UNEMPLOYMENT
International Labor Organization defines unemployment as a condition where majority of the population do not have job or jobless. Similar to the situation of people are looking for jobs for more than four weeks, and still in vain. The unemployment rate is a measure of the prevalence of unemployment and it is determined as a percentage by dividing the number of unemployed individuals by all individuals presently working. In addition to that, different debates are occurring regarding the causes, consequences and solutions for unemployment. The classical, as well as the neoclassical and the Austrian School of Economics has been studying the market mechanisms in resolving unemployment; and it has been found out that the numerous causes of unemployment are unionization, high taxes imposed by the government to the minimum wage of the employees, sp as to the other working policies that discourage the hiring of employees in different industries. Furthermore, the Keynesian Economics focuses on the cyclical reasons of joblessness of many people. And, the potential interventions for the reduction of unemployment during recessions focus on recurrent supply shocks that suddenly reduce aggregate demand for goods and services and thus reduce demand for workers. Keynesian models highly recommend the government to intervene on the design and plan in increasing the demand for workers. These can be done through financial stimuli, job creation, and expansionist monetary policies. On the other hand, Marxism theory centers on the relationships between the controlling owners and the subordinated proletariat whom the owners pit against one another in a constant struggle for jobs and higher wages. This condition of unemployment produces benefits by reducing wage costs for the owners. The causes and solutions to the unemployment require abolishing capitalism and shifting to socialism or communism according to the theory. Moreover, there are still other types of unemployment models such as structural unemployment, which deals with the structural problems in the economy and natural inefficiencies in labor markets along with an equality between the supply and demand of laborers versus their skills and abilities. This model emphasizes the causes and solutions related to disruptive technologies and globalization. Continuous debates regarding the voluntary decisions to work based on each individual’s evaluation of their own work and how that compares to current wage rates; plus the time and effort required in finding a job. The causes and solutions for frictional unemployment often address barriers to entry and wage rates. Behavioral economists highlighted the individual differences in terms of decision making and often involve problems and solutions regarding efficiency and sticky compensation rates of the workers. (http://en.wikipedia.org/wiki/Unemployment)
Correspondingly, in the Philippines, the unemployment rate remains high, after few months of global economic crisis. The Philippines has one of the highest unemployment level in Southeast Asia, standing at 6.8 percent as of October 2008, according to the country’s National Statistics Office. The global economic crisis has dampened demand in Japan, the United States and Western Europe for the markets for Philippine export goods, services and migrant workers. The effect of recession always falls on the workers. In the same manner, if there are no product demands, the tendency is to halt the hiring process of people. The worst thing is, some companies are forced to lay off workers or close their companies, and these factors caused the increasing rate of unemployment rate in the country. Business analysts noted that the most vulnerable workers are those in the export-oriented industries such as electronics and textile manufacturing. The continuous recession on the trading partners affected largely the export sector. This is the reason that the Philippine economic planners expect export business will fall significantly for the next few months, foremost for those working in the labor-intensive manufacturing companies.
(http://www.philstar.com/Article.aspx?articleid=444878)
Additionally, there are numbers of companies that are being reported lying off workers or cutting working hours as the crisis reduced demand for Philippine exports. The same situation in Luzon, Northern Philippines, Intel Corporation; the US semi conductor company in the Philippines that lay off 1,800 workers. In the same way, Giardini Del Sole Inc. in Cebu; has also temporarily halted their operation that made 250 workers jobless in the midst of global financial crisis. In view thereof, the Philippine Labor Department reported that there are 40,000 workers retrenched, as well as 33,000 workers are experiencing shorter working hours; while over 5,400 overseas Filipino workers were being displaced because of the global financial crisis. Just as the lack of job opportunities in the Philippines led many unemployed people to look for employment in the foreign land. This fact alone led almost one million Filipino people to work overseas in order to give their families a decent living.
(http://www.philstar.com/Article.aspx?articleid=444878)
References:
(http://en.wikipedia.org/wiki/Unemployment)
(http://www.philstar.com/Article.aspx?articleid=444878)
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