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Unemployment: Causes, Effects, and Solutions

• Categories: Unemployment

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Words: 685 |

Published: Jan 30, 2024

Words: 685 | Pages: 2 | 4 min read

Table of contents

Introduction, causes of unemployment, effects of unemployment, solutions to combat unemployment, a. economic factors.

• Global recession: During economic downturns, companies may reduce employment to cut costs and remain competitive.
• Automation and technological advancements: The use of machines and technology may replace human workers in some industries, leading to job losses.
• Outsourcing of jobs: Companies may choose to outsource jobs to other countries where labor costs are lower, leaving domestic workers unemployed.

B. Societal Factors

• Lack of education and skills: Individuals without proper education and job training may be ill-equipped to meet the demands of a constantly evolving job market.
• Discrimination in hiring processes: Certain groups, such as women, minorities, and older workers, may face barriers in securing employment due to discrimination.
• Dependency on welfare programs: Some individuals may choose to remain on welfare programs due to a lack of incentive to enter the workforce or because they cannot find suitable employment.

A. Economic Effects

• Reduction in consumer spending: Without a steady income, unemployed individuals may have less money to spend, resulting in a decline in consumer spending.
• Decline in government revenue: With fewer people working, the government may see a decline in tax revenue, which can impact its ability to provide necessary services and promote economic growth.
• Increase in social welfare expenses: The government may need to allocate more funds toward social welfare programs, such as unemployment benefits and food assistance, to support those who are unemployed.

B. Social Effects

• Increase in crime rates: Individuals who are unemployed may resort to criminal activities to make ends meet, leading to a rise in crime rates.
• Mental health issues: Unemployment can cause stress, anxiety, and depression, which can negatively impact an individual's mental health.
• Strained relationships and family instability: Unemployment may cause financial strain and tension within families, leading to relationship problems and instability.

A. Economic Solutions

• Encouraging entrepreneurship and small business development: Providing resources and support for individuals to start their own businesses can lead to job creation and economic growth.
• Promoting vocational training and skill development programs: Ensuring that individuals have access to education and training programs can increase their job readiness and competitiveness in the job market.
• Implementing balanced trade policies: Creating policies that promote fair trade and reduce job outsourcing can protect domestic jobs and promote job growth.

B. Social Solutions

• Addressing educational disparities and providing access to quality education: Providing quality education to disadvantaged communities can improve their job readiness and reduce unemployment rates.
• Combating discrimination in the workplace: Enforcing anti-discrimination laws and promoting diversity and inclusion in the workplace can reduce barriers to employment for certain groups.
• Strengthening social safety net programs: Ensuring that social welfare programs are designed to incentivize work and provide support to those in need can promote economic stability and reduce poverty.
• Bureau of Labor Statistics. (2021, October 8). Employment Situation Summary. https://www.bls.gov/news.release/empsit.nr0.htm

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Unemployment Problem And Solution (Essay Sample) 2023

Unemployment problem and solution.

• Search Search Please fill out this field.
• US & World Economies
• Unemployment

Unemployment Solutions and What's Most Cost-Effective

The Best Way To Solve High Unemployment

Erika Rasure is globally-recognized as a leading consumer economics subject matter expert, researcher, and educator. She is a financial therapist and transformational coach, with a special interest in helping women learn how to invest.

Monetary Policy

Fiscal policy, the most cost-effective solution, fiscal policy risks, the bottom line, frequently asked questions (faqs).

The solution for unemployment is, of course, to create new jobs. The number of jobs that need to be created depends on the unemployment rate and the number of people entering the labor force in search of work. When unemployment creeps above 6% to 7% and stays there, it means the economy can't create enough new jobs. That's when the government steps in.  

For historical data on U.S. unemployment trends, the Bureau of Labor Statistics publishes the  unemployment rate by year .   It reports the annual percentage of the unemployed in the labor force, as far back as 1949. It also indicates the success or failure of the fiscal and monetary policies through the years, since they affect the rate of unemployment. 

The first solution is  expansionary monetary policy from the Federal Reserve. It's powerful, quick, and effective. Lower interest rates make it easier for families to borrow what they need. That includes expensive items like cars, homes, and consumer electronics. It stimulates enough demand to put the economy back on track. Low-interest rates also allow businesses to borrow for less. That gives them the financial capital to hire enough workers to meet rising demand.  

If the recession is really severe, then monetary policy might not be enough on its own. That's when fiscal policy is needed. The government can either cut taxes or increase spending to stimulate the economy. An expansionary fiscal policy  is slower than monetary policy to get started. It takes time for Congress and the president to agree on the next steps, but it can be more effective once executed. It also provides much-needed confidence that the government will turn things around. Confidence is crucial for convincing people to spend now for a better future.

Cutting taxes works like lowering interest rates. Both give businesses and consumers more money to spend. That increases demand. It gives businesses more cash to invest and hire more workers. 

Government spending can also take the form of jobs programs. The government can hire employees directly. It also contracts with companies to build things and provide services. It provides consumers with the cash they need to buy more products.

Dollar for dollar, what's the best investment that creates the most jobs? A University of Massachusetts Amherst study found that  building mass transit  is the most cost-effective solution. One billion dollars spent on public transportation creates 19,795 construction jobs.

Unemployment benefits can provide growth as well. According to Wayne Vroman, an economist and senior fellow at the Urban Institute for the Department of Labor, unemployment insurance led to the creation of 1.6 million jobs on average each quarter from 2008 to 2010. The unemployed are most likely to spend every dime they get. They buy basics like groceries, clothing, and housing. As a result, every dollar spent on unemployment benefits stimulates $1.64 in gross domestic product.

How can $1 create $1.64? It does it through the ripple effect. For example, a dollar spent at the grocery store pays for the food. It also helps pay the clerk's salary, the truckers who haul the food, and even the farmers who grow it. The clerks, truckers, and farmers then buy groceries. This ripple effect keeps demand strong, creating added benefits. Stores keep their employees to supply the goods and services the unemployed need. Without these benefits, demand would drop. Then retailers would need to lay off their workers, increasing unemployment rates. 

Unemployment benefits work fast. The government writes a check that goes directly into the economy. Public works projects take longer to get implemented. The plans must be updated, workers hired, and supplies delivered. 

Funding education is also an effective unemployment solution. One billion dollars spent hiring teachers adds $1.3 billion to the economy. Better-educated people can get higher-paying jobs. They can buy more things with the higher wages they earn. Each $1 billion spent can create 17,687 jobs. That's much better than defense spending . It only creates 8,555 jobs for the same investment. Defense is more capital-intensive. Modern defense relies more on drones, F-35s, and aircraft carriers than soldiers.

The most popular fiscal stimulus is across-the-board  income tax cuts . That's not the most cost-effective, according to the UMass/Amherst study. One billion dollars in cuts creates 10,779 jobs. Workers only spend half the money, which in this case is only $505 million. 

As a result, reductions in the tax rate are not the most effective way to help job growth. Most people don't realize they are getting a break until tax time. The tax cut means they pay less in taxes, but they still have to pay. Psychologically, they are less likely to spend anything extra. It just doesn't feel like a bonus. As a result, people are more liable to save anything they get or use it to pay down other debts.  

A more effective tax cut is in businesses' payroll taxes. The best place to give business tax relief is with small businesses. From 2000 to 2018, they produced 65% of all net new jobs created.  

The downside of fiscal policy is that it could add to the budget deficit. That creates more government debt. As debt approaches 100% of the economy's total output, it slows economic growth. Investors could lose the desire for that government's debt. This makes interest rates rise, increasing the cost of borrowing.

Advocates of  supply-side economics  say that, over time, tax cuts boost the economy enough to replace any lost tax revenue, but according to the Laffer Curve, that's only true if taxes are over a certain threshold to start with.  

The government uses two policies to tackle unemployment: monetary and fiscal.

Expansionary monetary policy increases the money supply and:

• Has more immediate effects
• Stimulates demand, production; and ultimately, employment
• Is managed by the Federal Reserve or a central bank

Expansionary fiscal policies include government spending and tax cuts. These:

• Take more time to have an impact
• Have a greater impact on consumerism, so they are more effective as economic stimuli
• Increase government debt and add to the budget deficit

The most cost-effective solutions are fiscal. Building mass transit, granting unemployment benefits, funding the educational sector, and payroll tax cuts allow consumers to gain more income which they spend to spur demand.  

How does a high unemployment rate affect the economy?

High unemployment can have detrimental effects throughout the economy. When fewer workers are working, it reduces production and GDP. Unemployed workers drain resources from state and federal governments while tax revenues are simultaneously cut. Persistent unemployment can have serious societal effects, as well. A study conducted during the Great Recession showed how extended unemployment can hurt workers' long-term earning potential, which can affect the economy for years to come.

What is the natural rate of unemployment?

The natural rate of employment is an estimate of how low unemployment would go when inflation is stable and economic production is steady. It's difficult to estimate with precision, but economists suggest that it usually hovers around 4.5% to 5.5%. In other words, when the economy is stable and growing neither too quickly nor too slowly, natural unemployment will usually fall somewhere within that range.

Stanford University. " Why Has the Unemployment Rate Fared Better Than GDP Growth? "

U.S. Bureau of Labor Statistics. " Labor Force Statistics From the Current Population Survey ."

Board of Governors of the Federal Reserve. " How Does Monetary Policy Influence Inflation and Employment? "

International Monetary Fund. " Fiscal Policy: Giving and Taking Away ."

National Archives. " Estimates of Job Creation From the American Recovery and Reinvestment Act of 2009 ."

Carnegie Mellon University. " The American Recovery and Reinvestment Act: Solely a Government Jobs Program? "

University of Massachusetts Amherst. " The U.S. Employment Effects of Military and Domestic Spending Priorities ," Page 6.

Center for American Progress. " Unemployment Insurance Dollars Create Millions of Jobs ."

Economy.com. " Washington Throws the Economy a Rope ."

Congressional Budget Office. " Economic Stimulus: Evaluating Proposed Changes in Tax Policy ," Page 5.

Congressional Budget Office. " The Fiscal Multiplier and Economic Policy Analysis in the United States ," Page 5.

U.S. Small Business Administration. " Frequently Asked Questions ," Page 1.

Bank for International Settlements. " The Real Effects of Debt ," Page 1.

University of California, Berkeley. " How Far Are We From the Slippery Slope? The Laffer Curve Revisited ."

Economic Policy Institute. " Sustained, High Joblessness Causes Lasting Damage to Wages, Benefits, Income, and Wealth ."

Federal Reserve Bank of San Francisco. " The Natural Rate of Unemployment over the Past 100 Years ."

• 7 Causes of Unemployment 2 of 16

Essay on Problem of Unemployment

Students are often asked to write an essay on Problem of Unemployment in their schools and colleges. And if you’re also looking for the same, we have created 100-word, 250-word, and 500-word essays on the topic.

Let’s take a look…

100 Words Essay on Problem of Unemployment

Introduction.

Unemployment refers to the state of being jobless despite having the ability to work. It’s a global problem affecting both developed and developing nations.

Unemployment can be caused by various factors. These include technological advancements that replace human labor, economic recessions, and lack of necessary skills among job seekers.

Unemployment has many negative effects. It leads to poverty, increases crime rates, and can cause mental health issues due to stress and frustration.

Addressing unemployment requires efforts from both individuals and governments. Improving education, promoting entrepreneurship, and creating more job opportunities can help solve this issue.

250 Words Essay on Problem of Unemployment

Unemployment, a pervasive socio-economic issue, is a state where individuals willing and capable of working cannot find employment. It is a global problem, affecting both developed and developing nations, and poses significant challenges for society.

Unemployment is primarily caused by economic downturns, technological advancements, and structural changes in the economy. Economic recessions often lead to job losses, while technological advancements can render certain jobs obsolete, causing technological unemployment. Moreover, structural changes, such as shifts from manufacturing to service-based industries, can also lead to unemployment.

Impacts of Unemployment

The impacts of unemployment are multi-faceted. On the individual level, it leads to financial hardship and psychological distress. At the societal level, high unemployment rates can lead to increased crime rates and social unrest. Economically, it results in loss of GDP and increased government expenditure on welfare benefits.

Addressing unemployment requires a multi-pronged approach. Investment in education and training can equip individuals with skills relevant to the evolving job market. Governments can also stimulate job creation through fiscal policies and support for industries. In addition, promoting entrepreneurship can create new job opportunities.

While unemployment is a complex and persistent issue, it is not insurmountable. Through concerted efforts from individuals, society, and governments, the problem of unemployment can be mitigated, leading to a more prosperous and stable society.

500 Words Essay on Problem of Unemployment

Unemployment is a serious issue afflicting societies globally. It is not just an economic issue but a social problem that affects the fabric of society, leading to numerous socio-economic problems. Unemployment is the state where individuals who are capable of working and are actively seeking work are unable to find employment.

The Causes of Unemployment

Unemployment can be attributed to various factors. The most common cause is economic recessions, which lead to job losses as companies struggle to maintain profitability. Technological advancements also contribute to unemployment. As technology evolves, certain jobs become obsolete, leading to job displacement. Moreover, the mismatch between the skills job seekers possess and the skills employers need is another significant cause of unemployment.

The Consequences of Unemployment

Unemployment has far-reaching effects on individuals and society at large. It leads to financial hardship for the unemployed, causing stress and potentially leading to mental health issues. It also results in an increase in poverty rates, crime, and social unrest. On a broader scale, high unemployment rates can lead to a slowdown in the economy as consumer spending decreases.

Addressing Unemployment

Addressing unemployment requires strategic planning and concerted efforts from governments, educational institutions, and corporations. Implementing policies that stimulate economic growth can create more job opportunities. Governments can invest in sectors such as infrastructure, technology, and renewable energy, which have the potential to generate employment.

Education and training programs need to be aligned with the needs of the job market to address the skills gap. Encouraging entrepreneurship can also help create jobs. Corporations can contribute by investing in employee training to upgrade their skills in line with technological advancements.

Unemployment is a multifaceted problem with complex causes and consequences. While it is impossible to completely eradicate unemployment, strategic measures can significantly mitigate its impact. It is essential for all stakeholders to collaborate and work towards creating a robust and dynamic job market that can adapt to changing economic landscapes and technological advancements. This way, we can ensure that everyone who is willing and able to work has the opportunity to do so, thereby reducing the problem of unemployment.

That’s it! I hope the essay helped you.

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Policies for reducing unemployment

There are two main strategies for reducing unemployment –

• Demand side policies to reduce demand-deficient unemployment (unemployment caused by recession)
• Supply side policies to reduce structural unemployment / (the natural rate of unemployment )

A quick list of policies to reduce unemployment

• Monetary policy – cutting interest rates to boost aggregate demand (AD)
• Fiscal policy – cutting taxes to boost AD.
• Education and training to help reduce structural unemployment.
• Geographical subsidies to encourage firms to invest in depressed areas.
• Lower minimum wage to reduce real wage unemployment.
• More flexible labour markets, to make it easier to hire and fire workers.

Video summary

Demand side policies

Demand side policies are critical when there is a recession and rise in cyclical unemployment. (e.g. after 1991/92 recession and after 2008 recession)

1. Fiscal Policy

Fiscal policy can decrease unemployment by helping to increase aggregate demand and the rate of economic growth. The government will need to pursue expansionary fiscal policy; this involves cutting taxes and increasing government spending. Lower taxes increase disposable income (e.g. VAT cut to 15% in 2008) and therefore help to increase consumption, leading to higher aggregate demand (AD).

With an increase in AD, there will be an increase in Real GDP (as long as there is spare capacity in the economy.) If firms produce more, there will be an increase in demand for workers and therefore lower demand-deficient unemployment. Also, with higher aggregate demand and strong economic growth, fewer firms will go bankrupt meaning fewer job losses.

Keynes was an active advocate of expansionary fiscal policy during a prolonged recession. He argues that in a recession, resources (both capital and labour) are idle. Therefore the government should intervene and create additional demand to reduce unemployment.

Impact of Higher AD on Economy

This shows an increase in AD causing higher real GDP. The increase in output leads to firms needing more workers.

• It depends on other components of AD. e.g. if confidence is low, cutting taxes may not increase consumer spending because people prefer to save. Also, people may not spend tax cuts, if they will soon be reversed.
• Fiscal policy may have time lags. E.g., a decision to increase government spending may take a long time to affect aggregated demand (AD).
• If the economy is close to full capacity, an increase in AD will only cause inflation. Expansionary fiscal policy will only reduce unemployment if there is an output gap.
• Expansionary fiscal policy will require higher government borrowing – this may not be possible for countries with high levels of debt, and rising bond yields.
• In the long run, expansionary fiscal policy may cause crowding out, i.e. the government increase spending but because they borrow from the private sector, they have less to spend, and therefore AD doesn’t increase. However, Keynesians argue crowding out will not occur in a liquidity trap .

2. Monetary policy

Monetary policy would involve cutting interest rates. Lower rates decrease the cost of borrowing and encourage people to spend and invest. This increases AD and should also help to increase GDP and reduce demand deficient unemployment.

Also, lower interest rates will reduce exchange rate and make exports more competitive.

In some cases, lower interest rates may be ineffective in boosting demand. In this case, Central Banks may resort to Quantitative easing. This is an attempt to increase the money supply and boost aggregate demand. See: Quantitative easing.

• Similar problems to fiscal policy. e.g. it depends on other components of AD.
• Lower interest rates may not help boost spending if banks are still reluctant to lend.
• Demand side policies can contribute to reducing demand deficient unemployment e.g. in a recession. However, they cannot reduce supply-side unemployment. Therefore, their effectiveness depends on the type of unemployment that occurs.

Supply side policies for reducing unemployment

Supply side policies deal with more micro-economic issues. They don’t aim to boost overall aggregate demand but seek to overcome imperfections in the labour market and reduce unemployment caused by supply side factors. Supply side unemployment includes:

• Classical (real wage)

Policies to reduce supply-side unemployment

1. Education and training . The aim is to give the long-term unemployed new skills which enable them to find jobs in developing industries, e.g. retrain unemployed steel workers to have basic I.T. skills which help them find work in the service sector. – However, despite providing education and training schemes, the unemployed may be unable or unwilling to learn new skills. At best it will take several years to reduce unemployment.

2. Reduce the power of trades unions . If unions can bargain for wages above the market clearing level, they will cause real wage unemployment. In this case reducing the influence of trades unions (or reducing Minimum wages) will help solve this real wage unemployment.

3. Employment subsidies . Firms could be given tax breaks or subsidies for taking on long-term unemployed. This helps give them new confidence and on the job training. However, it will be quite expensive, and it may encourage firms to just replace current workers with the long-term unemployment to benefit from the tax breaks.

4. Improve labour market flexibility . It is argued that higher structural rates of unemployment in Europe is due to restrictive labour markets which discourage firms from employing workers in the first place. For example, abolishing maximum working weeks and making it easier to hire and fire workers may encourage more job creation. However, increased labour market flexibility could cause a rise in temporary employment and greater job insecurity.

5. Stricter benefit requirements . Governments could take a more pro-active role in making the unemployed accept a job or risk losing benefits. After a certain period, the government could guarantee a public sector job (e.g. cleaning streets). This could significantly reduce unemployment. However, it may mean the government end up employing thousands of people in unproductive tasks which is very expensive. Also, if you make it difficult to claim benefits, you may reduce the claimant count, but not the International Labour force survey. See: measures of unemployment

6. Improved geographical mobility . Often unemployed is more concentrated in certain regions. To overcome this geographical unemployment, the government could give tax breaks to firms who set up in depressed areas. Alternatively, they can provide financial assistance to unemployed workers who move to areas with high employment. (e.g. help with renting in London)

7. Maximum working week . It has been suggested a maximum working week of (for example 35 hours) would lead to firms needing to hire more workers and reduce unemployment.

• However, a maximum working week may increase a firms costs and therefore they are not willing to hire more. Also, there is no certainty a firm will respond to a cut in hours by employing more – they may try to increase productivity. Those with the wrong skills will still face the same problem.

Video on policies to reduce unemployment

• Causes of Unemployment
• The unemployment problem
• Inflation v Unemployment

47 thoughts on “Policies for reducing unemployment”

yep, in a way I agree that lowering the minimum wage would just lead to more people not working and getting money of the government as an alternative. This results in a higher unemployment rate, as well as money the government could be spending on medicine being spend on people who don’t have jobs seeing as its not worth working because the money you make is too low.

My suggestion is that as South Africans we are not working 24_7 .If all government departments eg clinics,police,our courts some municipal departments like refuse removal,water and sewer,revenue department can work shifts that will keep all this places open in all municipalities and your Pick and pays and other will also follow suit.Taxis will also be forced to employ more drivers for nightshift. Big companies Eskom and mines to generate own electricity to help the grid by making manual electric plants like tandem bicycle that can drive turbines like old bicycle light.Its possible just need engineers to figure out how.But those manual generators can give people employment 24/7 as well.

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AP®︎/College Macroeconomics

Course: ap®︎/college macroeconomics   >   unit 2.

• Unemployment rate primer
• Natural, cyclical, structural, and frictional unemployment rates
• Worked free response question on unemployment

Lesson summary: Unemployment

• Unemployment
• Types of unemployment and the natural rate of unemployment

Lesson overview

Key takeaways, the labor force participation rate (lfpr), limitations of the unemployment rate, three types of unemployment, the natural rate of unemployment, changes in the natural rate of unemployment (nru), key equations, the labor force:, the unemployment rate (ur), common misperceptions.

• Not everyone who is out of work is unemployed. In order to be counted as unemployed you have to be out of work, looking for work, and able to accept a job if one is offered to you. If you are out of work and not looking, then you are considered “not in the labor force” rather than unemployed.
• We tend to think of unemployment as an undesirable thing, but a certain amount of unemployment is actually part of a healthy economy. Structural unemployment occurs when new industries are created and old industries become obsolete. For example, when we moved from using horses and buggies to using cars to get around, this put a lot of buggy makers in the structurally unemployed category.
• Frictional unemployment might not seem very fun, but consider what it means to have zero unemployment—nobody ever looks for a job, they just remain in whatever job they are given! In fact, a number of dystopian novels have been written in which everyone in a society is automatically assigned a fixed career (such as the Divergent series). Those societies have zero frictional unemployment, but they are also quite unpleasant if you are unhappy with that career!
• A decrease in the unemployment rate isn’t necessarily a sign of an improving economy. When people stop looking for jobs and drop out of the labor force as discouraged workers, the unemployment rate will decrease even though the true employment situation hasn’t gotten any better. This is why it is important to look at both changes in the unemployment rate and changes in the labor force participation rate. Looking at both changes let’s you get a more complete idea about changes in the employment situation.

Discussion Questions:

• An inventor in Burginville developed a fantastic new dictation machine that perfectly records speech and turns it into a typed document. Unfortunately, that meant that unemployment increased among typists working in offices. Which type of unemployment is this? Explain. Solution, please. This is structural unemployment because typists skills are no longer desired. The changing structure of office work has resulted in people losing their jobs.
• The nation of Fitlandia has 120 , 000 ‍   people. Of these, 20 , 000 ‍   are children under the age of 16, 72,000 ‍   have jobs, 8,000 ‍   don’t have jobs and are looking for work, and 20,000 ‍   people are retired. Assuming that these are all noninstitutionalized civilians, calculate the labor force participation rate and the unemployment rate. I think I got it. Can I check my work? L F = # Employed + # Unemployed = 72,000 + 8,000 = 80,000 L F P R = L F Eligible Population × 100 % = 80,000 100,000 × 100 % = 80 % U R = # Unemployed # Labor Force × 100 % = 8,000 80,000 × 100 % = 10 % ‍  
• Explain why a decrease in the unemployment rate can actually signal a tough job market.

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Unemployment during the pandemic: How to avoid going for broke

Key takeaways.

• Without significant policy changes, employers will be hit with hefty tax increases to pay for mounting unemployment insurance (UI) claims.
• Thinning tax bases make financing UI more challenging.
• Having state UI trust funds in the red may make it much harder for job markets to recover.

Since the onset of the COVID-19 pandemic in late February, tens of millions of Americans have lost their jobs. Anxiety among many employers and consumers is still high — suggesting little hope of a rapid recovery.

This leaves state and local governments with gaping budget shortfalls amid falling income and sales tax revenues while demand for public services rises. A particularly fast-growing area of state expenditure is the payment of unemployment insurance (UI) benefits.

There has been extensive discussion among policymakers and the media regarding the trade-offs of more generous or longer-lasting UI benefits, such as the federal government’s provision of an additional $600 per week that expired July 31. But there has been very little talk about the tax hikes they will incur.

Many states have depleted their UI trust funds in the current crisis and have started to borrow from the federal government to pay their residents’ UI benefits. In the absence of additional policy changes, employers will be hit with significant UI tax increases over the next few years. And that will likely prevent some of the jobs that were lost from coming back.

In this policy brief, we explain how state unemployment insurance programs are financed and the threats to their solvency. We also discuss two reforms: one to relieve employers faced with crippling payroll tax increases in the coming years, and another to ensure that state UI trusts have enough money for future payouts.

Understanding unemployment insurance

Unemployment insurance is one of the largest social insurance programs in the United States, with each state running its own UI program to pay benefits to people laid off from their jobs. In most states, UI replaces about half of a worker’s earnings up to a weekly benefit maximum ($443 in the median state) for a maximum of 26 weeks (6 months).

While providing a needed cushion to workers, UI leaves policymakers with a difficult balancing act. As benefits become more generous, many recipients reduce their efforts to find and maintain jobs, reducing total income and burdening other workers (Johnston and Mas 2018). But if benefits become stingier, the cushion provides less support leaving some unemployed vulnerable to fall behind on their bills or lose their housing (Ganong and Noel 2019). [1]

Benefits are generally paid to people with relatively low saving rates, so the money that is distributed is quickly spent, providing short-term stimulus for consumer goods. This leads economists to refer to UI as an “automatic stabilizer.” Without the need for additional legislation, states  automatically  spend more money on unemployment benefits when economic conditions deteriorate, and spending naturally retracts as the economy recovers.

During the strong labor market leading up to the pandemic, just 220,000 workers filed new UI claims in the typical week. In late February, the unemployment rate was at 3.5 percent — a 60-year low — ­and about 1.7 million Americans were receiving UI benefits.

But two months later, the pandemic’s sudden and massive shock to the economy vaulted the U.S. unemployment rate to 14.7 percent — an 80-year-high. This April, rates varied substantially across states, from a high of 28.2 percent in Nevada to a low of 8.3 percent in Nebraska.

During the last week of March, 6.9 million Americans filed new claims for UI benefits. As demonstrated in Figure 1, this was  10 times higher  than the corresponding peak in new UI claims during the depths of the Great Recession more than a decade ago. By early May of this year, more than 25 million Americans were receiving UI payments and in every week since early March, new UI claims have exceeded the Great Recession peak of 660,000.

Figure 1: Weekly Initial Unemployment Insurance Claims (Thousands)

From March through the end of July, the federal CARES (Coronavirus Aid, Relief, and Economic Security) Act increased unemployment benefits for each recipient by $600 per week. That meant the average UI recipient was paid one-third  more  in unemployment than she earned while working (Ganong et al. 2020).

This raised concerns that workers had little incentive to return to work or find a new job, a condition necessary for labor market restructuring and recovery. [2]  This additional UI funding expired at the end of July after lawmakers were unable to agree on another round of federal spending. President Trump attempted to provide a $300-dollar weekly “top-up” by executive order (with states given the option to provide an additional $100). Whether and when that happens is unclear given that states have to apply for the funding. [3]

UI benefits are financed by a payroll tax on employers. Unlike other taxes, UI tax rates are “experience-rated,” which means that an employer’s future tax rate rises if its employees claim UI benefits, and its tax rate falls when the firm avoids layoffs. This gives employers a strong incentive to balance the demand for layoffs with the cost that they impose on the UI system.

One consequence of experience-rating UI taxes is that tax rates increase as the economy begins to recover from recession. This significantly raises the cost of hiring new workers or retaining old ones, likely weighing down recovery of the labor market.

As shown in Figure 2, the average UI tax rate increased by more than 50 percent from 2009 to 2012 as the recovery was haltingly underway.  This increase was especially high in middle-class industries — like construction and manufacturing — that were hit hardest during the Great Recession.  As this same figure shows, average tax rates were more than 2.5 times as high among employers in construction as among all employers in the years following the three most recent recessions.

Figure 2: Average UI Tax Rate on Total Wages (1990-2018)

Surviving firms have to cover the UI costs generated by the employers that went out of business — causing them to be doubly burdened. Given the much larger increase in UI claims during the current recession relative to previous ones and the likely greater rate of firm exit, the increase in UI taxes could be substantially higher over the next few years than in the years following the Great Recession. This will encourage outsourcing and automation, induce some firms to shut down, and impede employment.

Softening the blow to businesses

Unless employment recovers with impressive speed, each claim will draw an average of $7,000 in payments from state UI trust funds. Those payments will transform into an estimated $270 billion dollars in payroll tax increases on firms over the next few years, reducing the ability of firms to resume normal hiring and employment and further stalling a labor market comeback. [4]

In March and April of this year, 20 states suspended experience rating to shield their employers from an avalanche of additional UI taxes in the upcoming years. These states span the political spectrum as well as geography, including Arizona, Georgia, Idaho, Maine, Maryland, Ohio, Texas, and Washington. [5]

While this policy change will — all else equal — hasten the labor market recovery in these states, it may also lead to a substantial increase in layoffs since it removes firms’ financial incentives to retain workers. Consistent with this, a comparison of five states that suspended experience rating with five neighboring states that did not reveals that layoff rates (defined as new UI claims divided by the workforce) were 30 percent higher in the five that shut down experience rating. [6]

States are therefore in a bind. By maintaining experience rating, a wave of future tax increases may hamper the economic recovery and prolong unemployment. But suspending experience rating may induce additional layoffs today, when things are most dire.

To soften the blow over the next few years while maintaining the incentives for employers to retain their workforce, states could adjust each company’s UI costs so that they are temporarily evaluated based on conditions in their industry — reducing the scope for tax increases that were out of the firm’s control.

For the next few years, employers would essentially be graded on a curve, comparing their layoff history with industry peers rather than a non-existent perfect firm. For example, since restaurants have been hit especially hard during the pandemic while the average technology firm has thrived, a restaurant that laid off 10 percent of its workers would face a smaller tax increase than a computer software company that did the same.  Employers would have essentially equal incentives to maintain their workforce, but would not face crushing tax increases if they happen to be in an industry that was differentially hit by the COVID pandemic and the resulting lockdowns.

The benefits of such a policy could be substantial. Research suggests that employment is highly sensitive to UI tax increases in part because they hit firms that are already on the proverbial ropes. Anderson and Meyer (1997) find that a 1 percent increase in costs from UI taxes reduces employment by 2 percent. More recent research by Johnston (2020) finds even larger effects.

Shoring up the trust funds

The pandemic has shed light on the vulnerability of UI financing. Better maintenance of UI trust funds is vital to prepare states for the next economic downturn and improve prospects for future recoveries.

There is a large and growing gap in UI tax costs across jurisdictions. States like California and Florida have a low maximum tax rate and an annual tax base of around $7,000 — the lowest allowed by federal law — resulting in maximum potential UI taxes of about $400 per worker. In contrast, states like Washington and Oregon maintain large tax bases ($52,700 and $42,100, respectively) resulting in potential UI taxes of more than $2,000 per worker. [7]

In good times, states store revenues from UI taxes in a trust fund and that fund is drawn down in the depth of recessions. In recent years, however, state trust funds have been low even in good times — a function of benefits that are more generous than their financing (von Wachter 2016). The Department of Labor’s 2020 Solvency Report shows that despite a 10-year economic expansion, 21 state UI trust funds were below the minimum recommended reserve, just prior to the pandemic (U.S. Department of Labor 2020). [8]  As of August 2020, 11 states have already depleted their UI trust funds and have started to receive loans from the federal government to pay UI benefits. [9]

These deficits may contribute to lethargic recoveries. When trust funds are low, states must steeply raise rates to recover their costs and pay benefits. The timing of these increases could not be worse. Weak trust funds also undermine experience rating. When a state trust fund is in debt to the federal government, federal UI taxes rise on all firms in that state until the federal loan is repaid, regardless of the firm’s layoffs.

In California, for instance, the large loan balance accrued during the 2008 recession was not repaid in full until 2018, hiking payroll taxes for employers across the board. This weakens the intended incentives of experience rating to encourage employment stability and curb abuse of the UI system. According to the same Labor Department Solvency Report cited above, California’s UI trust fund was in the worst position of all 50 states just prior to the pandemic (Appendix Figure 1). [10]

The thinning tax base is a leading cause of low UI reserves. States choose how much of a worker’s earnings are exposed to UI taxation, but the federal government can “update” the minimum requirement to keep pace with inflation and the rise in average earnings. The current federal requirement of $7,000 has —remarkably — not been updated since 1982, eroding the tax base unless states have legislated increases or proactively linked their taxable UI earnings base to inflation or wage growth.

Another important consequence of a small tax base is that UI taxes become much more regressive. This can reduce the employment opportunities for part-time workers or those with low earnings since firms essentially pay an equal tax for each worker (Guo and Johnston 2020). In a state like California, an employer would pay the same UI tax for a worker who earned $8,000 annually as for one who earned $40,000.

But the latter worker is eligible for a weekly UI benefit that is five times larger ($400 per week versus just $80 per week for the lower-paid worker). Expanding the UI program’s taxable wage base in states like California would reduce the implicit penalty on hiring low-wage earners (principally seasonal and part-time workers as well as students).

To restore the health of UI trust funds, governments should expand their tax bases to be proportional to the level of benefits in their state. A basic reform to shore up trust funds could be to require states to have taxable wage bases at least half as large as their annual insurable earnings.  

Figure 3 plots the ratio of insured wages to taxable wages across the country, with larger values indicating greater insurance than funding.

Figure 3: Ratio of Annual Insured Wages to Taxable Wages (2015)

In California the UI-insurable income is $47,000, more than six times greater than the tax base of only $7,000. This reform would naturally link revenues to the generosity of the state’s UI system, allow states to lower tax rates, and bring in sufficient revenues to cushion workers the next time there is an economic shock. Harmonizing tax bases across states would also reduce the incentive for multi-state firms to reallocate jobs and operations based on state UI tax differences (Guo 2020).

Time for action

The COVID-19 crisis has put unemployment insurance at center stage of American politics and economic policy. It has provided a lifeline for tens of millions of workers who have lost their jobs since the pandemic’s onset six months ago, while at the same time exposing the system’s vulnerabilities. Given the complexity of UI financing and the scarcity of empirical evidence on which to rely, this is an important area for additional work and exploration.

Unless policymakers take steps to reform how the states’ unemployment insurance trust funds are financed, tax hikes will hurt labor market recoveries across the country — and with them, the American worker.

Mark Duggan is the Trione Director of SIEPR and the Wayne and Jodi Cooperman Professor of Economics at Stanford. Audrey Guo is an assistant professor of economics at Santa Clara University’s Leavey School of Business. Andrew C. Johnston is an assistant professor of economics, as well as applied econometrics at the University of California at Merced.

The authors are grateful to Isaac Sorkin for his helpful feedback.

1  States differ in where they choose to fall on that trade-off. The maximum weekly benefit varies substantially across states, from a low of $235 in Mississippi to a high of $790 in Washington.  Some states also have a maximum duration of less than 26 weeks.

2  Recent research suggests that, at least in the short term, the disincentive effects of the increases in UI benefits (caused by the CARES Act) were minimal (Altonji et al. 2020).

3  More than half of states had applied or signaled their intention to apply as of August 21. Only South Dakota announced that it would not be applying (Iacurci 2020).  States that are approved are guaranteed just three weeks of federal funding for the enhanced UI benefits, though more federal funding may be available.

4  For this calculation, we extrapolate weekly UI claims through the end of the year and assume that half of those claims become benefit spells. We use data on average weekly benefit amounts and average UI spell durations to calculate the typical cost of a UI benefit spell at a little over $7,000. The product of these two values is an estimate of the UI benefit costs that will factor into UI taxes over the coming years. The actual average value could be substantially higher if the recovery is slow, as this would lead to longer and more costly average UI benefit periods.

5  These 20 states are Alabama, Arizona, Georgia, Idaho, Iowa, Louisiana, Maine, Maryland, Minnesota, Missouri, Montana, Nebraska, North Carolina, North Dakota, Ohio, Pennsylvania, South Carolina, Texas, Utah, Washington, and the District of Columbia.

6  The matched pairs are — with the states that suspended experience rating listed first — Alabama and Mississippi, Ohio and Indiana, North Dakota and South Dakota, Arizona and New Mexico, and Idaho and Oregon.

7  Appendix Table 1 lists the UI tax base in each state in 2020 along with each state’s maximum per-worker tax and maximum weekly UI benefit.

8  The Department of Labor recommends that states have reserves in their trust funds that are at least as large as the highest recent years of UI benefit payout.

9  As of August 25, 2020, 11 states have borrowed $24.4 billion from the federal unemployment account. California, New York, and Texas account for 82% of that borrowing .

10  As shown in Appendix Figure 1, California’s solvency ratio of 0.21 was lower than the other 49 states, the District of Columbia, and Puerto Rico.

Altonji, Joseph, Zara Contractor, Lucas Finamor, Ryan Haygood, Ilse Lindenlaub, Costas Meghir, Cormac O’Dea, Dana Scott, Liana Wang, and Ebonya Washington. “Employment Effects of Unemployment Insurance Generosity during the Pandemic.”  Working Paper (2020).

Anderson, Patricia M., and Bruce D. Meyer. "The effects of firm specific taxes and government mandates with an application to the U.S. unemployment insurance program."  Journal of Public Economics  65, no. 2 (1997): 119-145.

Ganong, Peter, and Pascal Noel. "Consumer spending during unemployment: Positive and normative implications."  American Economic Review 109, no. 7 (2019): 2383-2424.

Ganong, Peter, Pascal Noel, and Joseph S. Vavra.  U.S. Unemployment Insurance Replacement Rates During the Pandemic , no. w27216. National Bureau of Economic Research (2020).

Guo, Audrey. "The effects of unemployment insurance taxation on multi-establishment firms." Working Paper (2020).

Guo, Audrey, and Andrew C. Johnston. "The Finance of Unemployment Compensation and its Consequence for the Labor Market." Working Paper (2020).

Iacurci, Greg. “ This Map Shows Where States Stand on the Extra $300 Weekly Unemployment Benefits. ” CNBC, August 21, 2020. 

Johnston, Andrew C. “Unemployment Insurance Taxes and Labor Demand: Quasi-experimental Evidence from Administrative Data.” Forthcoming at  American Economic Journal: Economic Policy  (2020).

Johnston, Andrew C., and Alexandre Mas. "Potential unemployment insurance duration and labor supply: The individual and market-level response to a benefit cut."  Journal of Political Economy  126, no. 6 (2018): 2480-2522.

U.S. Department of Labor. State Unemployment Insurance Trust Fund Solvency Report 2020.  February 2020.  

Von Wachter, Till. “ Unemployment Insurance Reform: A Primer. ” Washington Center for Equitable Growth. October 2016.   

Appendix  Table A

Source:  US Dept of Labor Significant Provisions of State Unemployment Insurance Laws 2019

*For single workers. Some states offer additional dependent allowances

Appendix Figure 1 - State UI Trust Fund Solvency (as of 1/1/2020)

Source: U.S. Department of Labor Trust Fund Solvency Report 2020

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Essay on Unemployment: 100 to 300 Words

• Updated on  
• Mar 30, 2024

Writing an essay on unemployment provides an opportunity to explore a critical issue affecting societies worldwide. Unemployment, a multifaceted problem, has far-reaching consequences that touch upon various aspects of individuals, families, and nations. In this essay, we will delve into the complexities of unemployment, examine its causes and consequences, discuss government initiatives, and shed light on potential solutions.

This Blog Includes:

What is unemployment, essay on unemployment in 100 words, essay on unemployment in 200 words, essay on unemployment in 300 words, tips to ace in writing an essay.

Must Read: The Beginner’s Guide to Writing an Essay

Lack of jobs leads to unemployment. It is a very serious economic and social concern that is happening all around the globe leading to many social ills. This issue is a major one and hence many governments are trying to address it. When people of a nation are employed, that leads to the economic and social well-being of that nation. To address it, the education system needs to be modeled differently so as to increase the employability of people. In democracies, political parties use unemployment as a core issue in their election manifestos.

Unemployment refers to the condition when individuals, capable and willing to work, are unable to secure gainful employment. It is a pervasive issue across the globe, with varying degrees of impact on societies. Unemployment results in financial instability, and emotional distress, and hampers individual growth. Governments and organizations must collaborate to create opportunities for employment through skill development and policy implementation.

Unemployment, a pressing concern globally, stems from multiple factors that hinder the workforce’s engagement in productive activities. It affects both developed and developing nations, contributing to economic imbalances and social disparities. The consequences of unemployment include reduced income levels, increased poverty rates, and strained government resources. Moreover, the psychological toll it takes on individuals and families can be severe, leading to stress, depression, and strained relationships.

The intricate web of unemployment is spun from a mix of causes, ranging from economic fluctuations to structural shifts in industries. Cyclical unemployment, driven by economic downturns, and structural unemployment, resulting from a mismatch between skills and job openings, are widespread forms. Additionally, technological advancements lead to technological unemployment as machines replace human labour.

Unemployment has cascading effects on societies. Diminished purchasing power affects market demand, thereby impacting economic growth. As unemployment rates rise, so does the burden on social welfare programs and the healthcare system. The phenomenon also fuels social unrest and political instability, making it a challenge governments cannot ignore.

Governments worldwide have initiated strategies to tackle unemployment. Skill development programs, vocational training, and entrepreneurship initiatives are designed to equip individuals with market-relevant skills. Furthermore, promoting labour-intensive industries and investing in sectors with growth potential can generate employment opportunities.

In conclusion, unemployment is a complex issue that necessitates a multi-pronged approach. Governments, industries, and individuals must collaborate to alleviate its impact. Effective policy implementation, education reforms, and the cultivation of entrepreneurial spirit can pave the way towards reducing unemployment rates and fostering a more stable and prosperous society.

Before we dive into the specifics of unemployment, let’s briefly discuss some tips to enhance your essay-writing skills:

• Understand the Prompt: Ensure a clear understanding of the essay prompt to address all its components effectively.
• Research Thoroughly: Gather relevant information from credible sources to build a comprehensive and informed essay.
• Organize Your Thoughts: Create an outline to structure your essay logically, allowing your ideas to flow coherently.
• Introduction and Conclusion: Craft a compelling introduction to engage your readers, and a succinct conclusion to summarize your key points.
• Use Clear Language: Express your ideas using clear and concise language, avoiding jargon or overly complex vocabulary.
• Provide Examples: Illustrate your points with real-life examples to enhance understanding and credibility.
• Edit and Proofread: Revise your essay for grammar, punctuation, and coherence to ensure a polished final draft.

Also Read: Unemployment v/s Underemployment – What’s Worse?

Related Reads:-     

Unemployment refers to the state in which individuals who are willing and able to work are without gainful employment opportunities. It is a condition where individuals seek jobs but are unable to secure them, leading to financial instability and societal challenges.

Unemployment, as discussed in the essay, is a multifaceted issue encompassing the lack of employment opportunities for willing and capable individuals. It explores various forms of unemployment, its causes, far-reaching consequences on economies and societies, and the role of governments in implementing solutions to mitigate its impact.

Unemployment is the term used to describe the situation where individuals of working age are actively seeking employment but are unable to find suitable job opportunities. It signifies a gap between the available workforce and available jobs, often leading to economic and social challenges within a society.

Unemployment emerges as a prominent thread, influencing economic, social, and psychological realms. As we’ve explored in this essay, comprehending the causes and consequences of unemployment is pivotal in devising solutions. Governments, institutions, and individuals must strive collectively to unravel this issue’s complexities and weave a fabric of employment opportunities, stability, and progress. We hope that this essay blog on Unemployment helps. For more amazing daily reads related to essay writing , stay tuned with Leverage Edu .

Manasvi Kotwal

Manasvi's flair in writing abilities is derived from her past experience of working with bootstrap start-ups, Advertisement and PR agencies as well as freelancing. She's currently working as a Content Marketing Associate at Leverage Edu to be a part of its thriving ecosystem.

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How to Cope with the Issues on Poverty and Unemployment

Last Updated: December 18, 2023 References

This article was co-authored by Alex Kwan and by wikiHow staff writer, Kira Jan . Alex Kwan is a Certified Public Accountant (CPA) and the CEO of Flex Tax and Consulting Group in the San Francisco Bay Area. He has also served as a Vice President for one of the top five Private Equity Firms. With over a decade of experience practicing public accounting, he specializes in client-centered accounting and consulting, R&D tax services, and the small business sector. There are 32 references cited in this article, which can be found at the bottom of the page. This article has been viewed 74,474 times.

Unemployment and poverty are linked, since a lack of income makes it hard for people to make ends meet. What can communities and governments do to reduce poverty and unemployment? Whether you’re a student or an activist, we’ve outlined the top strategies and policies recommended by experts to help you understand these complex economic issues. The solutions fall into three major buckets–helping people become more employable, creating more jobs, and supporting governmental programs to stop the cycle of poverty.

Promote education for everyone.

• Donate to scholarship funds. For instance, you can donate to the Children’s Scholarship Fund to support K-8 education in the U.S. at https://scholarshipfund.org/
• Support afterschool tutoring programs and mentorship programs that connect students with caring adults. [5] X Trustworthy Source PubMed Central Journal archive from the U.S. National Institutes of Health Go to source Visit https://secure.givelively.org/donate/afterschool-alliance to donate.
• Give money to funds that pay for transport to and from school. Search online to find local and state funds that support kids near you.

Make job training more accessible.

• Governments can provide federally-funded or state-funded job training programs. These are often run by state workforce development commissions.

Create microfinance programs.

• New studies on the impacts of microfinance question whether it’s a solution that truly benefits the poor. While it may help empower female entrepreneurs living in poverty, microfinance can potentially worsen overall debt. [13] X Research source

Increase jobs in labor-intensive industries.

• Economists find that employing more people (rather than using machines) doesn’t result in the huge drop in productivity you might imagine. [15] X Research source

To address poverty and unemployment, education, job training, microfinance, and counseling must combine with policy transformation. Safety nets must cover all while infrastructure and hiring incentives create good jobs. Healthcare access and affordability need improving too. With coordination across sectors, cycles trapping people in poverty can end.

Invest in infrastructure.

• Beyond just providing jobs, infrastructure development makes the economy more connected. When there’s more infrastructure, it’s easier for people to travel around in order to buy or sell goods and services.
• For instance, to help alleviate poverty and unemployment in the rural Philippines, better access to roads and the internet could help farmers sell their goods. [17] X Research source

Reduce barriers to unemployment insurance.

• Some states specify that only people with a certain work history length can receive unemployment benefits, and adjusting work history requirements could more people eligible. [20] X Research source
• States also could consider eliminating waiting periods for people to receive their unemployment insurance benefits. Currently, 42 states require people to wait 1 week to receive benefits. [21] X Research source
• To receive unemployment benefits, you have to prove you lost your job through no fault of your own. States might consider changing what qualifies as an “acceptable” cause of unemployment. [22] X Research source

Create affordable housing.

• For example, one region might say you have to be 50% below the median income for an area while another region might say you qualify if your income is 80% below the median income.

Ensure access to clean water and sanitation.

• Communities can improve access to water by helping people create water safety plans for keeping water contaminant-free and building water filtration systems and wells. [27] X Trustworthy Source World Health Organization Health information and news provided by the World Health Organization Go to source
• Visit The Water Project ( https://thewaterproject.org/ ) or Charity Water ( https://www.charitywater.org/ ) to donate and support bringing clean water to those in need.

Improve access to healthcare.

• On the provider level, doctors have to understand that patients in poverty might face greater obstacles to getting treatment.
• Patients in poverty may find medications too expensive, may lack transportation to get to the doctor’s office, and may not have a work schedule that lets them easily see a doctor. [29] X Trustworthy Source American Academy of Family Physicians Organization devoted to improving the health of patients, families, and communities Go to source

Offer counseling services to support families in poverty.

• Connect families in need to a Federally Qualified Health Center if they can’t afford to pay for psychological services. [32] X Research source

Increase access to financial services.

• For instance, creating free digital banking services can make it easy for people to access accounts. [34] X Research source
• In the U.S., predatory financial services, like high-cost mortgage firms, have historically targeted Black and Latino communities. Today, these communities are 30-86% more likely to be financially “underwater” as a result of high-cost mortgages. [35] X Research source

Support single-mother households.

• Support single mothers in your community by donating kids’ clothes and toys and contributing staples like canned goods to your local food bank. [37] X Research source
• If you know a single mother, offer to babysit, or carpool to school if you have kids of your own.
• In 2013, federal benefits reduced the poverty rate among single mothers by half.

Improve fairness in criminal justice systems.

• Incarceration negatively impacts communities of color more than white communities.
• Visit The Sentencing Project ( https://www.sentencingproject.org/actions/ ) to take action and connect with state and local partners working towards legal reform.

Expert Q&A

You Might Also Like

• ↑ https://en.unesco.org/news/world-poverty-could-be-cut-half-if-all-adults-completed-secondary-education
• ↑ https://www.oecdbetterlifeindex.org/topics/education/
• ↑ https://educateachild.org/explore/barriers-to-education
• ↑ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC2528798/
• ↑ Alex Kwan. Certified Public Accountant. Expert Interview. 23 April 2021.
• ↑ https://prospect.org/special-report/education-cure-poverty/
• ↑ https://www.americanprogress.org/issues/economy/reports/2018/02/22/447115/better-training-better-jobs/
• ↑ https://www.un.org/africarenewal/magazine/august-2015/microfinance-good-poor
• ↑ https://journals.sagepub.com/doi/full/10.1177/0018726716640865
• ↑ https://www.un.org/development/desa/socialperspectiveondevelopment/issues/employment-and-decent-work.html
• ↑ https://ideas.repec.org/a/sls/ipmsls/v28y20154.html
• ↑ https://www.brookings.edu/research/expanding-opportunity-through-infrastructure-jobs/
• ↑ https://www.imf.org/en/News/Articles/2020/02/06/na020620the-philippines-a-good-time-to-expand-the-infrastructure-push
• ↑ https://www.cbpp.org/research/introduction-to-unemployment-insurance
• ↑ https://www.urban.org/research/publication/how-does-unemployment-affect-family-arrangements-children
• ↑ https://www.cbpp.org/research/federal-budget/cares-act-measures-strengthening-unemployment-insurance-should-continue
• ↑ https://www.booker.senate.gov/news/press/coronavirus-booker-introduces-bill-to-get-unemployment-assistance-immediately-to-laid-off-workers
• ↑ https://www.wpr.org/evers-aims-increase-unemployment-benefits-lower-barriers
• ↑ https://archives.hud.gov/local/nv/goodstories/2006-04-06glos.cfm
• ↑ https://www.hud.gov/topics/rental_assistance/phprog
• ↑ https://news.un.org/en/story/2021/03/1087682
• ↑ https://thewaterproject.org/why-water/poverty
• ↑ https://www.who.int/westernpacific/activities/improving-access-to-safe-water-sanitation-and-hygiene
• ↑ https://www.worldbank.org/en/topic/health/brief/poverty-health
• ↑ https://www.aafp.org/about/policies/all/poverty-health.html
• ↑ https://www.ncbi.nlm.nih.gov/pmc/articles/PMC7525587/
• ↑ https://www.hrsa.gov/opa/eligibility-and-registration/health-centers/fqhc/index.html
• ↑ https://www.policylink.org/sites/default/files/BreakingTheCycle_0.pdf
• ↑ https://www.worldbank.org/en/topic/financialinclusion/overview#2
• ↑ https://www.brookings.edu/testimonies/renewing-communities-and-providing-opportunities-through-innovative-solutions-to-poverty/
• ↑ https://parents-together.org/11-realistic-ways-to-support-single-parents-during-the-covid-19-crisis/
• ↑ https://www.americanactionforum.org/research/incarceration-and-poverty-in-the-united-states/

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Unemployment Essay

500+ words essay on unemployment.

Unemployment is a serious problem among young people. There are thousands of people who do not have any work to do and cannot find work for themselves. Unemployment refers to the situation where a person wants to work but cannot find employment in the labour market. One of the major reasons that contribute to unemployment is the large population of India and the limited availability of resources. In this essay on unemployment, we will discuss all these issues responsible for unemployment in India and how we can overcome this problem. Students must go through this unemployment essay to get ideas on how to write an effective essay on the topic related to unemployment. Also, they can practice more CBSE essays on different topics to boost their writing skills.

Unemployment is measured by the unemployment rate, defined as the number of people actively looking for a job as a percentage of the labour force. The unemployment rate for the year 2013-14 in rural India was 4.7%, whereas it was 5.5% for urban India. In the short term, unemployment significantly reduces a person’s income and, in the long term, it reduces their ability to save for retirement and other goals. Unemployment is a loss of valuable productive resources to the economy. The impact of job loss in rural and regional areas flows through the local community, damaging businesses.

Reason for Unemployment

An unemployed person is one who is an active member of the labour force and is seeking work but is unable to find any work for himself. There are multiple reasons behind the unemployment of a person. One of them is the slow economic growth, due to which jobs in adequate numbers are not created. Excessive dependence on agriculture and slow growth of non-farm activities also limit employment generation. Unemployment in urban areas is mainly the result of substantial rural migration to urban areas. This has also resulted in a labour workforce in cities. The lack of technology and proper machinery has also contributed to unemployment.

The present educational system is based on theoretical knowledge instead of practical work. Thus, it lacks the development of aptitude and technical qualifications required for various types of work among job seekers. This has created a mismatch between the need and availability of relevant skills and training. This results in unemployment, especially among the youth and educated people with high degrees and qualifications. Apart from it, the lack of investment and infrastructure has led to inadequate employment opportunities in different sectors.

Steps to Eliminate Unemployment

Various strategies and proposals have been implemented to generate employment. Many Employment programmes and policies have been introduced and undertaken to boost self-employment and help unemployed people engage in public works. The Government of India has taken several policy measures to fight the problem of unemployment. Some of the measures are the Mahatma Gandhi National Rural Employment Guarantee Act (MGNREGA), National Skill Development Mission, Swarna Jayanti Shahari Rozgar Yojana (SJSRY), Regional Rural Banks (RRBs).

Despite the measures taken by the government, India remains a country experiencing severe unemployment problems. It can be resolved by imparting education in such a way that youth get the necessary skills so as to get employment easily. Setting up various vocational training and vocational courses for undergraduate and postgraduate students will help in finding employment for youth. The government needs to emphasise these courses at the primary level and make them a compulsory part of the curriculum to make students proficient in their early stages of life. Career counselling should be provided within schools and colleges so that students can choose a better career option based on their interests and ability. Government should create more job opportunities for the youth and graduates.

India is a fast-growing economy. There is an enormous scope for improvement in the unemployment sector. The various measures and steps taken by the government to increase the employment rate have succeeded to a great extent. The widespread skill development programmes have gained popularity across the nation. With better enforcement of the strategies, the employment level can be significantly improved. Although, we have to go a long way before we can say that all the people in India will get employment.

We hope this essay on unemployment must have helped students in boosting their essay-writing skills. Keep learning and visiting the BYJU’S website for more study material.

Frequently Asked Questions on Unemployment Essay

Is unemployment still an existing problem in india.

Yes, unemployment is still a serious issue in our country. Steps need to be taken by the government and also by the youngsters in India to improve this situation.

Is it necessary for schoolchildren to be informed about unemployment?

Students at this young age should definitely be informed about this topic as it will motivate them to study and aim for higher scores in exams.

What points are to be added to an essay topic on Unemployment?

Add details about different age groups of people suffering from this state of employment. You can focus on the fact that poverty is an indirect reason for unemployment and vice-versa. Then, suggest steps that can be taken to bring about an improvement in education and increase the percentage of literacy.

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Best Employment Essay Examples

Solutions to the problem of unemployment.

998 words | 4 page(s)

Introduction

Unemployment can be described as the state of being jobless (Leiserson, 2016). The issue has become a crucial concern lately to the extent of even compelling nations to develop frameworks that could be employed to lay a foundation for a sustainable solution. It is in that regard that various intervention measures have been proposed to address the issue. Analysts have been affirmative that the fact that unemployment is caused by human activities means that there are pending solutions that can be developed to address the issue.

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Counterargument The problem of unemployment is difficult to address. Countries have been spending resources and time to pull together different ideas that can resolve the issue with no apparent success. In addition to that, a majority of the economic structures of countries do not offer a good platform for developing measures that assist in creating employment opportunities. “There is no evidence for the effects of unemployment being moderated” (Cunradi, 2012). That means that there are no workable solutions that can be developed and redirected to address then concern. Solutions to the issue of unemployment.

Unemployment has grown into a major socio-economic problem in most world countries (Leiserson, 2016). Apparently, various solutions have been proved useful in as far as providing a robust solution is concerned. Perhaps, it is high time that governments and states should encourage people to venture into innovative sectors such as business activities because it can assist in creating employment opportunities. Apart from that, amongst all the economic activities, industrialization should be prioritized because it provides a remarkable platform for providing employment.

Governments and states should also provide private firms with opportunities for establishing and consequently operating to their full potentials because it can assist in providing job opportunities. Analysts have been affirmative that it is easier for people to find new working opportunities in private companies compared to government agencies thus allowing private sectors to operate with more freedom will prove critical in as far as addressing unemployment issues are concerned. “Unemployment in the United States presents itself today not as a question for theoretical discussion, but as a problem for political and administrative action” (Leiserson, 2016). That means that governments, states, and all economic stakeholders should invest in research studies that can lay a foundational platform for coming up with new ideologies that can help to address the problem of unemployment. Measures should also be imperatively put in place to readjust the education system to incorporate innovativeness because it can assist in providing alternative employment pathways.

Unemployed people should be enlightened about the relevance of taking every job opportunity that is likely to come on their way. Consequently, it has been a typical behavior for a majority of the people who have graduated from college to become selective in choosing between different work positions preferring white collar jobs on end. “Different conceptualizations lead to different evaluations of the same changes in welfare schemes” (Green-Pedersen, 2014). That means that educating the masses will assist in changing their perceptions a great deal. Focus should also be redirected at addressing social evils such as corruption because it leads to the embezzlement of funds that could be redirected at developing job opportunities. Furthermore, unemployment can be solved by establishing a framework that will foresee the retirement age being minimized to reasonable levels to pave the way for the graduates and other groups of fresh energy from college.

Countries should also consider investing in people who are self-employed to provide technical training to their counterparts who have no jobs. The absence of sufficient employment opportunities has been the primary cause of the establishment of individual ventures such as trading activities (Jones, 2012). For that reason, countries and states should designate resources that could be used to support and consequently encourage people who have been innovative enough to establish work opportunities. Additionally, the fact that the core objective of governments of countries is to bolster its production capabilities alongside creating jobs for the people means that laws should be developed to necessitate the implementation of ideas that can help to create employment opportunities.

It is also important that the approaches and beliefs that are used to address the issue of unemployment are changed. Jones (2012) argues that what makes the problem of unemployment increase daily is that “this belief in an unreachable policy may be damaging to social work’s clients because it results in inattention to alternative solutions to unemployment” (Jones, 2012). That means that the development of small cottage industries alongside redirecting investment activities on agriculture and other forms of production should also be encouraged because it will lay a remarkable platform for the establishment of employment opportunities. Other programs such as rural electrification can also provide the people with the necessary tools that they can use to come with new job opportunities. Finally, it is evidently justified that unemployment goes in handy with an increase in population. Thus, developing measures that can be used to educate the people about the significance of population control will be highly welcomed.

Conclusion In conclusion, it is imperatively clear that a lot can be done to address the issue of unemployment. Consequently, it has been tough to come up with useful frameworks that can be implemented to solve the problem. However, cooperation between different stakeholders will prove crucial in as far as the provision of solid solutions will be concerned (Jones, 2012). In fact, it is high time that research studies should be developed to pave the way for investing in sectors that can help to address the problem of unemployment.

• Cunradi, Carol B., et al. “Problem drinking, unemployment, and intimate partner violence among a sample of construction industry workers and their partners.” Journal of Family Violence 24.2 (2012): 63-74.
• Green-Pedersen, Christoffer. “The dependent variable problem within the study of welfare state retrenchment: Defining the problem and looking for solutions.” Journal of Comparative Policy Analysis: Research and Practice6.1 (2014): 3-14.
• Jones, Loring. “The full employment myth: Alternative solutions to unemployment.” Social Work 37.4 (2012): 359-364.
• Leiserson, William M. “The problem of unemployment today.” Political Science Quarterly 31.1 (2016): 1-24.

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205 Unemployment Essay Topic Ideas & Examples

🏆 best unemployment topic ideas & essay examples, 👍 good essay topics on unemployment, 📌 simple & easy unemployment essay titles, 💡 interesting topics to write about unemployment, ✍️ unemployment essay topics for college, ❓ essay questions on unemployment.

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• Unemployment Causes and Effects Essay Cyclical unemployment refers to a state in which claims in the economy fail to offer jobs to people. Hidden unemployment refers to unemployment of prospective workers due to errors made in generating statistics on unemployment. We will write a custom essay specifically for you by our professional experts 808 writers online Learn More
• Youth Unemployment as a Social Issue Different factors have led to the high levels of youth unemployment, with the most widely studied of them being the skills that are available to the unemployed youths.
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• Unemployment and Lack of Economic Opportunity Having the majority of the population employed is critical for the economic and social stability of a nation. The third reason why employment and economic opportunities must be facilitated together is that it impacts the […]
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• Media Coverage of Unemployment Content analysis on the topic of coverage of unemployment in the media allows you to analyze the mood and opinion of society, the tone of expression in the published media, and conclude the nature of […]
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• Unemployment Rate and COVID-19 in Egypt, the UAE, and Bahrain The topic chosen for this study is the influence of COVID-19 on the rate of unemployment in Egypt, the United Arab Emirates, and Bahrain.
• The Impact of Trade Policy on Unemployment According to Dutt, Mitra, and Ranjan, there is a strong link between trade and unemployment, and, therefore, adaptations of various trade policies are bound to impact unemployment indirectly. Dutt, Mitra, and Ranjan note that there […]
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• Unemployment and Recession: Causes and Relationship Another cause of recession is stringent monetary policy and increased cost of oil imports which tend to lower the rate of demand in the economy.
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• Unemployment Within the 20th Century The purpose of this research is about showing the issue of unemployment in the 20th century, the results that it led to, the human struggle against unemployment, and the predictions of unemployment in the future.
• Macroeconomics in Unemployment Frictional unemployment is described as the unemployment that takes place because of the movement of people from one occupation to another.
• Economic Development in Saudi Arabia: Unemployment Amongst Young Saudi Generation This will allow the investigative nature of the study to be attained. The questions will be developed in cognizance to the research topic and will be based on the set objectives.
• Unemployment as the Consequence of the Development of New Technologies. What Should Private Firms and Government Do? The development of new technologies has been considered to be the way to the high level of life on the one hand and one of the main reasons for unemployment on the other hand.
• Relationship Between Unemployment and Crimes Agnew, argue that crime is caused by strain that a person face throughout life, and this can be contributed to the degree of educational inequality in society.
• Global Recession and Unemployment Growth Connection However, the increased unemployment and the collapse of the steel industry in the United States results from the domination of companies at the microeconomic level seeking an absolute advantage at international stage. Similarly, it has […]
• UAE and GCC Economic Analysis: Inflation and Unemployment This is explained by the fact that UAE is less dependent on oil trade, hence, the inflation and unemployment rate in the UAE is lower in comparison with the countries of GCC.
• Teacher Evaluation, Discipline, and Dismissal With help of the findings of the given research, probable ideas on how to improve the existing system of teacher’s evaluation at school can be suggested, which will result in the increase of the efficiency […]
• Gender, Family, and Unemployment in Ontario’s Great Depression The introduction and all the background that Campbell gives are firmly in line with the goals of this course. The first part of the study is the business and the economic history.
• The Future of Unemployment in the United States The significance of unemployment makes it a major issue that neither the federal government nor the citizens can ignore given the fact that is one of the indicators of the strength of the economy.
• The Take-Up of Unemployment Study in USA The take up of unemployment is beneficial because it will enable the living standard of people to increase and contributes to the general performance of the economy. Small business funding ensures that more people are […]
• Financial Position of AT&T Through Downsizing As mentioned, due to the tough economic conditions that were being experienced the world over in the year 2008 and partly through 2009, the company decided to lay off close to 4% of its workforce.
• Downsizing Strategy: The Reasons and Benefits Firstly it is important to note that downsizing has implications to the remaining workforce in terms of confidence and loyalty to the organization.
• Gasoline Prices, Rates of Unemployment, Inflation, and Economic Growth The data which has been queried from the database are related to gasoline prices in California, the unemployment rate in the US, the inflation rate in the US, and Real GDP.
• Pakistan: GDP and Unemployment This shows a clear relationship between the economy of the country and the employment that it is able to generate. This unemployment is increasing in both the rural areas and the urban areas of the […]
• Measuring Unemployment Issues in Society Types of unemployment include; frictional unemployment, cyclical unemployment, seasonal unemployment, and structural unemployment. Seasonal unemployment is a result of the rise and fall of a particular job.
• Macroeconomics and Unemployment The author of the article is Jennifer Steinhauer and the source where the article is taken from is the newspaper “The New York Times”, issued on September 18, 2009, that is why the information under […]
• Outsourcing, Downsizing, and Delayering On the whole, outsourcing can be defined as transferring some of the firms activities to a third party or subcontractor for a certain period of time.
• The US and the Philippines: Unemployment and Inflation In cyclical terms, this rising inflation is actually the product and not the cause of these record-high oil prices and the idea that the U.S.had failed to think of the above-discussed alternatives to the energy […]
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• Downsizing. Planning and Executing Strategies To define the extent of downsizing and the rearrangement of roles and responsibilities that will be assigned to the rest of the staff, a company’s key goals will have to be determined, including the domains […]
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• How Falling Unemployment Affect College Enrollment It is common to associate the relationship between unemployment and college enrollment with the financial crisis of 2007-2008 and the Great Recession on the border of the 2000s-2010s.
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• Business Cycle and Unemployment The other phase is the recovery phase which occurs after the recession and is seen by a steady rise on GDP.
• Due Process and Fair Dismissal of Teachers in Texas Specifically, the due process does not explain why a teacher should be dismissed but provides the procedures that should be followed by a school to dismiss a teacher.
• Unemployment Types in Spain and the United States Firms and companies in Spain have no requirement to hire more people and this is because of the state of the economy.
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• Downsizing: Reasons and Consequences The reason for the perceived lack of alternatives may lie in the lack of creative thinking on the part of the manager, however.
• Unemployment and Suicide Rates Correlation in the US The problem of correlation between the levels of unemployment and suicide rates has been previously investigated in the research literature. However, the association between unemployment and suicide rates was discovered in the data collected during […]
• Foreign Direct Investment Role in Unemployment The following report explores the evidence behind the claims of both the advocates and the opponents of globalization and one of its prominent manifestations foreign direct investment to determine whether its effect could be used […]
• Unemployment as a Local Economic Issue The evaluation of these aspects is crucial to the current research for the reason that it would help highlight the weak spots of the modern employment apparatus and suggest novel ways of dealing with unemployment.
• The Relationship Between Fiscal Spending and Unemployment The Obama administration passed the American Recovery and Reinvestment Act of 2009 in response to the financial crisis caused by the disappearance of the $5 trillion household wealth of the country in just 12 weeks.
• Organizational Downsizing and Survival Syndrome However, in case the rate of mass lay-offs following the downsizing of many firms exceeds the number of newly opened companies, the move to reduce the size of the available workforce is said to produce […]
• Unemployment as National Economic Health Indicator Unemployment is considered a key indicator of national economic health as it directly reflects on the efficiency of government policy and the population purchasing potential. The concept of the natural level of employment in the […]
• Unemployment as a Sorting Criterion The researchers developed a study to evaluate the relationship between the length of unemployment and the stigmatization attitude associated with employers when they handle the affected job applicants.
• Spain and Its Unemployment Problems The low rate of employment is the most renowned characteristic of the Spanish economy as per the close of the Twentieth Century.
• Unemployment Insurance Policy in the United States Despite some of the efforts embraced by different communities, the issue of unemployment has continued to affect the welfare of many citizens in the country.
• African Americans’ Unemployment Rate in 2014 The African American racial group has the highest rate of unemployment in the United States, continuing a longstanding pattern whereby Blacks always find themselves at the periphery of the American labor force.
• Unemployment Reduction Strategy for Chesapeake, VA A comprehensive unemployment reduction strategy implemented within Chesapeake, VA, would drive the current unemployment rate of 4. The unemployment rate exacerbates local economic concerns in terms of healthcare costs, household income, and living standards.
• Employment Status, Dismissals and Exit Interviews Secondly, the status helps to determine the obligations of the employer towards the individual, and the rights of the individual. For example, only employees may present claims of unfair dismissal by an employer and the […]
• Dismissal Meeting: The Art of Delivering Bad News Therefore, sympathy toward the employee and the recognition of the latter’s contribution to the company’s growth, as well as the acknowledgment of their professional expertise, must be viewed as the foundation for the communication.
• Policy: The Aftermath of War – Servicemen Facing Unemployment However, after retiring from their job with disabilities, the most significant issue that faces the transitioning service individuals to reintegrate effectively with the civilian society has been the need to find and cultivate organizational attachments […]
• US Teachers’ Rights, Dismissal, and Discrimination First of all, the principal violates the First Amendment since she deprives the woman of her freedom of expression and the ability to speak freely.
• Unemployment Forms and Causes: Economic Standpoint Unemployment could be defined as the state in the economy where there are many people who are willing and able to work but they do not get a chance to employ their skills to the […]
• Unemployment in Sydney: Spatial Patterns Analysis In contrast, such areas as North West Sydney or Upper North Shore that have the lowest level of unemployment and the highest level of household income.
• Unemployment in Abu Dhabi and Dubai: Causes and Solutions Various studies have concluded that there is a correlation between the level of unemployment in the country and the strength of the economy.
• Unemployment Rate as the Biggest National Economy Challenge The United States has the largest national economy and it is the largest trading nation in the world. The recent financial crisis of 2008 increased the rate of unemployment, and impacted the economy negatively.
• The Level of Unemployment Among Veterans Veterans are some of the most important segments of the USA’s population, bearing in mind that they sacrificed their lives and time to serve the nation in the past.
• The US Unemployment Benefits Evaluation The timeliness of these statistics is essential for the gauging of the labor market health and in extension, the performance in of the economy in general. The analysis of the data provides for the selection […]
• Unemployment Issue in the United States Though a shrinkage in the number of vacancies and the rapid increase in the number of part-time jobs have had their toll on the unemployment rates, the lack of vacancies still remains the key cause […]
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Unemployment Essay for Students and Children

500+ words essay on unemployment.

Unemployment is a very serious issue not only in India but in the whole world. There are hundreds and thousands of people out there who do not have employment . Besides, the problems of unemployment are very severe in India because of the growing population and demand for jobs. Moreover, if we neglect this problem then it will be going to become the reason for the doom of the nation.

What is Unemployment?

Unemployment refers to a situation in which a skilled and talented people wanted to do a job. But cannot find a proper job due to several reasons.

Types of Unemployment

Now we know what is unemployment but unemployment does not only mean that the person does not have a job. Likewise, unemployment also includes people working in areas out of their expertise.

The various types of unemployment include disguised unemployment, seasonal unemployment, open unemployment, technological unemployment, structural unemployment. Besides, some other unemployment is cyclic unemployment, educated unemployment, underemployment, frictional unemployment, chronic unemployment, and casual unemployment.

Above all, seasonal unemployment, under unemployment, and disguised unemployment are the most common unemployment that is found in India.

Reasons for Unemployment

In a country like India, there is much reason for a large section of the population for being unemployed. Some of these factors are population growth, slow economic growth , seasonal occupation, slow growth of the economic sector, and fall in the cottage industry.

Moreover, these are the major reason for unemployment in India. Also, the situation has become so drastic that highly educated people are ready to do the job of a sweeper. Besides, the government is not doing his work seriously.

Apart from all these, a large portion of the population is engaged in the agricultural sector and the sector only provides employment in harvest or plantation time.

In addition, the biggest reason of unemployment in India is its vast population which demands a large number of jobs every year which the government and authorities are unable to provide.

Consequences of Unemployment

If things will go on like the current scenario then unemployment will become a major issue. Apart from this, the following things happen in an economy which is an increase in poverty, an increase in crime rate, exploitation of labor, political instability, mental health, and loss of skills. As a result, all this will eventually lead to the demise of the nation.

Get the huge list of more than 500 Essay Topics and Ideas

Initiative by Government

The government has taken the problem very seriously and have taken measures to slowly reduce unemployment. Some of these schemes includes IRDP (Integrated Rural Development Programme), DPAP (Drought Prone Area Programme), Jawahar Rozgar Yojana, Employment Assurance Scheme, NRY (Nehru Rozgar Yojana), Training for self-Employment, PMIUPEP (Prime Minister’s Integrated Urban Poverty Eradication Program), employment exchange, Employment Guarantee Scheme, development of organized sector, small and cottage industries, employment in forging countries, and Jawahar Gram Samridhi Yojana and few more.

Besides, these schemes the government also make some rules flexible, so that employment can be created in the private sector also.

To conclude, we can say that the problem of unemployment in India has reached a critical stage. But, now the government and local authorities have taken the problem seriously and working on it to reduce unemployment. Also, to completely solve the issue of unemployment we have to tackle the main issue of unemployment that is the vast population of India.

FAQs about Unemployment

Q.1 Why there is a problem of unemployment in India? A.1 Due to overpopulation and lack of proper skills there is a problem of unemployment in India.

Q.2 Define Disguised unemployment? A.2 Disguised unemployment refers to a form of employment in which more than the required numbers of people work in industry or factory. And removing some employee will not affect productivity.

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How can technology reduce youth unemployment?

.chakra .wef-1c7l3mo{-webkit-transition:all 0.15s ease-out;transition:all 0.15s ease-out;cursor:pointer;-webkit-text-decoration:none;text-decoration:none;outline:none;color:inherit;}.chakra .wef-1c7l3mo:hover,.chakra .wef-1c7l3mo[data-hover]{-webkit-text-decoration:underline;text-decoration:underline;}.chakra .wef-1c7l3mo:focus,.chakra .wef-1c7l3mo[data-focus]{box-shadow:0 0 0 3px rgba(168,203,251,0.5);} Duncan Luke

.chakra .wef-9dduvl{margin-top:16px;margin-bottom:16px;line-height:1.388;font-size:1.25rem;}@media screen and (min-width:56.5rem){.chakra .wef-9dduvl{font-size:1.125rem;}} Explore and monitor how .chakra .wef-15eoq1r{margin-top:16px;margin-bottom:16px;line-height:1.388;font-size:1.25rem;color:#F7DB5E;}@media screen and (min-width:56.5rem){.chakra .wef-15eoq1r{font-size:1.125rem;}} Future of Work is affecting economies, industries and global issues

.chakra .wef-1nk5u5d{margin-top:16px;margin-bottom:16px;line-height:1.388;color:#2846F8;font-size:1.25rem;}@media screen and (min-width:56.5rem){.chakra .wef-1nk5u5d{font-size:1.125rem;}} Get involved with our crowdsourced digital platform to deliver impact at scale

Stay up to date:, future of work.

The digital economy has taken over our world. Upstarts like Uber, Airbnb, Kickstarter and Square are proving that we live in a world where technology pioneers and the monetisation of disruptive technologies win consumers over with innovative thinking.

This raises the question of how such market solutions can be used to tackle some of society’s most pressing issues – specifically, the  60% of young people in developing regions who are either unemployed, not studying, or engaged in irregular employment, according to  ILO . Africa is a prominent example of this, with its exploding youth population.

Judith Rodin, President of The Rockefeller Foundation, suggests that the number of young people between the ages 15 and 24 in Africa will double from 200 million to 400 million by 2045. It is estimated that 200 million youth will enter the formal sector, which is a great opportunity given that new ways of employment are created by private sectors as a priority. Sadly, based on current projections, only 3-5 million jobs will be created for the 10-12 million youth eligible to enter the formal economy annually, leaving approximately half of these youth with little prospect for employment. I suggest that technology can be used to turn the tide on the continued economic marginalization of the youth.

The digital economy promises a wealth of decision ready data at the fingertips of companies, governments and even international civil society organisations. What about the social entrepreneurs and small, but impactful, civil society organisations where limited tools are available?

In today’s economy, civil society organisations are left to relieve the pain felt by marginalized youth, women and children, while government points to the private sector to create the necessary jobs and the private sector in turn points to the government to create and implement the necessary policies to allow it to create jobs. But no one has asked which jobs must be created, for who, how and why – especially when it comes to tackling these inequalities.

Perhaps digital tools are able to provide insights and an understanding of the future of youth empowerment and employment. First, data collection (personal, market and other sources of big data) must be improved, and so must the analysis of that data. Finally, decision making must then be based on the employability, in terms of soft skill attributes, of the person. As digital tools become more efficient in solving daily productivity problems and become more adaptive to learned situations, we’ll progress to a stage where digital tools can be deployed to solve some of society’s greatest challenges, including unemployment and/or employability.

Youth unemployment and empowerment can be understood by gaining insight into the employability of individuals at scale – as youth empowerment initiatives can be quantified and best practises learnt and shared. Larger social media networks have been doing this for advertising since their inception, leading to extremely successful business models. Can the same practices not be applied to civil society organisations, by designing digital tools which effectively address their unique requirements?

What is being done

Private sector : Google and Richard Branson are trying new employment models where they employ 2 people part time instead of 1 person full time (more about that can be read here ). This allows the employee time to pursue other passions and personal interests, while the employer is able to reduce their staff overheads.

Coca Cola is pioneering a bold strategy to work out how to add value to their extensive business and supply chain network, through a programme called 5by20. 5by20 is The Coca-Cola Company’s global commitment to enable the economic empowerment of 5 million women entrepreneurs across the company’s value chain by 2020. The programme is aimed at the small businesses the company works with in over 200 countries around the world. From fruit farmers to artisans, this initiative aims to help women overcome the barriers they face to business success. 5by20 and The Coca-Cola Company are proud to be giving millions of women opportunities to build their businesses, support their families and build their communities, while inspiring more to do the same.

Civil society: An increasing number of foundations and funds are turning their focus to youth networks that address their own problems in their own communities, tasking them to come up with solutions which they can support.

Another overlooked solution is placing youth with local civil society organisations, many of which seek support by means of volunteerism. This is arguably one of the most impactful ways to build social cohesiveness. To this effect, it has been proven in the  US and in the  UK that ‘volunteerism’ is able to increase a young person’s employability by up to 40%.

How the Global Shapers are using technology to solve this

After becoming a winner of the Global Shapers Community ‘Coca Cola Shaping a Better Future Challenge’ at the World Economic Forum in Davos in 2014, the Cape Town Hub of the Global Shapers Community was able to successfully launch  The Social Collective , a Global Shaper Hub project turned for-profit technology start-up. This comes off the back of work the Hub was doing with some South African government agencies in providing a technology to increase and track the employability of young people, specifically through volunteering.

The Social Collective is now developing a digital Monitoring and Evaluation (M&E) tool which makes M&E more meaningful – to organisations and individuals – by providing specialist software and consulting services. Monitoring and Evaluation (reporting) is required by donors of civil society organisations, however few digital tools exist to increase productivity or programme management (from data collection to analysis), or for beneficiaries to track their personal development and employability gained through structured development programmes. The Social Collective responds to this need.

Many of the beneficiaries of civil society organisations are digitally engaged and are able to check in with their friends on a daily basis via social media. However, civil society organisations still have issues tracking and getting feedback from the same individuals (from programme managers to beneficiaries).

As a digital tool which is available on mobile phone and even via SMS, The Social Collective gives civil society organisations access to their data so that they can gain insight into the livelihood and personal, professional and independent development of individuals supported by their programmes, which gives rigour to intuition. Beneficiaries, on the other hand, can easily track the skills that they have acquired and the hours spent acquiring each skill. Then policymakers and the private sector can begin to answer the question: which jobs must be created, for who, how and why.

This article is published in collaboration with Global Shapers . Publication does not imply endorsement of views by the World Economic Forum.

To keep up with Forum:Agenda  subscribe to our weekly newsletter .

Author: Duncan Luke is founder of the Social Collective and a Global Shaper from the Cape Town Hub.

Image: Young visitors look at the bourse at the Tokyo Stock Exchange in Tokyo March 3, 2014. REUTERS/Issei Kato.

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World Economic Forum articles may be republished in accordance with the Creative Commons Attribution-NonCommercial-NoDerivatives 4.0 International Public License, and in accordance with our Terms of Use.

The views expressed in this article are those of the author alone and not the World Economic Forum.

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Suggestions to Solve Unemployment Problem

Following are the suggestions to solve unemployment problem :

(i) Change in industrial technique:

Production technique should suit the needs and means of the country. It is essential that labour intensive technology should be encouraged in place of capital intensive technology.

(ii) Policy regarding seasonal unemployment:

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Seasonal unemployment is found in agriculture sector and agro based industries.

To remove it:

(a) Agriculture should have multiple cropping,

(b) Plantations, horticulture, dairying and animal husbandry should be encouraged,

(c) Cottage industries should be encouraged.

(iii) Change in education system:

Educational pattern should be completely changed. Students who have liking for higher studies should be admitted in colleges and universities. Emphasis should be given on vocational education. Qualified engineers should start their own small units.

(iv) Expansion of Employment exchanges:

More employment exchanges should be opened. Information regarding employment opportunities should be given to people.

(v) More assistance to self employed people:

Most people in India are self employed. They are engaged in agriculture, trade, cottage and small scale industries etc. These persons should be helped financially, providing raw materials and technical training.

(vi) Full and more productive employment:

The main objective of county’s employment policy should be to increase employment opportunities and productivity of labour. Govt. should adopt a policy that provides employment to all people.

(vii) Increase in Production:

To increase employment, it is essential to increase production in agriculture and industrial sectors. Development of small and cottage industries should be encouraged.

(viii) More importance to employment programmes:

In five year plans more importance should be given to employment. The programmes like irrigation, roads, flood control, power, agriculture, rural electrification can provide better employment to people.

(ix) High rate of capital formation:

Rate of capital formation in the country should be accelerated. Capital formation should be particularly encouraged in such activities which generate greater employment opportunities. Capital output ratio should be kept low.

(x) Industries in co-operative sector:

Industries in co-operative sector should be encouraged. Kerala Govt.’ set up a textile mill covering 600 unemployed persons on co-operative basis. This is a novel approach to fight against unemployment. Different State Govt. should take necessary steps in this direction.

(xi) Decentralisation of industrial activity:

Decentralisation of Industrial activity is necessary to reduce unemployment. If industrial activities are centralised at one place, there will be less employment opportunities in the under developed areas. So Govt. should adopt such policies which encourage decentralisation of industrial activity.

(xii) Population control:

The growth of population should be checked in order to solve unemployment, problem. Family planning programme should be implemented widely and effectively.

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Dr. Chapa is a U.S. Air Force officer and the author of “Is Remote Warfare Moral?”

The window to apply to be a NASA astronaut — a window that opens only about every four years — closes this month, on April 16. Though I’ve submitted an application, I don’t expect to make the cut.

The educational requirements for the astronaut program are clear: Applicants must possess at least a master’s degree in a STEM field (science, technology, engineering, and mathematics), a doctorate in medicine or a test pilot school graduate patch. Though I have a Ph.D., it’s in philosophy. (And though I’m an Air Force pilot, I’m not a test pilot.)

I hesitate to tell NASA its business. But I think its requirements are closing the astronaut program off from important insights from the humanities and social sciences.

Of course, the requirement for astronauts to have technical training makes some intuitive sense. NASA was founded in 1958 “to provide for research into problems of flight within and outside the earth’s atmosphere.” Who better to solve flight problems than scientists and engineers? What’s more, NASA’s space missions have long conducted science experiments to learn how plant and animal life behaves in the far-flung emptiness between us and the moon.

But the need for STEM in space might be waning — just as the need for humanities and the social sciences waxes. After all, the “problems of flight” that once tethered us to this planet have largely been solved, thanks in no small part to all those scientist and engineer astronauts who blazed the trail to space.

By contrast, the future of our relationship with the cosmos — a colony on the moon? Humans on Mars? Contact with intelligent alien life? — will require thoughtful inquiry from many disciplines. We will need sociologists and anthropologists to help us imagine new communities; theologians and linguists if we find we are not alone in the universe; political and legal theorists to sort out the governing principles of interstellar life.

Naturally, some scholars can study these topics while still earthbound. But so can many of today’s astronauts, who often end up working on projects unrelated to their academic training. The idea behind sending people with a wider array of academic disciplines into the cosmos is not just to give scholars a taste of outer space, but also to put them in fruitful conversation with one another.

My own discipline, philosophy, may be better suited for this kind of exploration than some might think. To be sure, much philosophy can be done from an armchair. Descartes arrived at his famous conclusion, “I think, therefore, I am,” while warming himself by the fire and, as he noted, “wearing a winter dressing gown.”

But some of the greatest philosophical breakthroughs occurred only because their authors had firsthand experience with extreme and uncomfortable conditions. We might not have the Stoic philosophy of Epictetus had he not faced the hardship of slavery in Nero’s court. We might not have Thomas Hobbes’s “Leviathan” (and his principle of the “consent of the governed,” so central to the American experiment), but for his flight from the English Civil War. And we might not have Hannah Arendt’s insights on the “banality of evil” had she not attended the trial of Adolf Eichmann, a chief architect of the Holocaust.

Not all philosophers who want to learn what it means to be human in this vast and expanding universe need to experience living in space. But perhaps some of us should.

Throughout the history of Western philosophy, space has often served as stand-in for life’s deepest truths. Plato thought that the things of this world were mere images of true reality, and that true reality existed in the heavens beyond. What inspired admiration and awe in Immanuel Kant was not just the moral law within all of us but also the “starry heavens above.” The Platos and Kants of today are in a position to take a much closer look at those very heavens.

In general, the work of philosophy is to ask, “And suppose this proposition is right, what then?” When faced with a proposition — say, “The mind and body are separable,” or “One must always act to achieve the greatest happiness for the greatest number” — the philosopher takes another step and asks, “What are the implications of such a view?”

Though Earth has been our only home, it may not be our home forever. What are the implications of that proposition? What might that mean for our conception of nationhood? Of community? Of ourselves and our place in the world? This would be the work of space philosophers.

These days, unfortunately, the prestige of STEM continues to eclipse that of the social sciences and humanities. It seems unlikely that NASA will buck this trend.

That would be bad news for me, personally — but I think also for humanity at large. One day we may all echo Jodie Foster’s character in the sci-fi movie “Contact . ” When the mysteries of space-time were unfurled before her, all she could manage to say was, “They should have sent a poet.”

Joseph O. Chapa ( @JosephOChapa ) is a U.S. Air Force officer and the author of “Is Remote Warfare Moral?”

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Fortune’s Best Companies to Work For credit trust and culture—not pay and benefits—for high employee satisfaction

Good morning.  As the U.S. election heats up, many corporate leaders are backing down from their commitments to so-called “ESG” topics—climate, diversity, speaking out on social issues. They want to avoid being branded a “woke” CEO or getting caught in political crossfire.

But for the best companies, this discussion has never been about politics or adhering to some alphabet mandate. It’s about how you lead a great company in an economy where people are your most important asset and where engaging and inspiring people is the route to business success.

I spent an hour earlier this week with three of the best of this breed, in a webinar Fortune held in partnership with UKG , timed to the release of Fortune ’s 27th annual 100 Best Companies to Work For list. (You can find the list here .) Three CEOs ran companies on the list— Hilton (No. 1), Edward Jones (No. 31) and Delta (No. 94). But what I found interesting was that none of them focused on a splashy pay and benefit package, and indeed two of them achieved their success while recovering from the devastating effects of the pandemic.

How did they do it? Some excerpts from the conversation:

“ We used to write a lot about the perks. But what we know is that a great workplace is defined by trust— the trust that we have for the people that we work with. We want to be respected. We want to be communicated with in an honest way. We want to be treated in a fair and equitable way. We want to work with people that we enjoy working with and we expect leaders to add people to teams that are going to add to that enjoyment. And we want our work to have special meaning, which means, when we go to work, our personal purpose is somehow fulfilled by the work that we do. ”

—Michael Bush, CEO, Great Place to Work ( Fortune ‘s partner on the Best Companies list)

“ We’re in a service industry, and our job is delivering exceptional experiences to our customers all the time … If I want to do that, and I want to do it better than our competitors and deliver that  alpha . My team has to be inspired. They have to feel part of something bigger than them. They have to understand what the purpose is and understand how they fit into it and trust it. They have to feel good about it. And when they do feel good about it, they feel empowered. They give more effort, which translates into  alpha  and delivering better experiences for customers. ”

—Chris Nassetta, CEO, Hilton

“ Why are we here? Why do we get up every morning? Why do we continue to be resilient in the face of so many things that are changing for our clients and for us as professionals. Well, it’s because it really matters. It really matters in the lives of millions and millions of people that we are entrusted with their assets, with their hopes and dreams, with their financial plans. And so that trust, that human connection is very purposeful.  “

—Penny Pennington, Managing Partner, Edward Jones

“ Trust is foundational, as both Chris and Penny  expressed well. It sits at the core of culture. It sits at the core of our business. Our customers trust us with respect to their lives, you know. Every day we put 500,000 people on our planes, and we take the very best care of them to get them safely and comfortably to their destination, and we do it 5,000 flights a day, with over 100,000 employees scattered around the world. Our employees have to know we have their back .”

—Ed Bastian, CEO, Delta.

More news below.

Alan Murray @alansmurray [email protected]

South Korea’s elections

South Korea voters rejected President Yoon Suk Yeol’s conservative party in legislative elections on Wednesday. Korea’s opposition Democratic Party is on track to win over 170 seats in the legislature, just short of a super majority that can override presidential vetoes. Yoon has tried to deepen Korea’s security relationships with partners like the U.S. and Japan, but has stumbled in implementing domestic policy changes, like tax cuts and eased business regulations. Reuters

Simon & Schuster turns 100

Simon & Schuster celebrated its 100th anniversary on Tuesday, as the publisher's new owner KKR invests in new imprints and hires more editors. Fears that KKR would gut the publisher haven’t been born out: “That’s not how you deliver a return on investment in the current world,” says Richard Sarnoff, KKR’s chairman of media and chair of Simon & Schuster’s board. The New York Times

McKinsey layoffs

McKinsey will cut around 360 jobs globally, primarily in departments like design, data engineering, and software. Traditional consultants aren’t affected by the layoffs. Consulting firms are warning that their usual corporate clients are starting to pull back on long-term spending. Bloomberg

AROUND THE WATERCOOLER

Exclusive: Wiz acquires Gem Security by Allie Garfinkel 

SEC moves to sue Uniswap in bid to hobble fast-growing DeFi sector by Jeff John Roberts

A German Rust Belt? As Chinese EVs like BYD swarm Europe’s key markets, historic examples of deindustrialization pose a warning to the continent’s carmakers by Ryan Hogg

Engineers at Baltimore’s fallen port are working so diligently, they expect to restore service months earlier than expected by Dylan Sloan

French IT firm Atos was once a crown jewel valued at $15 billion. Now, it’s drowning in debt, and the government is helping it stay afloat by Prarthana Prakash

How a ‘rebel’ hire at Autodesk ascended to the company’s top job by Fortune Editors

T his edition of CEO Daily was curated by Nicholas Gordon. 

This is the web version of CEO Daily, a newsletter of must-read insights from Fortune CEO Alan Murray. Sign up to get it delivered free to your inbox.

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The changing of the conservative mind in recent years could hardly be captured more pithily than in the headline of a recent op-ed: “Why I believe in industrial policy — done right.” So opined Sen. Marco Rubio for The Washington Post and, at greater length, for National Affairs.

Note that I’m not addressing the changing of the conservative heart. Calling lawfully convicted violent criminals such as the Jan. 6 rioters “hostages” speaks more to the sad and profound changes of heart on much of the right.

What I’m referring to, rather, are the ideas, arguments and principles that once defined conservatism intellectually, among them rejection of the kind of government intervention in the economy that the Florida Republican now apparently favors.

Modern conservatism — the sort associated with Barry Goldwater, William F. Buckley, George Will, Thomas Sowell, Ronald Reagan and to some extent Rubio when he first came to Washington — once regarded central economic planning and everything associated with it, including “industrial policy,” to be dangerous folly. Buckley’s 1955 mission statement for The National Review declared: “Perhaps the most important and readily demonstrable lesson of history is that freedom goes hand in hand with a state of political decentralization, that remote government is irresponsible government.” He also noted that the “competitive price system is indispensable to liberty and material progress.”

This conviction can be traced back to Edmund Burke and Adam Smith, but it became a defining principle on the American right during the Cold War, against the backdrop of the rise of the Soviet Union as well as the domestic programs of Franklin Roosevelt’s New Deal and Lyndon Johnson’s Great Society.

There are many strands to the conservative argument against state efforts to shape the economy. One is the “knowledge problem,” a phrase adapted from Nobel Prize-winning economist Friedrich Hayek’s brilliant 1945 essay “The Use of Knowledge in Society.”

The knowledge problem, simply put, is that society, including the market, is too complex and too dynamic for government experts to reliably direct it from afar. In a free market, prices capture information that even the best data-gatherers can’t. The closer you are to the problem, the closer you are to the solution.

Public choice theory — what another Nobel laureate economist, James M. Buchanan, called “politics without romance” — adds another layer of reasons to distrust central planning. Government experts and regulators are often “captured” by the industries or activists most affected by their policies. Also, once politicians get involved, policy priorities multiply — extending to boosting employment, expanding diversity, favoring certain states or districts, protecting specific industries and so on — and the government’s stated goals become pretexts for other motives. “Crises” — pandemics, war, unemployment, environmental problems — become excuses to reward favored constituencies.

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Take President Joe Biden’s recent announcement that he would rebuild Baltimore’s collapsed Francis Scott Key Bridge both “as rapidly as humanly possible” and “with union labor and American steel.” Well, which is it?

That brings us to Rubio. Take it from a longtime columnist, you can’t always blame writers for the headlines mischievous editors put on our articles. But “Why I believe in industrial policy — done right” perfectly captures the senator’s argument and the trouble with the broader right-wing fad for central planning.

Oh, you want to do it right? Well, that changes everything!

I mean, if only someone had told Hayek and Buchanan that their objections could be answered by just “doing it right.”

The change in the conservative mind goes beyond industrial policy. It’s really about the use of state power generally. Too many Republicans no longer have any problem — moral or otherwise — with government imposing its will on society, so long as the “right” people are doing it “right.” The knowledge problem, they seem to believe, is confined to the left wing.

This is the core conceptual failing of Rubio’s argument, but there are others.

We used to say the left invented crises and distorted facts to justify expanding government. The same can now be said of the right. Rubio suggests that until very recently, America embraced “unfettered free trade.” This is not only untrue but, as Reason Magazine’s Eric Boehm suggested, a particularly strange assertion by a leading defender of Florida sugar subsidies.

Rubio also states that American manufacturing has suffered “decades of neglect” and that the “collapse of American manufacturing has ... done incalculable harm to our nation’s social fabric.” What collapse? While it’s true that U.S. industrial employment has declined — mostly thanks to automation, not trade — industrial output has been increasing for a century.

I agree with Rubio that we should spend more on defense for national security purposes. But Rubio wants such spending to also mend the nation’s social fabric and serve as a jobs program.

I don’t share the senator’s confidence that Washington could do that if only people like him were in charge.

Jonah Goldberg is editor-in-chief of The Dispatch and the host of The Remnant podcast. His Twitter handle is @JonahDispatch.

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