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Unemployment and Underemployment

A short lecture on Unemployment and Underemployment based on WASSCE Syllabus. This was part of my lecture notes at Al-Hijrah College, Nigeria, as a facilitator.

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Murtala Ogunsiji
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277 views17 pages

Unemployment and Underemployment

A short lecture on Unemployment and Underemployment based on WASSCE Syllabus. This was part of my lecture notes at Al-Hijrah College, Nigeria, as a facilitator.

Uploaded by

Murtala Ogunsiji
Copyright
© © All Rights Reserved
We take content rights seriously. If you suspect this is your content, claim it here.
Available Formats
Download as PPTX, PDF, TXT or read online on Scribd
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Unemployment and

underemployment
Meaning of unemployment

 Unemployment is a situation in which able bodied persons in the


labour force who are willing and ready to work cannot find a
job at the present wage rate
 Underemployment is a situation in which workers are employed
to work below their full capacity or given jobs that are below
their qualifications
Types of unemployment

1. Frictional
 This occurs between the period a worker leaves a job and the time he gets another
 It also occurs when workers don’t have information about existing jobs
2. Structural
 This occurs due to the structural changes in the economy
 It occurs when there is a mismatch between workers’ skill and the skill required in the
industry
3. Cyclical
 Cyclic unemployment occurs when there is a recession/ slow
down in economic activities
 This results from low level of aggregate (total)demand
4. Seasonal
 This occurs due to seasonal changes in demand
 E.g. Due to low production of agricultural produce in dry season, few people
will be employed in this period
5. Voluntary
 This occurs when workers decide not to work at the present wage rate
6. Residual
 This occurs due to workers’ disabilities
Causes of unemployment
1. Low aggregate demand: The lower the level of aggregate demand, the
higher the level of unemployment and vice versa, because decrease
in aggregate demand discourages firms to produce more and thereby
employing less labour.
2. Low level of productivity: Low productivity requires low level of
employment; this increases the unemployment
3. Ineffective educational curriculum and planning: The curriculum does not
equip the graduates with the skills required by the industry and it
also fails to make them self employed/dependent.
Causes of unemployment

4. Rural-urban migration: Migration of workers from rural to urban areas create pressure on
the available job opportunities and lead to high unemployment in the urban centres
5. Rapid population growth and Slow pace of economic growth: Increasing population if not
matched with corresponding rise in productivity can result to high unemployment

6. Low level of education: Many are unemployed because of their little or no education

7. High wage rate: If the wage rate is too high, less labour will be employed.
Solution to unemployment

 1. Diversification of the economy: More employment will be generated if


the government develops all sectors of the economy
 2. Restructuring of the educational curriculum : The curriculum should
be restructured to emphasize practical and empower graduates to be self
employed
 3. Rural development programme: Development of rural areas will help
generate jobs for rural dwellers and reduce pressure on existing jobs in
urban centres
 4. Creation of enabling investment environment: Govt. can encourage investors by
reducing company income tax and relaxing the requirements for firm/company
registration and by providing adequate infrastructure that will reduce industrial production
cost
 5. Removal of constraints to labour mobility: This enables workers to move to areas
where vacancies exist
 6. Rapid economic growth and sound economic planning
7. Considerable wage rate: Considerable wage rate helps reduce unemployment resulting
from high wage rate
Consequences of unemployment

 High level of poverty


 Low standard of living
 Low level of economic growth and development
 High crime rate
 Social insecurity
Trade unions

 A trade union is an association of workers in the same or


similar occupations who come together to protect their
common interest such as improving the general working
conditions of members
 E.g. NLC, NMA, NUJ, etc.
Objectives of trade unions

 To organise the workers into an effective union


 To
seek improvement in the conditions of service for their
members(e.g. wage increase, reduced hrs of work)
 Toeducate members on their civil and political rights and
responsibilities
 To promote the development of their occupation
Determinants of trade union effectiveness

 1. Union Leaders’ bargaining power


 2. Level of co-operation among members
 3. Resources of the union
 4. Effectiveness of threat of strike
 5. Nature and prestige of the occupation
Challenges of Trade union

 1. Financial problem
 2. High level of unemployment
 3. Leadership and management problem
 4. Political interference
 5. Political pressure
Weapons Used by Trade Unions

1. Collective bargaining: This is a negotiation between representatives of labour union and


their employer or government aimed at settling the dispute amicably
2. Threat to strike: Involves giving ultimatum to the employer to meet the demand of the
union before a stipulated time
3. Work to rule: Workers go to work but work less than required
4. Picket lines: Workers barricade the entrance of the firm to prevent people from working
5. Strike: This is the ultimate weapon used when others fail; it means complete absence from
work.
Employers’ union

 This is the association of employers in the same line of production or


similar occupations who come together to protect their common
interest such as maximizing their profit
 E.g. Manufacturers’ association of Nig (MAN).
Weapons of Employers’ union

 Collective bargaining
 Threat of a lock-out
 Strike breakers
 Dismissal
 Lock-out

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