Question

Explain the causes of unemployment.

Answer 1

1. Inadequate skills: Sometimes skill sets of an individual do not match the requirements of the industrial and corporate world. Such people are likely to be unemployed or underemployed.
2. Frequent shift in jobs: When individuals are temporarily unemployed or when they are switching jobs, there is period of no employment between one job and the next.
3. Changing economy: The world economy has its ups and downs. For example, the construction and real estate sector, is well known for periods of huge economic activity and lull periods. In the lull periods there are greater chances of workers losing their jobs; and when the economy seems to be doing great, there is a boom in employment.
4. Seasonal shift: In the same way as seasons come and go, seasonal periods of employment are common in certain sectors. This is seen for example in agriculture, banking sector, and shipping industry. Seasonal migration of people from rural to urban areas has an effect on urban unemployment too.
5. Gap in demand and supply: The number of individuals who fit a job are far higher than the openings available. Many educated youth aspire for white collar jobs and are unwilling to accept work that does not fit their needs.