Unemployment in Global Recession Scenario Essay Example

a job but unable to secure one, those seeking another job after leaving their previous one causing temporary employment gap, and people lacking necessary qualifications for positions they are pursuing. Both new individuals entering the workforce and currently unemployed individuals influence this rate. Additionally, payroll employment data from non-farm industries provides crucial information on hours worked, earnings, and employment at national and regional levels.

Unemployment is a major economic indicator that governments closely monitor. Analysts and the Federal Reserve consider an increase in the unemployment rate as a sign of a weak economy, which may lead to implementing monetary policy easing. Sectors like housing, financial services, and building materials are witnessing a global decline in job opportunities.

Moreover, experts forecast a 25% chance of a more severe and prolonged recession resulting from major financial institutions' failure due to the mortgage-based investment system. This could lead to even stricter credit conditions hindering potential growth. The unemployment surge has now reached a level where it reflects the severity of recessions in export industries such as aircraft technology and software. However, equipment from companies will help mitigate the depth of this recession.

Furthermore, the stimulus package aims to curtail the duration of the recession while providing assistance. Unemployment remains an international concern with alarming statistics – there are currently 250 million unemployed individuals worldwide, with over 140 million people earning less than $2 per day.

The United Nations International Labour Organization report states that unemployment and low wages are a growing problem worldwide. Despite economic growth, unemployment and poverty rates have increased. Unemployment affects inflation and national economic growth. Although employment opportunities and industrial growth rates have risen, the number of unemployed

individuals has either remained steady or increased annually. In 2005, global unemployment reached 195 million with a 6% economic growth rate. The following year saw no change in economic growth rate; however, in 2007, unemployment figures slightly increased while global economic growth decreased from 6.3% to 4.9%. It is important to note that job creation and economic expansion are directly related - as job opportunities increase, so does economic growth; conversely, when unemployment rises, it hampers economic development. Thus, maintaining a strong connection between growth and employment is crucial.

The main requirement for reducing unemployment is to establish stable and recognized job opportunities for all workers. This ensures a decrease in the unemployment rate and an annual increase in income for each worker. In many households, both parents and children are employed, but their earnings are insufficient to meet basic needs and provide security. This ongoing poverty highlights the importance of prioritizing job security and adequate income for every worker to support their family's basic needs and productivity. Only then can we achieve sustainable global growth, even in the face of a global shortage of employment opportunities as productivity continues to rise.

In just four years, from 1994 to 1998, the net worth of the top 200 wealthiest individuals worldwide increased by 200%, surpassing $4 billion. The total assets held by three billionaires alone exceed those of numerous underdeveloped countries with populations exceeding 600 million people. Shockingly, over 880 million individuals from these underdeveloped countries lack access to proper healthcare expertise. This clearly illustrates the significant disparity between rich and poor populations. In 1997, there was a staggering income gap ratio of 74 to one between the

richest and poorest countries.In addition, a mere 19% of the global population controlled 71% of global business sales and services, consuming seventeen times more than the world's poorest individuals. Unemployment is a universal problem that contributes to inequalities across nations, particularly affecting the poorest countries. During the 1990s, Foreign Direct Investment (FDI) mainly benefited only 15 to 20 developing nations, leaving others to face financial struggles and unemployment challenges.

Unfortunately, this reality predominantly affects the poorest countries. The impact of unemployment varies among different groups of people, with over 45% of the global workforce consisting of young individuals. Specifically, more than 86 million young people suffer from unemployment, particularly those aged between 15 and 24 who are vulnerable.

Furthermore, there exists a significant disparity in employment opportunities between men and women. In terms of gender inequality in employment rates, only about half (49.6%) of women above the age of fifteen were employed in both 1996 and 2006 compared to approximately three-quarters (75%) of men during those years.

The consequences resulting from youth unemployment are substantial and encompass material hardship as well as physiological and psychological challenges. Unemployment often drives individuals towards substance abuse or engagement in criminal activities as forms of self-destructive behavior.

Youth unemployment is a major concern due to excessive job demands, high wages, and a large labor force. Unemployment rates vary across sectors: the service sector saw a slight increase in global employment rate from 39.5% in 2006 to 40% in 2007, while overall agricultural employment worldwide slightly decreased from 39.7% in 2006 to just 38.7% in 2007. In India, agriculture used to heavily rely on with over 75% of the population directly or indirectly dependent

on it before 1996. However, there has been a complete reversal within the agriculture sector as labor force participation declined significantly. This led many individuals to migrate from rural areas to urban areas, resulting in an increase of unemployment and intense competition for jobs specifically located in urban regions. On a global scale, more than 21% of individuals are employed within the industry sector.

Unemployment rates differ worldwide, with developed economies and European countries experiencing a notable drop in unemployment to 0.6%. However, the United States is also affected by unemployment. In East Asia, the unemployment rate has decreased to 3%. Globally, the Middle East and North Africa have seen the highest increase in unemployment at 12.2%, followed by Sub-Saharan Africa at 9.8%. Within these African nations, an astonishing 80% of individuals live on less than $2 per day. The poverty level in Africa is expected to increase by another 14 million people in the future years. Latin America is also significantly impacted by both unemployment and poverty. Asian countries such as Indonesia, South Korea, Malaysia, the Philippines, and Thailand collectively provide a total of 1.3 crore employment opportunities. Nonetheless, Indonesia has witnessed a decline in actual employment ranging from 0 to 65%. Job insecurity remains a prominent concern both regionally and globally.

The legal protection of works worldwide and the high number of jobs without contracts present challenges due to global competition. In Europe, job insecurity is a result of unstable economic growth affecting 35 million individuals. Moreover, limited available workspaces exacerbate unemployment in underdeveloped countries with growing populations. A report by Macro Annunziata, chief economist at Italian bank Unicredit, predicts that Europe's economic situation will

be worse in 2009 than in 2008. Additionally, an ILO report from 2007 emphasizes the significance of a strong relationship between job creation and growth in order to maintain or reduce unemployment rates. The report underscores the importance of creating decent and productive jobs to alleviate poverty among working families and promote future development and economic growth.

The rise in productivity and slower employment growth demonstrate the impact of economic growth. Global production increased by 26%, while the employment rate only rose by 16.6%. However, fluctuations occurred due to increasing prices of food and energy caused by rising demand in the rapidly expanding world economy. Juan Somavia, ILO's director general, acknowledged that global unemployment did not decrease despite robust economic growth.

The 2008 predictions suggested that the labor market would have lower capacity to maintain employment growth compared to 2007. As a result, the future may be challenging, with increased unemployment potentially leading people down the wrong path.