By Kabiru Isa Dandago
Unemployment is the state of having no job to do to decently earn a living. It simply means joblessness, doing nothing to contribute to the Gross Domestic Product (GDP) of an economy. It depresses the unemployed and it paves ways for various dimensions of crimes and anti-social activities. The level of unemployment or joblessness in an economy is to be ascertained as a percentage of the defined workforce (working class) in the economy which is outside the economic system. In other words, we are to appreciate the number of people in the working class and determine how many of them are not economically productive. The percentage of those not in the economic system out of the number of people in the work class is what to be considered in determining the level of unemployment in the economy. This shows that if all the people in the working-class population is actively involved in ensuring the productivity of the economy, we can say that there is full employment in the economy.
A hypothetical economy of 100 million people might have the following categories of people living in it:
- Old and retired (and tired) people, who can no longer work: 7 million
- Sick and incapacitated people, who cannot work: 5 million
- Babies, School aged, and those below working age: 20 million
- Working age/class and healthy people: 68 million
When we talk about unemployment, the concern is on the percentage of those in the last category who are not economically productive; not adding value to the economic development of the society within which they live. The challenge to the policy makers is to come up with deliberate policies/actions that would make all the 68million people in the hypothetical economy above to be gainfully employed/occupied across the three main sectors of the economy: Public sector, Private sector, or NGO Sector.
As the working class is gainfully employed/self-employed, the 68% residents of the economy could comfortably take care of the needs (not wants) of the other 32% residents of the economy. As the 68% of the people is productive, government would be able to tap from their outputs and those of their organizations to come up with numerous developmental projects that would enhance the wellbeing of the people (this is possible through well-articulated fiscal policy measures).
Unemployed elements among the working class of an economy constitutes a big liability to the economy, and it renders the whole economy a liability too. But a productive working class makes the whole economy to be peaceful (no youth restiveness, no criminal activities, no redundancy, no begging, no hopelessness) and productive (producing high quality goods and services to meet domestic demands and export excess) for ensuring sustainable growth and development in the economy.
From the above description of unemployment, we should be able to differentiate between the following related terminologies, which the young people capitalize on to give some impressions that there are no jobs in an economy:
- Unemployment Vs Under-employment (no much work to do under a salaried job).
- Unemployment Vs Job Luxury (teaching, farming, trading, etc as occupation of last resort).
- Unemployment Vs Graduate choice of job (expectations for office jobs that would quickly lead to ownership of car, house, etc.)
- Unemployment Vs Arrogance against some entrepreneurship opportunities.
- Unemployment Vs Absence of job opportunities, especially due to collapse of businesses, trades, professions, and vocations, as a result of poor enabling investment environment.
It is the last category that is acceptable as correct indication/description of unemployment in a serious economy.
Causes
When job opportunities are not available in an economy, members of the working class have to really face the challenge of survival in the economy, which could be term “survival of the fittest”! Job opportunities are created where investors (domestic and foreign) invest decently in any sector of an economy and the jobs created are clearly spelt out for interested and qualified people to take them up and be honest in discharging specified duties to be discharged on each job in the best interest of the employers and the economy as a whole.
Unemployability of the graduates/job seekers is a big problem to employers of labour, forcing them to subject the employees to further training before they start using them to provide various services that are needed towards achieving set objectives of the employers. As the unemployability is high, employers of labour (especially foreign direct investors) might resort to importing relevant workers to provide the required skilled labour services for them in a local economy. In such cases, the local workforce would remain employed, even as job opportunities are created by local or foreign investors.
When training in schools (secondary schools up to tertiary educational institutions) are geared towards mere obtaining certificates, rather than specific entrepreneurial skills acquisition, the school certificate holders and graduates of polytechnics or universities, would remain unemployed since their training is not designed for specific jobs, but just to make them certificate holders. This is one of the reasons why many graduates are roaming about the streets in search of jobs, even if the jobs are available. Employers of labour are more concerned about what value you can add to their productivity and profitability than the many certificates that you hold if you lack the required skill or competent for the job.
Poor entrepreneurial training is another cause of unemployment. Each program of study at all levels of the educational system in an economy has its own dimension of entrepreneurship. As students are passing through various programs in the school system, they need to be exposed to relevant entrepreneurial skills acquisition so that they obtain both skills development and certificate on passing through the school system. The two are needed by any serious employer of labour. As a job seeker lacks any of the two, it would be difficult for him/her to get out of unemployment.
When an economy remains public sector driven, job seekers in it are not likely to get gainful employment. Government’s capacity to employ people is very limited, since it is not an engine of economic growth. The moment an economy becomes government-driven, employment opportunities would be exhausted, and personnel cost would be very high, with a great percentage of the cost attributable to “ghost workers” and/or redundant workers. In real sense, employment opportunities are usually created by investors, who should be attracted to various sectors of an economy for them to achieve their set objectives (mainly profit or wealth maximization). As they achieve their objectives, they would be led by an “invisible hand” to provide the best welfare for the generality of the people in the economy, especially providing numerous job opportunities.
Government’s primary responsibility on dealing away with unemployment is to create enabling investment environment, which normally attracts domestic and foreign investors to invest in various sectors of an economy. But care must be taken to ensure that foreign investors do not come with their employees (at the supervisory and managerial levels). Appropriate regulations should be put in place on utilization of employment opportunities that are created from the investment made by foreign investors in the local economy. For example, it could be provided that at least 70% of all jobs created at all levels, by a foreign investor, must go for local employees, just as there should be rule on the percentage of local raw materials and other local contents that need to be used in the production process of the firm registered by the foreign investor(s).
What constitutes the enabling investment environment that government should provide to attract domestic and foreign investors for investment of their funds into the various sectors of the local economy? There are key matters to be taken care for the environment to be enabling to investors: (i) they need good judicial system, where justice is fair, unbiased, timely and unexpensive; (ii) they need good security system, which assures them of protection for their faiths, lives, intellect, posterity, and properties; (iii) they need stable and constant power supply wherever operate; (iv) they need constant supply of clean water in the operating areas; and (v) they need good transportation system with good road/rail network. With these matters well taken care of by government and with the numerous natural and human resources in an economy, like that of Nigeria, it would not take long before investors appear all over the cities, towns, and villages. They would be led by an “invisible hand” to provide employment opportunities and other goodies.
It is important to note that in an effort to provide the needed enabling investment environment, government might decide to commercialize items iii-v and provide some subsidies on the agreed reasonable prices of the services to be provided by private sector operators. Government is to fully fund items i and ii and also subsidize the cost of providing high quality education at all levels and the provision of high-quality healthcare services for all.
Poor professionalism is another cause of unemployment in developing economies, like Nigeria. If each business, trader, vocation, or profession as firms in an economy and all businessmen and women and other individuals/households in an economy are to appoint for themselves lawyers, accountants, medical doctors, nurses, engineers, educational consultants, etc, many students specializing in those areas of study would not be interested in working with government or private sector operators. They would rather be on their own, as they could mobilize clients and be generating a lot from the professional services they would be providing to their clients at reasonable fees. Professionalism, therefore, provides enough job opportunities for the professionals and, by extension, it allows rooms for employment of more people (including graduates and professionals). But that is in an economy/environment where professionalism is respected, and professional services valued.
Effects
Unemployment is a strong cause of anti-social activities and other vices in an economy. When the youth and other members of the working class of an economy are unemployed; meaning that they do not have jobs to do to earn decent live, their minds easily become the devil workshops! The devil would be guiding their minds towards all sort of anti-social activities, like drugs addiction, raping and other sexual abuses, disrespectful life, and other anti-social activities. Their minds when lost to the devil, due to unemployment, would be wasteful minds, making them to be wasteful assets of the economy.
Again, where legal, decent, and gainful employments are absent, many jobless members of the working class would resort to illegal, crude, and wicked activities for their livelihood. That is why small thieves, yahoo-yahoo boys/girls, sex-workers, armed robbers, bandits, kidnappers, ritualists are on the increase in Nigeria and other developing economies where unemployment is on the increase. When the unemployed wake up in the morning with nowhere to go to earn a decent living and no food to eat, they might not know when they are led by the devil in them to commit criminality, with a view to taking care of their basic needs.
Unemployment inflicts economic depression (doom) in the soul of the unemployed, it is very devastating and disorganizing to the victim. It makes the victim looks abandoned, rejected and outcast. With weak faith in God, the victim might resort to fighting back the society that denied him job to do in some more wicked ways.
Unemployment slows down the process of economic recovery since productivity is poor. As a good number of the people in the working class of an economy are unemployed, production of goods and services would be low, thereby causing inflation in the economy as a result of scarcity of the needed goods and services. The scarcity may result to importation of the needed goods and services, and that is another cause of inflation which further aggravates the unemployment situation in an economy.
A low level of employment reduces the social well-being of the people in a country by increasing crime rate and other anti-social behaviors among the populace. The unemployment of the working class is a very big problem to the economy since not all the members of that class would have the belief that it is their fate to be unemployed and economically poor in the society. They would want to take their “revenge” against the economy by resorting to drug abuse and also take arms against those that are well off in the economy so that, as they could not sleep because of hunger and pauperization, the so-called rich in the society/economy could also not sleep bearing in mind that the unemployed and hungry members of the working class are asleep!
The late Professor Sam Aluko had once expressed his fear about what would happen to the future generations of Nigerians when he observed that: “the poor Nigerians (especially due to unemployment) could not sleep because they are hungry, and the rich Nigerians could not sleep because the poor Nigerians are awake”. Unemployment is the main cause of the criminalities, anti-social activities and hopelessness of the people that are suddenly becoming kidnappers, bandits, armed robbers, drug traffickers, cattle rustlers, etc. all over the country.
There is the possibility of low level of per capita income (which is a mark of deterioration in the living standards of the people) which is associated with a country whose unemployment level is very high. With unemployment, production levels of goods and services is bound to be low, thereby resulting to low level GDP (gross domestic product) and low-level GNP (gross national product). As the GNP remains stagnant or decreases, while the population increases, the per capita income is bound to fall. This is a clear signal of deterioration in the standard of living of the people in the economy. This is the danger Nigerian economy, and the economies of many developing countries are facing.
Unemployment is one of the critical questions Prof. Seers (1965) postulated that serious governments should always ask themselves on whether or not they are leading their countries towards socio-economic development:
- What is happening to inequality?
- What is happening to poverty?
- What is happening to ignorance?
- What is happening to unemployment?
According to Prof. Seers, if all of the 4 are decreasing from high levels, then there is positive development in the economy. But where any one of them is on the increase or is stagnant, then there is no positive development in the economy. Can we say that there is positive development in the Nigerian economy from independence (1960) to date (2022), especially as unemployment is on the high side?
Solutions
Deliberate actions must be taken by the government, in conjunction with the private sector operators to ensure the production of school certificate holders and graduates of universities and polytechnics that are easily employable by the relevant institutions/organizations. The training of students from secondary schools’ level to tertiary educational level should be re-oriented towards development of appropriate entrepreneurial skills in the students (using realistic and honest entrepreneurial schemes) so that they could be self-employed rather than becoming employees to government, companies, and other employers of labour. University and Polytechnic students should be trained to become employers of labour some few years after graduation. This is possible through deliberate and committed policy measures to be built into the educational system of the country.
Emphasis to be put on entrepreneurship training at all levels of education in Nigeria and other developing countries, so as to make effective utilization of the talents and gifts the students are endowed with. Nigeria and other developing economies have to go by the saying that ‘if you don’t skill a country, you will kill the country’! Citizens of the developing countries have been killed for too long, it is now time for the present and future generations of the citizens to be skilled so that they could be self-employed and reduce reliance on government jobs.
Ensuring that all intervention funds of government (through Central Banks and other government agencies in the developing countries) reach the target groups to make availability of capital possible for start-up, expansion or revival of trades, businesses, vocations, or professional practices. Intervention funds should not be abused by shunning the real entrepreneurs, traders, or professionals in all the sectors of the economy that deserve the intervention funds for them to grow up, expand or diversify their businesses. It is alleged that political patronage is being prioritized by the relevant government functionaries than real and active participation in the entrepreneurial businesses that need intervention funds.
Deliberate actions need to be taken by relevant government agencies to ensure development of database of all Trades, Businesses, Vocations, or professional practices at the Micro, Small, and Medium Enterprises (MSMEs) levels in each of the 36 states of the Federation and FCT for Nigeria. Similar database development is necessary in other developing countries. With the database sincerely developed and based on committed policy implementation and governmental financial and technical supports, government can give deadlines for the growth and development of entrepreneurial trades, vocations, businesses, and professions from micro to small, small to medium, and medium to large. The process of this movement from one level to the next would create a lot of job opportunities for the youths (male and female).
Government should ensure that all school aged children (male and female) in a developing country receive high quality basic education (Primary and Junior Secondary School) freely and compulsorily. Those that would want to proceed to Senior Secondary School level and upwards to university level could do that with reasonable government supports. Alternatively, with quality basic education, the citizens could adopt Trades, Businesses, Vocations or Professions relevant to their talents and capacities, and they could be rich and wealthy in the process. The important thing is that as they adopt any of the relevant economic activities, they are part of the economy as self-employed citizens and their contributions to the growth and development of the economy could be higher than the contributions of highly educated citizens.
Conclusion
With deliberate government’s actions and sincerity in implementation, and the citizens’ support and active participation, unemployment could be controlled to a manageable level in the best interest of the economy. The Nigerian economy, just like other developing economies across the world, is suffering a lot from unemployment problem to the extent that the citizens of the countries are being reduced to liabilities that are entitled to palliative supports from governments and well-meaning wealthy citizens, instead of adopting appropriate measures to build their capacity to be part of the economy and become the productive assets that they all deserve to be.
The youth in Nigeria and other developing countries need to wake up to the challenge of being rendered liabilities, while they deserve to be precious assets to their motherland! It is high time for the youth in those countries to rescue themselves from the “trap” they have fallen into of being tools for political thuggery, banditry, and kidnapping, while they get peanuts out of the money made in the process by their sponsors. They ultimately use the peanuts to get more drug addicted and become useless citizens!
As unemployment is more manifested in the youths of a country, if the youth could not be united for the cause of dealing with all the factors hampering creation of employment opportunities, through the civilized way of putting in place leaders that could deal away with those factors, then there is no hope for their emancipation and the emancipation of the developing countries to which they belong.
Kabiru Isa Dandago is a Professor of Accounting and Taxation with the Department of Accounting, Faculty of Management Sciences, Bayero University, Nigeria
He can be reached via kidandago@gmail.com or 08023360386
