Unemployment in the Philippines

Ibaez, Aila Irizsa C. BSBio-2

Ms. Hazel Bellezias Instructor

Contents

Page

I.

Introduction 3 Major Problems with Unemployment.5 Solutions on Unemployment .........6 Conclusion ....7 References .7

II.

III.

IV.

V.

Factors Behind High Unemployment in the Philippines

I.

Introduction

There are always some people who are unemployed in our community. This is because of the four different types of unemployment. These are frictional, seasonal, cyclical and structural. This term paper will explore briefly over what the different types of unemployment are, and then in depth, cyclical and structural unemployment will be analyzed. This is to give an outline and to evaluate different policies designed to correct these two types of unemployment. The term paper is then concluded with the economic effects that unemployment has on the economy. One case of unemployment, knows as frictional unemployment, is voluntary. Frictionally unemployed workers have chosen to move from one job to another to seek better pay, or to look for better opportunities. The other unemployment categories are involuntary, because people have been displaced from their job. Seasonal unemployment affects occupations such as fruit pickers, fishermen and shearers, where they are only employed during certain times of the year because of the nature of their work. Both frictional and seasonal unemployment are usually short-term unemployment. Cyclical unemployment occurs in the downswing phases of the trade cycle. When the level of spending in the economy is insufficient to purchase the goods and services for sale, firms will find it necessary to put off some of their labor. Cyclical unemployment rises and falls in line with changed in economic activity. In periods of high economic activity there are more job vacancies and the unemployment rate decreases and vice versa. In these periods of low economic activity it tends to be associated with rapid rises in unemployment, but recovery from recessions tends to take longer periods of time to feed through into the market for labor. The fact that cyclical unemployment rises quickly, but falls slowly, might have something to do with structural unemployment if employers replace labor with more productive capital equipment to save costs when the economy is tight. The recession in 1990-92 has been characterized as an important case of cyclical unemployment. Recessions are reduced levels of demand for goods and services. Unemployment follows as costs must be reduced. So from this, businesses tend to react by employing machinery instead of labor. Structural unemployment is the impact of changes in the framework of the economy on the
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demand for labor. Structural change is caused by technological change, which usually means that the demands for some types of workers increase, while others find their skills are no longer relevant. Examples of these are computer operators replacing typists, bank tellers replaced by automatic teller machines and driveway attendants replaced by self-serve petrol pumps. Structural change is also caused by changes in consumer demand. This results in job losses in some occupations and gains in others. An example of this is compact discs which replace records. This lead to workers not needed in the record factories. For a few people, structural unemployment will be temporary. Workers willing and able to be retrained with new skills will find that new categories of jobs emerge. For example, unemployed typists may find new jobs in desktop publishing. But it is very likely that a large number of those who are unable or unwilling to retrain may find that they will be unemployed for a longer period of time. Inflation may also have been a cause of structural unemployment, if it contributed to business uncertainty and rising costs. Increased costs which are not matched by higher production make it more difficult for firms to operate profitably. These different types of unemployment have serious economic and social effects. Unemployment represents a waste of productive labor resources. Unused or idle resources make no contribution to production, leading to a less income. The economy will produce less goods and services that it potentially could if resources were fully employed. High unemployment creates pressure on the government budget. Unemployment reduces the total taxation receipts the government receives because people without an income do not pay income tax. This places a drain on the government funds as the unemployed claim the Job Search Allowance. As well as this monetary cost, unemployment has a real cost. When more government money is devoted to welfare, there is less available for other community wants such as education and health. From an economic point of view, unemployment may bring some benefits, as well as costs. Frictional unemployment is often a reflection of the fact that workers want to move to more highly paid jobs. Unemployment is also a sign that structural change is taking place. This usually brings benefits in the long run. For example, employment opportunities may decline in agriculture, but emerge in other industries. Therefore, the labor market is adapting to changes in the economy. The social costs associated with unemployment are significant. For the individual, unemployment may bring about a sense of frustration and failure .For many people, being unemployed means living in poverty with a loss in status and self esteem. The social costs of
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unemployment can manifest themselves in a variety of ways such as deteriorating physical health, psychiatric illness, increased death rates and suicides, decreased stability and increased crime.

II. Major Problems with Unemployment

The number of available jobs isn't enough to support the number of people in our country. You never know if your job is secure or if you are going to be fired or laid off. One person can be laid off many times and lose several different jobs. Having so many unemployed people doesn't help our economy any, and it is very difficult to support a family if you are unemployed. According to The Bureau of Labor Statistics, forty-four states and the District of Columbia have recorded unemployment rate increases, and over the past twelve months the number of unemployed persons has increased by 2.2 million while the unemployment rate has risen by 1.4 percentage points. In many fields there is a lack of available work and a shortage of jobs, leaving some people jobless. Since it would be hard enough to support yourself without a job it would be extremely difficult to support a family. Some of these people might even end up with very little money. This leads some people to find whatever jobs they can just to get by, and sometimes that means no job at all. You can lose your job at anytime. Never being sure if your job is secure can be very inconvenient. Also, having so many unemployed people doesn't boost our economy. Since the people who have lost their jobs or have been laid off usually have a shortage of money, they aren't buying a lot of things. These people are trying to pay whatever bills they can and just buy the essentials; they aren't going out shopping and spending a ton of money in different stores. Even though most of the money they earn is being spent on groceries, bills, and transportation, it's still not enough, which is hurting the economy. This is why I think we need to fix the problem of unemployment before it gets even worse. There are too many people who don't have jobs because there aren't enough and too many people who don't know if their job is secure or if they'll soon be fired. The unemployed people aren't doing much for our economy so that causes a problem too. I would like to see a drop in the unemployment rate and more job openings so it's not as hard to get and keep a job.

III. Solutions on Unemployment

Much of the discussion on finding solutions to the unemployment problem has centered on the pivotal role of faster economic growth and cuts in real wages. Faster economic growth is viewed as a means of generating more jobs. Cuts in real wages are a reaction to the view that through their demands for higher wages, some groups of workers have priced themselves out of a job. How much growth and how large a fall in real wages would be required to reduce the size of the unemployment problem both remain matters for debate. Ottosen and Thompson (1996) suggest an overhaul of the National Labor Relations Act in the United States as a way of preventing unions from delivering the monopolistic wages and fringe benefit premiums that raise business costs and lead to unemployment. Such proposals are often very difficult to implement. Simulations by Guy Debelle and James Vickery (1998) for the Australian labor market are suggestive of manageable wage cuts only if the unemployment target is not set too low. Such advice is not very encouraging. Moreover, many researchers believe that the levels of economic growth required to make a major difference to the unemployment problem are unlikely to be sustained by most economies. The United States and other countries could take other approaches to help reduce their unemployment rates (Ottosen and Thompson 1996). First, the methods of accumulation and dissemination of information on available jobs and workers could be improved. Ottosen and Thompson have suggested following the Swedish model, in which job centers have a nationwide, integrated database of jobs, employers, and available employees. This type of database could reduce the time spent by an average worker on the unemployment roll and thus reduce the unemployment rate. Second, unemployment agencies could tighten their job search and job acceptance requirements. Third, there could be improvements to the education and training provided to young people, with a greater focus on vocational skills. Finally, countries need to ensure that their welfare systems do not provide disincentives to work. Australia, for example, has strengthened the "Mutual Obligation" requirements (e.g., taking part in Work for the Dole projects) that eligible job seekers must meet in order to avoid loss of part of their income support. There may also be a role for unemployment programs that target various groups of jobless persons. Carol West (1994) surveyed the unemployment programs aimed at reducing cyclical, frictional, seasonal, and structural unemployment in the United States. Some of these programs aim to change people to match existing jobs while others create jobs to match existing worker skills. The change in focus over time and the short duration of many programs make evaluation
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difficult. Many programs appear to do little more than reorder the line of unemployed people, though obviously they have the potential to fulfill an equity function in the labor market. John Piggot and Bruce Chapman (1995) suggest that labor market programs can be a cost-effective means of managing the pool of unemployment. A number of other solutions to the unemployment problem have been advanced in the literature. For example, work sharing, early retirement, and reduced migration have been discussed. These policies affect the labor market by reducing the supply of labor. However, they have not won a great deal of support among economists.

V. Conclusion
As analyzed, there are four different types of unemployment. These are frictional, seasonal, cyclical and structural unemployment. After analyzing the effects of these types of unemployment, it can be concluded that cyclical and structural affect many people and can affect their status in life. Being unemployed can lead to families being destroyed because of lack of income. Cyclical and structural unemployment is affected by economic activity, so for this reason it is usually preferred to stay in a boom or upswing for maximum employment to occur.

REFERENCES: http://www.letters2president.org/letters/2015-unemployment-a-big-problem http://www.ask.com/web?q=Unemployment+in+the+Philippines&qsrc=6&o=102140&l=dir http://family.jrank.org/pages/1727/Unemployment-Solutions-Unemployment-Problem.html http://www.ask.com/web?q=Major+Problems+with+Unemployment&qsrc=6&o=102140&l=dir Unemployment - Solutions To The Unemployment Problem - Poverty, Family, History, Development, Labor, and Labour - JRank Articles http://family.jrank.org/pages/1727/Unemployment-Solutions-UnemploymentProblem.html#ixzz1adBMo2OP