UNEMPLOYMENT

Taxonomy of Unemployment
The population of every economy is divided into two categories, the economically active and
the economically inactive. The economically active population (labour force) or
working population refers to the population that is willing and able to work, including those
actively engaged in the production of goods and services (employed) and those who are
unemployed. Whereas, unemployed refers to people who are willing and a capable of work
but are unable to find suitable paid employment. The next category, the economically
inactive population refers to people who are neither working nor looking for jobs. Examples
include housewives, full time students, invalids, those below the legal age for work, old and
retired persons.

There remains considerable theoretical debate regarding the causes, consequences and
solutions for unemployment. Classical economics, New classical economics, and the Austrian
School of economics argue that market mechanisms are reliable means of resolving
unemployment. These theories argue against interventions imposed on the labour market
from the outside, such as unionization, bureaucratic work rules, minimum wage laws, taxes,
and other regulations that they claim discourage the hiring of workers.

Measurement of Unemployment
Unemployment (or joblessness) occurs when people are without work and actively seeking
work. The unemployment rate is a measure of the prevalence of unemployment and it is
calculated as a percentage by dividing the number of unemployed individuals by all
individuals currently in the labour force. In other words it is expressed as a percentage of the
total number of persons available for employment at any time.

There are also different ways national statistical agencies measure unemployment. These
differences may limit the validity of international comparisons of unemployment data. To
some degree these differences remain despite national statistical agencies increasingly
adopting the definition of unemployment by the International Labour Organization. To
facilitate international comparisons, some organizations, such as the OECD, Eurostat, and
International Labour Comparisons Program, adjust data on unemployment for comparability
across countries.

Though many people care about the number of unemployed individuals, economists typically
focus on the unemployment rate. This corrects for the normal increase in the number of
people employed due to increases in population and increases in the labour force relative to
the population. The unemployment rate is expressed as a percentage, and is calculated as
follows:

As defined by the International Labour Organization, "unemployed workers" are those who
are currently not working but are willing and able to work for pay, currently available to
work, and have actively searched for work. Individuals who are actively seeking job

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placement must make the effort to: be in contact with an employer, have job interviews,
contact job placement agencies, send out resumes, submit applications, respond to
advertisements, or some other means of active job searching within the prior four weeks.
Simply looking at advertisements and not responding will not count as actively seeking job
placement. Since not all unemployment may be "open" and counted by government agencies,
official statistics on unemployment may not be accurate. In the United States, for example,
the unemployment rate does not take into consideration those individuals who are not
actively looking for employment, such as those still attending college.

TYPES OF UNEMPLOYMENT
Economists distinguish between various overlapping types of and theories of
unemployment, including cyclical or Keynesian unemployment, frictional unemployment,
structural unemployment and classical unemployment. Some additional types of
unemployment that are occasionally mentioned are seasonal unemployment, hardcore
unemployment, and hidden unemployment. During periods of recession, an economy usually
experiences a relatively high unemployment rate

Classical unemployment
Classical, or real-wage unemployment, occurs when real wages for a job are set above the
market-clearing level causing the number of job-seekers to exceed the number of vacancies.
On the other hand, some economists argue that as wages fall below a livable wage many
choose to drop out of the labor market and no longer seek employment. This is especially true
in countries where low-income families are supported through public welfare systems. In
such cases, wages would have to be high enough to motivate people to choose employment
over what they receive through public welfare. Wages below a livable wage are likely to
result in lower labor market participation in above stated scenario. In addition it must be
noted that consumption of goods and services is the primary driver of increased need for
labor. Higher wages leads to workers having more income available to consume goods and
services. Therefore, higher wages increase general consumption and as a result need for labor
increases and unemployment decreases in the economy.

Many economists have argued that unemployment increases with increased governmental
regulation. For example, minimum wage laws raise the cost of some low-skill laborers above
market equilibrium, resulting in increased unemployment as people who wish to work at the
going rate cannot (as the new and higher enforced wage is now greater than the value of their
labor). Laws restricting layoffs may make businesses less likely to hire in the first place, as
hiring becomes more risky.

Structural Unemployment
Structural unemployment occurs when a labour market is unable to provide jobs for everyone
who wants one because there is a mismatch between the skills of the unemployed workers
and the skills needed for the available jobs. Structural unemployment is hard to separate
empirically from frictional unemployment, except to say that it lasts longer. As with frictional
unemployment, simple demand-side stimulus will not work to easily abolish this type of
unemployment.

Structural unemployment may also be encouraged to rise by persistent cyclical

unemployment: if an economy suffers from long-lasting low aggregate demand, it means that

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many of the unemployed become disheartened, while their skills (including job-searching
skills) become "rusty" and obsolete. Problems with debt may lead to homelessness and a fall
into the vicious circle of poverty.

This means that they may not fit the job vacancies that are created when the economy
recovers. The implication is that sustained high demand may lower structural unemployment.
This theory of persistence in structural unemployment has been referred to as an example of
path dependence or "hysteresis".

Frictional Unemployment
This type of unemployment is caused by industrial friction, such as, immobility of labour,
ignorance of job opportunities, shortage of raw materials and breakdown of machinery, etc.
Jobs may exist, yet the workers may be unable to fill them either because they do not possess
the necessary skill, or because they are not aware of the existence of such jobs. They may
remain unemployed on account of the shortage of raw materials, or mechanical defects in the
working of plants. On average it will take an individual a reasonable period of time for him or
her to search for the right job. This creates unemployment while they look and this type of
unemployment is normal and temporary in nature. The more efficiently the job market is
matching people to jobs, the lower this form of unemployment will be. However, if there is
imperfect information and people don't get to hear of jobs available that may suit them, then
frictional unemployment will be higher. Therefore, the better the economy is doing, the lower
this type of unemployment is likely to occur. This is because people will usually be able to
find a job that suits them more quickly when the economy is doing well.

Seasonal Unemployment
This is due to seasonal variations in the activities of particular industries caused by climatic
changes, changes in fashions or by the inherent nature of such industries. The ice factories are
closed down in winter throwing the workers out of their jobs because there is no demand for
ice during winter. Likewise, the sugar industry is seasonal in the sense that the crushing of
sugar-cane is done only in a particular season. Such seasonal industries are bound to give rise
to seasonal unemployment.

Cyclical unemployment

The IS-LM Model is used to help and process analyze the effect of supply shocks on the
economy.

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Cyclical, deficient-demand, or Keynesian unemployment, occurs when there is not enough
aggregate demand in the economy to provide jobs for everyone who wants to work. Demand
for most goods and services falls, less production is needed and consequently fewer workers
are needed, wages are sticky and do not fall to meet the equilibrium level, and mass
unemployment results. Its name is derived from the frequent shifts in the business cycle

With cyclical unemployment, the number of unemployed workers exceeds the number of job
vacancies, so that even if full employment were attained and all open jobs were filled, some
workers would still remain unemployed. Some associate cyclical unemployment with
frictional unemployment because the factors that cause the friction are partially caused by
cyclical variables. For example, a surprise decrease in the money supply may shock rational
economic factors and suddenly inhibit aggregate demand.

Keynesian economists on the other hand see the lack of supply for jobs as potentially
resolvable by government intervention. One suggested interventions involves deficit spending
to boost employment and demand. Another intervention involves an expansionary monetary
policy that increases the supply of money which should reduce interest rates which should
lead to an increase in non-governmental spending.

Disguised Unemployment
This type of unemployment is to be found in the backward and the underdeveloped countries
of Asia and Africa. The term ‘disguised unemployment’ refers to the mass unemployment
and underemployment which prevail in the agricultural sector of an underdeveloped and
overpopulated country. For example, if there are four persons trying to cultivate an area of
land that could be cultivated as well by three persons, then only three of these persons are
really fully employed and the remaining fourth person represents disguised unemployment.
The people in underdeveloped countries are outwardly employed but actually they are
unemployed, the reason being that agricultural production would suffer no reduction if
ascertain number of them are actually withdrawn from agriculture. This can also be seen
when the growth of the labour force exceeds the amount of investment made. The lack of
investment is due to shortages in real factors such as shortage of skilled labour, managers,
right type of entrepreneurs, etc. As a result, there is over supply of labour available and these
excess labours are ‘employed” (to be exact, underemployed) in jobs when there are already
enough workers. Therefore, the marginal productivity of such labour is low. This type of
disguised unemployment is caused by the chronic shortage of capital resources in relation to
the rapidly growing population.

Hidden unemployment

Hidden, or covered, unemployment is the unemployment of potential workers that is not

reflected in official unemployment statistics, due to the way the statistics are collected. In
many countries only those who have no work but are actively looking for work (and/or
qualifying for social security benefits) are counted as unemployed. Those who have given up
looking for work (and sometimes those who are on Government "retraining" programs) are
not officially counted among the unemployed, even though they are not employed.

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The statistic also does not count the "underemployed"–those working fewer hours than they
would prefer or in a job that doesn't make good use of their capabilities. In addition, those
who are of working age but are currently in full-time education are usually not considered
unemployed in government statistics. Traditional unemployed native societies who survive
by gathering, hunting, herding, and farming in wilderness areas, may or may not be counted
in unemployment statistics. Official statistics often underestimate unemployment rates
because of hidden unemployment.

Marxian theory of unemployment

Marxists share the Keynesian viewpoint of the relationship between economic demand and
employment, but with the caveat that the market system's propensity to slash wages and
reduce labor participation on an enterprise level causes a requisite decrease in aggregate
demand in the economy as a whole, causing crises of unemployment and periods of low
economic activity before the capital accumulation (investment) phase of economic growth
can continue.

According to Karl Marx, unemployment is inherent within the unstable capitalist system and
periodic crises of mass unemployment are to be expected. The function of the proletariat
within the capitalist system is to provide a "reserve army of labour" that creates downward
pressure on wages. This is accomplished by dividing the proletariat into surplus labour
(employees) and under-employment (unemployed). This reserve army of labour fight among
themselves for scarce jobs at lower and lower wages.

At first glance, unemployment seems inefficient since unemployed workers do not increase
profits, but unemployment is profitable within the global capitalist system because
unemployment lowers wages which are costs from the perspective of the owners. From this
perspective low wages benefit the system by reducing economic rents. Yet, it does not benefit
workers. Capitalist systems unfairly manipulate the market for labour by perpetuating
unemployment which lowers laborers' demands for fair wages. Workers are pitted against one
another at the service of increasing profits for owners.

According to Marx, the only way to permanently eliminate unemployment would be to

abolish capitalism and the system of forced competition for wages and then shift to a socialist
or communist economic system. For contemporary Marxists, the existence of persistent
unemployment is proof of the inability of capitalism to ensure full employment.

Full employment

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Short-Run Phillips Curve before and after Expansionary Policy, with Long-Run Phillips
Curve (NAIRU). Note, however, that the unemployment rate is an inaccurate predictor of
inflation in the long term.

In demand-based theory, it is possible to abolish cyclical unemployment by increasing the

aggregate demand for products and workers. However, eventually the economy hits an
"inflation barrier" imposed by the four other kinds of unemployment to the extent that they
exist. Historical experience suggests that low unemployment affects inflation in the short
term but not the long term. In the long term, the velocity of money supply measures such as
the MZM ("money zero maturity", representing cash and equivalent demand deposits)
velocity is far more predictive of inflation than low unemployment.

Some demand theory economists see the inflation barrier as corresponding to the natural rate
of unemployment. The "natural" rate of unemployment is defined as the rate of
unemployment that exists when the labour market is in equilibrium and there is pressure for
neither rising inflation rates nor falling inflation rates. An alternative technical term for this
rate is the NAIRU, or the Non-Accelerating Inflation Rate of Unemployment. No matter what
its name, demand theory holds that this means that if the unemployment rate gets "too low,"
inflation will accelerate in the absence of wage and price controls (incomes policies).

KEY CAUSES OF UNEMPLOYMENT (General notion)

There are many causes for unemployment, and it is vital that we understand them all to be
effective in combating this great social evil. Only by offering solutions to tackle the causes
of unemployment can we really solve the problem; treating the symptoms is not enough and
will have the same effect as a painkiller: you numb the pain but the problem doesn’t go away
and, what’s more worrying, painkillers are addictive, and so are solutions for the symptoms
of unemployment as opposed to the causes.
Recessions
When the economy is not growing, then jobs aren't being created and unemployment rises.
Combating recessions is done through a prudent fiscal policy that includes incentives to
invest and to spend money, including lower taxation and interest rates. Recessions are a
reason why Conservatives want sustainable growth with a prudent fiscal policy. Recklessness
in public finances means that a recession strikes harder and does a lot more damage.

Over-Regulation
Over-regulation is an important cause for unemployment. Too much burden on a business’
shoulders and that business cannot afford to expand and, with its expansion, to create more
jobs. Because of this, if you are unemployed, it will be almost impossible for you to find
work, and this will be especially critical for students and for anyone who finds him or herself
out of work when they are middle aged. There is too much paperwork involved to do
anything; there are too many regulations that stifle job creation efforts. This leads to a two-
tier system, usually, with those who are already employed having a job for life, and those
who do not have a job are unable to find anything, and are forced to live on welfare. There
are too few job offers for the demand, a shortage that leads to poverty and chronic

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unemployment. This means that adding burdens to the economy will not create new jobs. It
will, in fact, make the amount of new jobs being created decrease.

Skills
To be able to handle a certain job, a person needs a set number of skills. If the person does
not have the skills for a job, then he or she either gets training or he or she is unable to get
that job. When the types of jobs in a certain area change, then people without the right skills
are either able to move to a different area or they are unable to find work. In the meantime,
these new jobs are filled up with new people, who do have the skills these require. A
technology shift can lead to this sort of unemployment, which is structural in nature. The
wrong approach to this problem would be to keep the old jobs going forever, because that
situation is unsustainable. A lot of money will be spent and the people get to keep their jobs,
but they are not given the possibility to improve their situation. The way to solve this issue is
through training.

Lack of Information
A source of unemployment that cannot be overlooked is the lack of information about
available jobs. If people don’t know that jobs are there, then they will not take them. It is also
important that, when people do know about possible employment opportunities for them, they
are able to take them. Dissemination of information is fundamental in any market, and in the
job market it is fundamental as well. The obvious solution for this problem is to be able to
bring information to the people who need it.

UNEMPLOYMENT IN NIGERIA
Unemployment is a problem that each society faces, and each society must find a way to beat
it. Unemployment is one of the developmental problems that face every developing economy
in the 21st century. International statistics portray that industrial and service workers living in
developing regions account for about two-thirds of the unemployed population. Nigeria, since
the attainment of political independence in 1960 has undergone various fundamental
structural changes. These domestic structural shifts have however not resulted in any
significant and sustainable economic growth and development. Available data show that
the Nigerian economy grew relatively in the greater parts of the 1970s, with respect to the oil
boom of the 1970s; the outrageous profits from the oil boom encouraged wasteful
expenditures in the public sector dislocation of the employment factor and also distorted the
revenue bases for policy planning. This among many other crises resulted in the introduction
of the structural adjustment programme (SAP) in 1986 and the current economic reforms.
The core objective of the economic structural reform is a total restructuring of the Nigerian
economy in the face of a massive population explosion.

CAUSES OF UNEMPLOYMENT IN NIGERIA

The fundamental factor that accounts for the high rate of unemployment in Nigeria includes
the following:
i. Poor Economic Growth Rate: The overall situation in the country in the part
of eighties, nineties and even in this decade has been very hostile to economic growth
and development. The high level of corruption, mismanagement of public funds,

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 harsh economic policies and the insecurity of the Nigerian environment coupled
with long – term despotic rule of the military among other factors have dampened
the spirit of economic growth for a long time. The situation in the nineties was
such terrible that analysts have described the period as a lost decade to Nigeria in
terms of economic growth and development.
ii. Adoption of Untimely Economic Policy Measures: Another crucial factor that
has elicited unemployment problem overtime is the demise of the small scale and
cottage industries which operated in both formal and informal sectors. Following the
introduction of the Structural Adjustment Program (SAP) in September 1986
that ushered in liberalization, deregulation and the devaluation program of the
domestic currency, many of the teething domestic firms collapsed. This resulted in
the loss of many jobs and thereby rendering many people unemployed. Although,
these policies were designed to jump start the growth of the economy, but given the
structure of the Nigerian economy, some of the policy packages became out rightly
inimical to the system due to wrong timing.
iii. Wrong Impression About technical And Vocational Studies: The wrong
impression of students about the place of technical and vocational education also
accounts for the deteriorating state of unemployment in Nigeria. There is an
enduring societal biased attitude against technical and vocational education. A
large number of job seekers lack practical skills that could enhance self -
employment. That is why rather than providing jobs for others, the graduate
unemployed persons keep depending on the government and the non-vibrant
private sector for job offers.
iv. Neglect of the Agricultural Sector: The agricultural sector has been the
leading provider of employment in Nigeria especially in the sixties and in the
seventies when the sector provided employment for more than 60 percent of the
Nigerian population. However, unfortunately, in the wake of oil discovery, the
attention on this anchor of the economy was gradually drawn away to the oil sector
where employment capacity is very low. The resulting effect is the large number of
job seekers who have no place in the oil industry. Even with the expansion of the
industry, unemployment has continued to grow at an alarming rate.
v. Poor Enabling Environment: The poor economic enabling environment
that characterizes the economy over the years has continued to pose serious
challenges to employment generation in Nigeria. This, coupled with poor security
environment has continued to hamper investment drives and thereby reducing
the prospects of employment generation. Many job seekers who would have
embarked on self - employment programs are unable to do so because of the hostile
production environment. Others who make attempt are forced to wind up due to
absence of infrastructures and the overall heat of the investment environment.

CONSEQUENCES OF UNEMPLOYMENT IN NIGERIA

The consequences of unemployment in Nigeria are very severe and threatening to the
citizenry and the economy as a whole. The unemployment episode has continued to pose
so many challenges to the survival of the Nigerian nation. While some of these consequences
bother directly on the unemployed, others like epidemics are limitless in effects. They
include:
i. Contributes to low GDP: It is an established economic reality that the size of
the workforce directly impacts a country’s GDP. Not only does the work force
produce manufactured goods or services or agricultural produce in direct
proportion, but also brings in its wake increasing purchasing power, which in turn,

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 fuels economic growth. Thus unemployment contributes to a reduction in the potential
which exists in spurring a country’s GDP.
ii. Contributes to crime and violence: With growing youth unemployment, the
divide between the rich and the poor grows, resulting in social tensions which could
affect the entire fabric of a community, state and the entire country (Niger-Delta).
iii. Contributes to drugs: Due to frustration as a result of not gainfully employed,
most people turn to drugs.
iv. Unproductive labour forces: The most direct impact on the economy of an
unproductive labour force is lost output in terms of goods and services. With no
income tax to collect and the loss of receipts from indirect taxes such as the value
added tax, the government takes in less in tax revenue.
v. Psychological effects: Young men and women, who have put in a decade or two
in schools and colleges, have dreams and aspirations. These are dreams of
securing satisfying jobs following their years of struggle, meeting basic necessities
of life (food, clothing, shelter and healthcare), graduating to a life of comfort and
dignity and, eventually, enjoying the luxuries of life. The trauma of seeing their
dreams shattered week after week, month after month, can and does lead to deep
psychological scars that are very difficult to face at such a young age. These can
impact any individual’s self-esteem and can lead to clinical depression.
vi. Family Support: In a country like Nigeria, where the people retire when they
are not tired and there is no social security net, very often a family depends on
a son or a daughter graduating from school or college to take up employment in order
to support the entire family. When that does not happen, the financial woes are
unimaginably sorrowful.
vii. Law and order: It has been established that educated unemployed are likely to
take to crime- blue collar or white collar crimes- more easily than others. This
arises out of the theory that they would have, at some stage of their careers, seen
good life, even from a distance, and formed their dreams based thereon. When they
fail to see these dreams turn into reality, some turn to crime.
viii. Effect on health: It is equally easy to visualize that lack of steady income could,
apart from the above ills, also lead to inadequate nutrition and adversely affect
health of the youth and their families.
ix. Political Instability: When unemployment grows in a community,
dissatisfaction with the incumbent Government follows. This, in turn, leads to
frequent changes in Governments or formation of unsteady coalitions. Neither is
healthy for long term stable economic policies and this situation could lead to a vicious
circle of political changes. As President Franklin D. Roosevelt had stated, "Not only
our future economic soundness but the very soundness of our democratic institutions
depends on the determination of our government to give employment to idle men."
Youth unemployment (as also underemployment) therefore means to me, “the
saddest sight that fortune’s inequality exhibits under the sun”, as stated at the
beginning of this

POLICIES TO MINIMISE UNEMPLOYMENT IN NIGERIA

Government policies to reduce unemployment must be based upon the types and causes of
unemployment that are prevalent. It may be worth glancing back to that section to remind you
of the major kinds of unemployment; however, we will go into more detail in this section.
General policies such as cuts in direct taxes so should be effective across any kind
of unemployment, as it increases the appeal of any job to any potential employee.

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Real Wage Unemployment
This is unemployment as a result of a kind of market failure, a failure of the labour market to
respond to changes in demand. If demand for workers rises, it is logical that they will demand
greater real wages similarly, if demand falls, workers should expect to suffer lower real
wages for the same work. Real wage unemployment is usually caused by a combination of:

•Strong trade unions - giving employees greater power over deciding wage conditions with
the threat of industrial action (strikes etc.) With strong unions, firms will not be able to
reduce wages when demand is low, leading to bankruptcy (unemployment) or layoffs of
workers (unemployment)

•Wage 'stickiness' - Employees on long term contracts will have a fixed wage over a
long period of time. If a downturn in demand occurs, wages cannot fall immediately in
response - they are 'sticky'

•Minimum wage - This is a characteristic of most modern economies, guaranteeing every

worker a minimum standard of living. Whilst this is undoubtedly wonderful, if the minimum
wage is set too high, the labour market is once again inflexible Government policies to tackle
this form of unemployment are invariably unpopular for workers, as their wage levels are
threatened to the benefit of firms and businesses. However, it is largely appreciated that, for
example, overly strong trade unions can utterly paralyze an economy. Policies to combat real
wage unemployment include trade union reform (reducing their powers); increasing firms'
ability to change wages and encouraging shorter term contracts and ensuring that the
minimum wage level does not adversely impact the economy.

Frictional Unemployment
Remember, this is unemployment generated through incomplete information of the
labour market. This can be solved in two main ways. Firstly, increasing the knowledge of the
local vacancies through government funded 'job centres’ could reduce time between jobs.
Secondly, increasing the incentive to search for suitable jobs (such as reducing
unemployment benefits and lower taxes on wages) could serve the dual purpose of increasing
incentives to search for work, and making more vacancies acceptable to the unemployed
individuals.

Cyclical Unemployment
It is worth noting that this form of unemployment can also be known as Keynesian or
demand-deficient unemployment. Over the economic cycle demand changes, and regardless
of how flexible wages are, unemployment will rise of fall. There are clear links between the
rate of economic growth and the level of unemployment. It is clear that in a depression,
unemployment will rise, as demand for goods and services falls. This could result in a
negative multiplier effect, without government intervention. Policies to reduce the impact of
Keynesian unemployment include:

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• Increased government spending - this includes reductions in taxes. Increased government
expenditure or money supply will cause an outward shift in AD, and may create a multiplier
effect. Theoretically, government spending to pay workers to dig huge trenches and fill them
in again will help, as it increases national income. However, targeted policies to increase the
quality of infrastructure or levels of investment will be more effective. Also, reductions in
direct taxes will encourage more people into work, and also increase the level of disposable
income, hopefully leading to a positive multiplier effect.

• Reduction of interest rates - remember that a fall in interest rates can also stimulate AD.A
fall in interest rates encourages consumption and investment and reflating aggregate demand
by using macro-economic policies to increase the level of aggregate demand. It might also
encourage foreign investment into the economy from foreign multinational companies. In the
diagram below we see an increase in aggregate demand leading to an expansion of aggregate
supply. Because of the increase in demand for output, the demand for labour at each wage
rate will grow - leading to an increase in total employment

Not every increase in demand and production has to be met by using more labour. Each year
we expect to see a rise in labour productivity (more output per worker employed). And,
businesses may decide to increase production by making greater use of capital inputs
(machinery and technology).

Geographical Unemployment
Naturally, policies to reduce geographical unemployment will seek to decrease geographical
immobility of labour. This is the inability of people to relocate from areas with low demand
for labour, to areas with high demand for labour. Policies to reduce geographical
unemployment include:
• Regional Incentives - this is regional policy to increase the incentives for new businesses to
locate in areas of high unemployment, thus reducing regional variations in unemployment
caused by geographical immobility
• Reducing geographical immobility - is the second and more direct method of combating
geographical unemployment. It aims to reduce geographical immobility by reducing barriers
to free movement of workers (such as no border controls and cheap housing). This is more
difficult within a country as the barriers are often social in nature, such as family ties.

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Structural Unemployment
This is the inability of workers to change the kind of employment (for example from
manufacturing to IT) they are in. Left without intervention, this could lead to dangerous long-
term unemployment, whereby workers find it increasingly difficult to find jobs as they
become less desirable the longer they are unemployed. Policies to reduce occupational
unemployment include:
• Retraining - incentives for both companies to retrain and employees to take part in training
to make them more attractive and useful to firms. Governments may also directly take part in
retraining projects where unemployment levels as a result of structural unemployment are
very high

• Reducing geographical immobility - could result in no need for retraining programs, as

worker could simply move to an area in which their skills are in high demand. This
works providing the costs associated with reducing geographical immobility are lower than
those required for occupational-orientated projects such as retraining, and that their skills are
in demand somewhere

REMEDY FOR UNEMPLOYMENT IN NIGERIA

One of the most critical questions facing any government today is how it could reduce the
spate of unemployment among its citizens. No country, whether big or small can deny this
problem. Instead of employment however, what is becoming the glaring reality, is the need to
sack more people. This can easily be explained away on increasing automation, necessity of
cuts on personnel and overhead spending, and improved human resource management, which
always points to trimmer systems. The issue therefore is not to employ, but to sack. How did
the world get to such a pass? The question of engaging idle minds so they don't turn out to be
devil's workshop has continued to be one of the most primary challenges of humanity. For
one, there are too many people to engage. Every year, millions turn 18, out of which many
graduate from schools, with certificates or as failures and pool themselves into the vast ocean
called labour market. Lucky ones who have skills from their education or their chosen
vocations find avenues to employ themselves or get employed. Millions more continue the
'more you look, less you see' struggle. Nigeria's Minister of National Planning had declared
that unemployment rate for 2011 stood at 23.9%; which translates to almost 40 million
citizens.

Another figure from the National Bureau of Statistics had indicated that over 70% of
Nigerians live on a USD a day or less. These figures have actually been rolling over for
decades to reach the monumental level they are today. Governments, apart from the key
responsibility of ensuring security for life and property are also mandated to provide a means
of livelihood for their citizens. Resources to employ are always scarce, useful skills are
always low, while, not addressing the situation is breeding fresh problems for the polity.
Intelligent youths set their minds to do the only thing left to do; use their heads, literally.
They defraud, kidnap, rob, and even do the unthinkable, give up hope and go into suicidal
missions. It is therefore not an option for governments to allow this to happen as the
repercussions are far worse than the fear of the cost of getting everyone engaged.

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Governments, apart from the key responsibility of ensuring security for life and property are
also mandated to provide a means of livelihood for their citizens. Resources to employ are
always scarce, useful skills are always low, while, not addressing the situation is breeding
fresh problems for the polity. Intelligent youths set their minds to do the only thing left to do;
use their heads, literally. They defraud, kidnap, rob, and even do the unthinkable, give up
hope and go into suicidal missions. It is therefore not an option for governments to allow this
to happen as the repercussions are far worse than the fear of the cost of getting everyone
engaged. Now, how do you drastically reduce the number of these unemployed citizens? It is
by coming up with stop gap programmes that can engender hope among them and douse the
desperation that follows their despondence. Not all job seekers are looking for N100,000-a-
month jobs. Most would gladly accept lower pay that could address their immediate needs,
while still looking ahead to better opportunities. These stop gap efforts, by virtue of their low
financial implication can go round many people. Remember the partial withdrawal of
petroleum subsidy at the dawn of 2012? It sparked off recriminations within the polity such
that government had to guarantee that the funds accrued from the subsidy withdrawal would
be re-infused into the system, through a Subsidy Reinvestment and Empowerment
Programme, which was quickly launched early February, 2012. One half goes into
development of critical infrastructure and the other in developing social safety nets, the funds
are shared among the three tiers of Government.

The safety net angle led to the introduction of the Community Services, Women and Youth
Empowerment Program in October, 2012, which oversees the Community Services Scheme,
meant for the unskilled and uneducated. So far, about 120,000 Nigerians are benefiting from
the scheme. The Graduate Internship Scheme is meant for unemployed graduates. Each
beneficiary is to benefit for a period of one year, after which it is assumed they would have
improved their employability in the labour market, or even get retained by their firms of
engagement, or even seek other opportunities through other government programmes like the
Youth Enterprise with Innovation in Nigeria (You Win), where they can develop business
plans and get loans to run their businesses independently.

The workability of the Graduate Internship Scheme depends largely on the involvement of
Governmental and Non-Governmental Organizations as well as private business enterprises
in all sectors of the economy. They need to request for such interns. Over 70,000 Nigerian
graduates, far higher than the 50,000 per year threshold of the programme have applied and
have been registered; only a few hundred however, have been engaged. The firms have a
number of advantages if they engage the graduates. They get free labour at government
expense as government will pay the monthly stipends of the interns, they get to select the best
interns to join their workforce and they get a cost-free opportunity to render their Corporate
Social Responsibility. The project is also planning other incentives like tax rebates for
companies registered with the Project. The problem of unemployment is having its impact on
all citizens and all sectors of the economy. It is only through inter-sectoral synergy therefore,
that the problem of youth unemployment can be tackled. Government has provided the funds
and the enablement, the youths are willing, registered and ready; what remains is for firms to
do their own bit by engaging them

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