Employment has become a big issue in the current society. With lots of graduates and professionals unemployed, the issue of getting meaningful employment has been a major concern. There are three major types of unemployment in Ghana. These include cyclical unemployment, frictional unemployment and structural unemployment. The following is a discussion of each of the types with the relevant details that will help you understand the situation of unemployment better.
The types of unemployment in an economy differ depending on various situations. Either way, large rates of unemployment in an economy can badly affect the country’s income and economic position. This is because it directly affects the taxpayers who contribute to the growth of the economy. What leads to people being unemployed at one time or another? Can you believe that in the midst of all the lack of job chaos, there are people who are unemployed simply because they don’t want a job? Here are the different types of unemployment and their causes.
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Types of employment
When looking at the categories of unemployment, cyclical unemployment is one of the most common. Just like the name depicts, it is unemployment that occurs in cycles and it affects mostly the people employed on a casual basis, who form the largest of Ghana's working population.
The cycles in the trade economy can be in recessionary or in depression phases. In the former, the economy is good and products are fast-moving hence, lots of profit is made. This creates the need to have more staff to manage production, and the raised profits provide the money needed to pay for this labour. Employment at this phase is at an optimum level.
In the depression phase, the economy begins to decline and there is no money to pay staff so they are cut down. This is because goods are slow moving. A resulting situation is a large number of workers willing and available to work but no work available to be done.
A cyclical unemployment situation basically comes in when demand for goods has fallen, which leads to little or no investment and a decline in production, eventually leading to unemployment as there is no money to sustain the workforce.
Note that low demand for goods can result from a mere disinterest of the former consumers, more available options in the form of substitutes or a decline in the spending power of the target market.
Cyclical unemployment can be decreased by introducing measures for increasing the total expenditure in the general economy which increases the level of effective demand so that nobody has to be laid off because purchase power is low.
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When studying types of unemployment and their causes, you will definitely come across frictional unemployment as a main type of unemployment in Ghana. This is when a person does not have a job because they have just left one or have just finished a professional course.
Frictional unemployment is common and normal in the labour market since there comes a time when someone leaves their job and does not immediately get into another. For graduates, it is obvious that there would be a time gap between leaving school and getting a job.
For instance, if a person leaves the university today and starts their search for a job, it is said that she is frictionally unemployed during this period of job search.
Several things can help reduce the occurrence of frictional unemployment and these include;
- Making it easier for job seekers to become aware of the available opportunities through advertisements.
- Creating fair ways of staff recruitment to give everyone equal chances.
- Improving the working conditions of staff to reduce the need for them to jump from a job to another.
- At one point, everyone finds themselves frictionally unemployed. The good news is that it’s always temporary, a passing storm.
This is another type of unemployment in the economy. Structural unemployment happens when one is unemployed because the available jobs are looking for specific skills which one lacks. In a nutshell, it is unemployment due to lack of the required skills.
It happens mostly from technical firms that need specialized personnel to handle their tasks and may be caused by a fall in demand for goods from a particular production which leads to laying off of excess manpower. For example, if you are looking for a job with a business qualification and a civil engineering chance opens up, you cannot apply even if you get to hear of the opportunity, as you lack the skills of an engineer so you remain unemployed till a business or a not so specific position comes up.
Structural unemployment can be sorted by job seekers focusing on job descriptions that match their qualifications. In case some jobs get outdated, these specialized workers can get absorbed in expanding companies through training to sort the problem of structural unemployment.
This is a form of frictional unemployment, only that with this, the job seeker is unemployed because they are looking for a specific job which they desire and not just for any job that comes their way. Examples of unemployment cases in search unemployment is that of disabled people who get opportunities in firms which are not friendly to their condition so they decline and also technical professionals like chefs and engineers who only want tasks in their technical field.
This type of unemployment occurs when people lack jobs due to advancements in technology that replace human labour or that need specialized skills to operate. In the categories of unemployment, it could easily fall under structural unemployment as technological changes in a workplace lead to structural changes.
Technological unemployment is never a serious problem in developed countries as it happens gradually and people are always prepared for it. However, in Ghana and other third world countries, it leads to big changes that lead to job loss as most times, the current workforce cannot keep up when something new is introduced so they end up being scraped off.
You must be thinking, why then would underdeveloped countries adopt technological changes if they lead to such huge damages? Well, it is a bitter-sweet story. Technological advancements at the workplace improve production speed, decrease the cost of labour and make work easier. The benefits are tremendous for the business. It seems as though the laying off of staff is the price that has to be paid.
Solutions to technological unemployment would be to gradually introduce one aspect of technology than another where possible, to make it easier for people to adapt to the change. If this is impossible, firms should try to create new positions for staff they are seeking to replace, to avoid rendering them victims of technological unemployment.
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Just like the name hints, it is a type of unemployment that occurs in a specific geographical region for any reason. For example, if the diamond in the Birim valley in Ghana gets exhausted, the miners from that place and near Akwatia would become unemployed. The same scenario applies to the Bauxite miners at Awaso. This is classified as regional unemployment.
This type of unemployment occurs when some people choose not to work even when they are able to because they are not in need of money. It is also called Voluntary Unemployment. Wondering why one person chooses not to work while another would give anything for any job that gives some income no matter how small? Here is why.
The essence of a job most times is to give us income. Most people these days have alternative sources of money. Some depend on their employed family members for support, elderly people have a programme where the country gives them some cash at the end of every month and with the increase of lottery games, people who win jackpots would quit their jobs, in most cases.
Sometimes, professionals get contracts that give them lots of money such that at the end of the day, they quit their jobs and become voluntarily unemployed for a while. The only problem this creates is an increase in the number of unemployment figures in the country’s economy.
Another explanation of casual unemployment would be that of the people who look for casual opportunities on a day-to-day basis but lack the chance. Casual jobs can be terminated at any time, rendering one unemployed.
Seasonal employment is a work agreement where one gets contracted for a certain period of the year, only when the work is available. When the job or period is over, one becomes seasonally unemployed until the next time something comes up.
Perfect examples of seasonal unemployment in Ghana fall in industries like the agricultural sector where products differ seasonally, and tourist sites and holiday resorts that have high and low seasons. Holiday resorts contract more staff during the peak holiday season like December when they expect to have lots of patronage. After the period is over, these seasonal people are laid off.
To solve the problem of seasonal unemployment, job seekers can master the sequence of different sectors and ensure they have a ready job in another sector when they complete a current job. For instance, plan to do a holiday resort job over December holidays and make arrangements to be harvesting nuts at a large scale farm come January.
Alternatively, the government can adopt modern farming methods of farming that can create full-time jobs for the seasonal agricultural sector employees. Techniques like irrigation, mechanization, double cropping and mixed farming can create throughout the year, opportunities that curb seasonal unemployment.
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The problem of unemployment might get worse in the future, especially due to technological advancements that render older people unemployed in Ghanaian firms. However, if the few steps mentioned in the above scenario are focused on, the rate of future unemployment could be reduced by a great margin. If people would also get proactive in finding jobs and performing well once there, it would lead to a high reduction in the occurrences of job-hopping. Another remedy for unemployment would be getting less choosy, doing the jobs that come up once they do and looking for others while there if we must. With the types of unemployment explained above, it is easy to know how to approach each.