The word “unemployment” clearly tells us of an individual or pool of people who don’t possess any job and they are finding jobs to get hired at a company’s forum but they are unable to find any employment which generates a mass of people who are active yet they don’t have any source of earning through which we call the term unemployment.
Origin of unemployment:
The real root cause of the unemployment in any other country is the affection of economic criteria of the state which slows down and due to that impact it causes people to lose their jobs, businesses are forced to cut costs by reducing payroll expenses the COVID-19 outbreak has resulted in higher unemployment rates than ever recorded in the past 5 years, Also another reason for unemployment is the competition with other companies and since technology is increasing in our lives so much that most of the manufacturing companies have fired their employees because 50% percent of the peoples work is now being performed by a single robotic mechanism. When that many people get unemployed the economy loses one of its major key of growth which allows the consumer to spend In simple words workers have less money to spend on their needs until they find new employment also lower consumer spending from unemployed workers reduces business revenue which then forces companies to cut more payroll and reduce their costs it becomes downward spiral very quickly, And those people who are long termed on unemployed don’t find a good job or related to their profession despite the laws of the companies of the age factor many find a part-time job or an entry-level job to make their needs. In other areas, unemployment is so much criticism that most people have taken the road of crime to meet their needs in one way or another even knowing their consequences they don’t look back because they are forced by this damaged system which is keep growing on this critical condition especially when their pandemic outbreak.
Types of unemployment:
Classical:
This type of unemployment occurs when wages for the job are kept above the market-clearing level which results to be more job seekers than the present vacancies.
Cyclical:
This occurs when there is no agreeable demand in the economy to provide jobs for everyone who wants to work. Demands for the merchandise decrease, less outcome is needed and fewer workers are needed.
Structural:
This especially occurs when the market does not have enough jobs for everyone who wants to work plus there is a mismatch of the skill set between the unemployed people and the skills required to work.
Frictional:
This occurs when the worker is moving from one job to another.
Hidden:
According to the market employment data, only those who are unemployed and are still looking for a job are on the list while the others who gave up are removed and don’t even considered under the category of unemployment
Long-term:
It is defined as those people who are unemployed and are lasting than one year.
Statistics of Pakistan unemployment:
According to the given data of more than the past 5 years, we can easily observe that how badly the unemployment rate has effected the economic market of Pakistan especially during the pandemic situation where the template of “Work from home” didn’t go the way it was supposed to be as compared to other countries. International fund (IMF) has increased its percentage projection for Pakistan to six .2 percent for 2020 against 6.1 percent in 2019. In the latest update to its World Economic Outlook, the IMF projected inflation in Pakistan at 13 percent for 2020 against 7.3 percent in 2019 and 3.9 percent in 2018.
In the latest reports, Pakistan's Population reached 211.17 million people in Jun 2019. In 2019, the percentage in Pakistan was at approximately 4.45 percent which slightly increased from 4.08 percent the previous year, and among other factors, it takes an increase into account which increases in the labor force, as well as the age of the population. A high unemployment rate usually indicates economic troubles which generate fluctuation in the economics of the state which is the backbone of Pakistan.
Youth:
It is also being said that up to 2.3 million Pakistani youth are at big risk of being jobless due to the lockdown to contain COVID-19 outbreaks in a report it is also been said, “lockdown generation”.
In Pakistan youth unemployment rates are expected to reach at least double in a scenario of short COVID-19 containment, the report said according to ADB says that the job losses among youth may reach 14.8 million in 2020 in the 13 countries under the 6-month containment scenario and in the 6-month scenario, job losses for youth may equal to 2.3 million concentrations of youth is badly hit by sectors and lower labor productivity in Pakistan.
The finance ministry has just informed the Senate that because of the coronavirus pandemic it will result in an estimated 3 million people being unemployed and the poverty rate will surge to 33.5% and upon in a written reply submitted to the Upper House the ministry warned that the budget will deflect and increase to 9.34% due to the ongoing pandemic which has proven to be a setback for businesses around the globe.
The ministry also stated that out of the 3 million who could lose their jobs due to the pandemic a million from the industrial sector will be unemployed while the 2 million people will lose their jobs from the services sector & the rate of unemployment will rise from 24.3% to 33.5%. The rupee was also be devalued by 7.5% per month due to the coronavirus pandemic and on the other hand, the ministry also mentioned that the FBR revenue from April to June will fall between Rs 700 billion and Rs 900 billion it warned that the FBR’s tax revenue can decrease to Rs 3.9 trillion adding that the board’s tax target was Rs4.9 trillion. The fiscal deficit will increase from 7.5% to 9.5% the ministry told the senators adding that the virus will also hamper the country’s exports which are expected to reduce to $22.22 billion, Remittances from overseas workers will also be reduced by $2 billion and the budget deficit will increase to 9.4% according to the ministry of finance.
As we all are hit by the Covid-19 followed by social distancing and nationwide lockdown businesses are experiencing way more major impacts especially during this “second wave” of covid-19, No matter how established they are all of them having re-look how they manage and operate their business including pre-visualization of their business plan. It has become tougher for many businesses to stay their financial wheels turning during the lockdown period thanks to less revenue churn and therefore the general uncertainty within the global financial environment. Shopkeepers or small stage business holders who have never heard of E-market are now forced to know about it and somehow establish their place before the tables turn around. As the technology is also increasing day by day these small scale businessmen are now establishing their business via different platforms before they wipe out but even reaching these various platforms does not guarantee that it is the proper solution because just recently we have witnessed that how a well-known woman’s clothing brand fired their 450 employees without any hesitation in just one go. The government has announced strictly to everyone that they must follow the SOPs at any cost no matter where ever they are however the sad reality is that most of the people are not following the safety measures provided by the government in which the government has the right to ban those specific places who didn’t keep this law and order by which “The Brand” is facing huge loss not just by how bad or good their product is by how the customers are coming without any safety measures in which its major breakdown for them. In the markets of Karachi at sadder and Bolton market these local businessmen faced huge loss like never seen before and cannot be compared with the brands as there is no recovery, Those people who have heard about doing your business online and cash-free payments (doing everything online) is now becoming their reality and now it's not just their option but they must go to survive as everything is completely changed in this digital era.
Solutions:
In or der to deal with this crises Government of Pakistan has launched “Ehsaas Programs” in which the government will be assisting all the citizens of Pakistan whether it’s big business or small but the main target will be small business not just that Government will be providing loans also for their stability, Banks of Pakistan have also launched their “KAROBAAR POLICY” to uplift the graph economy of the state.
Not only just that Banks are providing loans they are also providing loans for various categories whether it’s for a car loan or small business.
At the meeting of the council, the government of Pakistan has launched one more program of its major policies. Under this program, direct cash support will be provided to up to 10 million households in the coming weeks this will be achieved by expanding monthly transfer received by beneficiaries of the Benazir Income Support Program (BISP) by 50 percent to Rs 3,000 per month for the next four months benefiting almost about 4.5 million households. Then about 3 million additional households will be identified via National Socio-Economic Registry (NSER) and given a cash transfer of Rs 3,000 per month for the next four months & Finally, the government will identify an additional 2.5 million households and verify them through the local district administration set up as soon as they are verified these households will be provided as financial support by the federal government.
And additionally, the govt has also announced support funds for businesses that include Rs 100 billion in tax refunds and a further Rs 100 billion in deferred interest payments as mentioned above.
Upon a brief survey round the business holders and therefore the people, we were ready to collect their words which they could think are few ways to affect this bad time.
1. the primary thing to try to do to scale back the unemployment in Pakistan is to make a correct flowchart by the govt.
2. The education sector of the country should be managed and equal.
3. Similarly, other institutions should be opened to get more skills among the citizens for updated employment criteria.
4. The age retirement bar should be at 60 years to mention forward the youth.
5. With the removal of the energy crisis foreigners won't hesitate to take a position in Pakistan thus employment rate will increase.
6. More advanced agriculture sectors should be devolved.
Written by: Arsalan Khalid Karim