In this article, we discussed the causes of unemployment in Nigeria, we also talked about the meaning of unemployment and its types.
Definition
Unemployment is a term referring to individuals who are employable and actively seeking a job but are unable to find a job. Included in this group are those people in the workforce who are working but do not have a suitable job.
Unemployment is when a person between the ages of 15 and 64 who is without a job, willing and able to work and is actively searching for a job.
Types of Unemployment
There are basically four types of unemployment:
(1) demand deficient,
(2) frictional,
(3) structural, and
(4) voluntary unemployment
Demand deficient unemployment
Demand deficit unemployment is the biggest cause of unemployment that typically happens during a collapse. When companies experience a reduction in the demand for their products or services, they respond by cutting back on their production, making it necessary to reduce their workforce within the organization. In effect, workers are laid off.
Frictional unemployment
Frictional unemployment refers to those workers who are in between jobs. An example is a worker who recently quit or was fired and is looking for a job in an economy that is not experiencing a recession. It is not an unhealthy thing because it is usually caused by workers trying to find a job that is most suitable for their skills.
Structural unemployment
Structural unemployment happens when the skills set of a worker does not match the skills demanded by the jobs available, or instead when workers are available but are unable to reach the geographical location of the jobs.
An example is a teaching job that requires relocation to China, but the worker cannot secure a work visa due to certain visa restrictions. It can also happen when there is a technological change in the organization, such as workflow automation that displaces the need for human Labor.
Voluntary unemployment
Voluntary unemployment happens when a worker decides to leave a job because it is no longer financially compelling. An example is a worker whose take-home pay is less than his or her cost of living.
Institutional Unemployment
Institutional unemployment results from long-term or permanent institutional factors and incentives in the economy. The following can all contribute to institutional unemployment:
Government policies, such as high minimum wage floors, substantial social benefits programs, and restrictive occupational licensing laws
Labor market phenomena, including efficiency wages and unfair hiring
Labor market institutions, such as high rates of unionization
Many governments offer unemployment assurance to certain unemployed individuals who meet eligibility requirements.
Here are the main causes of unemployment in Nigeria.
Corruption
The high rate of unemployment in the country has been attributed to corruption value chain in high places of authority which is a worrying situation that urgently require deliberate effort by both government and the private sector to solve.
The wave of criminality such as kidnapping, armed robbery, terrorism, rape, cultism among others, are harvest of unemployment which has remained not addressed.
In Nigeria today, it has become a norm that before an unemployed person secure any job, whether in government or private enterprises, he or she must be connected to a top government appointee and or a reliable politician.
The situation has deteriorated to a worsened state that Nigerian lawmakers – Senators and members of the House of Representatives, ministers, governors, commissioners, council chairmen, traditional and religious leaders – issue notes to applicants before they are considered for any job.
Neglect of agricultural
Agriculture is the backbone of the Nigerian economy and major foreign exchange earner. It
contributes about 41.84% to GDP in 2009 and employs 70% of workforce. Although Nigeria
depends heavily on the oil industry for its budgetary revenue it is believed that if the
agricultural sector is properly managed and enhanced, it would greatly increase the country’s
gross domestic product and even replace oil considering the vast area of land that is unused in
Nigeria. Therefore, in order to achieve long-term agricultural growth, the government needs
to sustain and scale up agricultural exports sectors and also boost productivity in food to meet
Poor quality education
Education has many purposes. The most common purpose i.e., the economical purpose of education is to gain knowledge and skills that will prepare individuals to lead productive and fulfilling lives. Some view education as a means to nurture a skilled labor force that drives economic growth and innovation. In this concern education helps to curve social evil i.e., poverty, illiteracy and unemployment. These are connected to each other. poverty leads to illiteracy and illiteracy ultimately leads to unemployment. This is like a cycle or loop. Education helps to break this evil loop and result would be substitute with the word’s abundance, literacy and employment ultimately, it enables us to secure our lives through employment. But this not a conclusive statement. In the context of 21th century context, it would not be wrong to say education has a crucial role for employment but not the sole role. If we say education has the sole role for employment it will create an anomaly. Literate person increases day by day but at the same time, employment have not increased at the same pace. A probable answer of this would be education unable to make human resource
Lack of working skills
The lack of relevant skills causes unemployment and underemployment due to a mismatch between skills acquired (supply) and skills required (demand). Without getting into specifics like nepotism, politics, and other externalities, the fundamental market dynamics has remained the same for centuries
Overpopulation
The malicious cycle generated by a high reliance burden associated with a young age-structure led to low savings and investments, which in turn led to low economic growth and a low standard of living. This produced high fertility rates, which in turn heightened the dependency burden disseminating the cycle
Inflation decreases in economic value.
As inflation quickens, workers may supply labor in the short term because of higher wages—leading to a decline in the unemployment rate; however, over the long draw, when workers are fully aware of the loss of their purchasing power in an inflationary environment, their willingness to supply labor reduces.
Conclusion
Unemployment is when an individual who is not employed and is seeking employment, cannot find work. Unemployment is a key indicator of the health of an economy. A low unemployment rate represents a strong economy while a high unemployment rate represents a weak economy.
READ: Causes of Underdevelopment in Nigeria