

Markets, trading patterns and preferences

In this context, markets are the potential customers of a business. Markets exist locally,
regionally and internationally. Markets can be created, usually through innovation of new
products. Trading patterns are the general trends in valuations of stocks, bonds, and other
securities and these valuations will affect the capital available to businesses for employment
creation.

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Prevailing economic conditions

If an economy (local, national or global) is contracting, there will be higher levels of

unemployment and the population will have less disposable income.

Availability and price of raw materials

Employees in all sectors rely on raw materials being produced. If the prices of these rise, this
affects businesses’ profit margins and their ability to hire or retain workers.

Technology and resource development

Employment can be affected when a business fails to invest in new technology and it loses
competitiveness. Equally, those seeking employment need to keep up to date with relevant
technological advances to maintain or enhance their employability.

Types of unemployment

Unemployment has different causes, some of which have more serious consequences than others.
For example, structural unemployment, which comes about when demand for a particular
product of service falls, can result in businesses reducing their workforce or, in some
establishments, closing altogether. Many Caribbean countries have faced structural
unemployment due to changes in the world markets for sugar and bananas.

Type of Cause
unemployment
Cyclical A downturn in economic activity
Seasonal The end of periods of economic activity such as crop or
tourist seasons
Casual/temporary Casual workers often have periods of unemployment between
jobs
Normal When those normally fully employed are out of work
Structural Fall in demand for one type of product or service
Technological Automation, mechanization, computerization

Causes of unemployment in the Caribbean

o The growth of Caribbean economies is not great enough to meet the demands for jobs.
o Mechanized and capital-intensive businesses are growing; labor-intensive industries are
declining.
o Many raw materials are processed overseas denying work to secondary and tertiary level
workers.

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o Lack of regional integration makes global competition difficult.

o Young people leave school with sufficient training in new technologies
o Tourism is not producing the projected number of jobs.
o Importation of foodstuffs and other items reduces the demand for local produce, which
affects employment opportunities.
o Some individuals may lack the skills and abilities to enable them to work and they are
said to be unemployable.

Factors and procedures to consider when choosing a job or being self employed

1. Choosing a career:

Your career is the path you take through life and the goals and aspirations you have, as well as
the job or profession you might take up in order to meet those goals and aspiration.

2. What is right for me?

Choosing the career that is right for you means finding the kind of work that suits you as a
person. You need to assess your abilities, interests, likes, dislikes, temperament and personality.
The career you choose should be challenging and satisfying as well as providing sufficient
income. It also needs to relate to your interests and make use of your education.

3. Career guidance

It is helpful to seek guidance in choosing your career and there are a number of sources for this,
including school career guidance counsellors, individuals already working in your chosen field
and representatives at employment fairs and seminars. Informal advice can be gained from
talking with relatives and friends.

Preparation for the world of work

Collecting job information

When deciding on the suitability of a particular job it is good to consider such things as the
availability of work, the hours that are normally worked and the wages or salary the work offers.
Other considerations would be accessibility from your home, the benefits available and the
prospects for advancement.

Listing and assessing available options

A useful process if the listing of the different job options available within your chosen field and
the different routes to take towards the job. Another way is to undergo education and training to
obtain qualifications. This often allows you to begin your career at a higher level.

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Working out consequences

It is impossible to know the future, but it is possible to analyze the information available and
consider the consequences of a choice of career. You need to work out, for example, whether the
chosen job will challenge and satisfy you. You need to determine how well the wages and
conditions suit the life stages you will enter in the years ahead.

Employed or self-employed?

Many people choose to be self-employed which means they work for themselves. The benefits of
this include independence and the freedom to set your own goals and to work out how these will
be achieved.

The disadvantages include bearing all the risks during initial start-up and being responsible for
continued success. The hours required are usually longer and there is a constant need for self-
motivation, commitment, sacrifice and creativity.

Obtaining resources

Individuals who set up their own business need resources, which may come from severance or
redundancy payments, the sale of assets, savings or pension funds.

An individual or group can also approach a bank or other financial institution for a loan or seek a
grant from the government.

Rights and responsibilities of workers

Employees are in a formal relationship with their employer. They expect to receive a fair
payment for the work they do. In return they are expected to fulfil their duties and do the job they
are paid for in a satisfactory manner.

Employees have a right to: Employees have a responsibility to:

 Be paid for any work they do in
accordance with agreed terms
 Be provided with good-quality tools and
equipment necessary for their work
 A safe and clean working environment.
 Freely to join a trade union
 Paid holiday periods
 Agreed maternity leave
 Equal pay and conditions
 A clearly defined job description.
 Carry out their duties in accordance with
agreed terms
 Use tools and equipment in a manner that
does not damage these or expose other
worker to danger
 Help to keep the workplace clean
 Use time for which they have been paid
solely for work and not any other purpose
 Avoid using their employer’s tools and
equipment for personal use or profit
 Ensure property of the employer does not
leave the premises without permission.