GS 336: Work and Society

Lecture 5
1: Introduction to Work

Topic: Unemployment

Outline/Objectives
 What is Unemployment?
 Key Concepts to Understand Unemployment
 Measurement of Unemployment
 Unemployment and Household
 The Social Aspects of Unemployment
 The Politics of Unemployment
 The Experience of Unemployment
 Unemployment in Saudi Arabia
What is Unemployment?
In economics, unemployment refers to the condition of unwanted job
losses, or willing workers without job. The willingness of the unemployed
workers to be employed is the key to the idea.

IF a person is:

• Physically fit
• Mentally sound
• Well qualified
• Willing to work at prevailing wage rate

BUT does not get a job – this situation is called UNEMPLOYMENT

i.e. Being out of work but available for work = Unemployment

Key Concepts to Understand/Measure
Unemployment?

 Adult Population

 Discouraged Worker

 Labor Force

 Labor Force Participation Rate

 Unemployment Rate
Key Concepts to Understand/Measure
Unemployment?

1. Adult Population
Usually above 15 are considered adult by most organizations in
economic sense.

2. Discouraged Worker

In economics, a discouraged worker is a person of legal employment

age who is not actively seeking employment or who does not find
employment after long-term unemployment. This is usually because an
individual has given up looking or has had no success in finding a job,
hence the term "discouraged". In some cases, a variety of factors
including a shortage of jobs in their locality or line of work; discrimination
for reasons such as age, race, gender, religion, and disability; a lack of
necessary skills, training, or experience; or, a chronic illness or disability
– all contribute towards discouraging workers.
Key Concepts to Understand/Measure
Unemployment?

1. Adult Population
Usually above 15 are considered adult by most organizations in
economic sense.

2. Discouraged Worker

In economics, a discouraged worker is a person of legal employment

age who is not actively seeking employment or who does not find
employment after long-term unemployment. This is usually because an
individual has given up looking or has had no success in finding a job,
hence the term "discouraged". In some cases, a variety of factors
including a shortage of jobs in their locality or line of work; discrimination
for reasons such as age, race, gender, religion, and disability; a lack of
necessary skills, training, or experience; or, a chronic illness or disability
– all contribute towards discouraging workers.
Key Concepts to Understand/Measure
Unemployment?
3. Labor Force: The total number of people employed or seeking
employment in a country or region. Also called work force.

4. Labor Force Participation Rate refers to the percentage of people

who are either employed or are actively looking for work.

Example: 478,300,000 – Labor Force available in India in the year 2010.

Source: The World Bank Indicators.

Key Concepts to Understand/Measure
Unemployment?

5. The rate of unemployment in a country is measured by

the following formula:

Unemployment Rate = Labor Force – Employed Labor X 100

Labor Force

OR

Unemployment Rate = Number of Unemployed X 100

Labor Force
Quick Facts
 Unemployment is lack of the full utilization of resources, and eats up
the production of the economy;

 Unemployment is highly and negatively correlated with the

productivity of the economy’s Labor Force Participation Rate;

 Unemployment management is one of the toughest job by any

government in the world;

 Along with price level, unemployment is probably the most

observable economic indicator that the general public complains
about the government;

 Unemployment Rate can be anywhere between 1% ~ 30% (beyond

is very much unlikely), and a healthy economy is believed to have an
Unemployment Rate around 5%;

 Unemployment Rate is highest among young workers aged between

15 and 24.
Unemployment and Household…
Unemployment may have considerable consequences on
household. For example, an unemployed head of the
household (irrespective of gender) can double the chances
of the rest of the adult family members being unemployed
(Payne, 1987).

Unemployment relates to marital status. For example,

married men are less likely to be unemployed like their
single counterparts, because the domestic responsibilities
and household burden can push men to work. Also married
persons are more likely to seek and retain employment
than single ones. Employers also sometimes prefer
married men because of their domestic commitments.
However, it is the opposite for young married women
because of domestic responsibilities and children.
…Unemployment and Household

Unemployment operates in reverse when

marriages break down. For example,
unemployment among widowed, divorced, and
separated men is almost double that of married
men (Payne, 1989).

However, the relation between household and

unemployment is often influenced by other factors
such as the number of unemployed involved, the
stage in the life cycle of the family, and the extent
of their family networks within the community.
The Social Aspects of Unemployment…
The consequences of unemployment are different for
different classes. For example, middle class persons,
according to Fineman (1983), suffer greater status collapse
than the working class. Redundancy (unemployment of
previously employed people) of skilled people sometimes
takes them a while to find a fresh and new job compatible
with their past experience---individual problem.

In effect, a social problem (unemployment) is experienced

as a personal problem but often the responsibility for the
issue is put on the social structure and policies, and might
lead to struggle for restructuring the system through union
strikes/protests and disobedience.
…The Social Aspects of Unemployment

Redundancy causes unemployment, often correlated with

the efficiency and track records of the redundants i.e. the
efficient worker is likely to be redundant and if he does, he
will be able to find the new job easily.

Unemployment has been correlated with other problems

such as suicide, consistently destructive thoughts, ill-
health, drug addiction, depression and frustration, despair
and chronic lethargy.
The Politics of Unemployment
Specific employment policy of each state
determines the level of unemployment.

In some countries such as Switzerland and

Austria (recently in Saudi Arabia) it has been the
policy of repatriating foreign workers to create
employment opportunities for the local/native
population.

Technology has least to do with unemployment

e.g., Japan has the highest technological
development and the lowest unemployment ratio
among the nations.
The Unemployment Experience…

In industrial cultures,

dictated by work ethics,
the experience of
unemployment can be of
great personal shame and
guilt.

What unemployed men do

when not searching for
work?
…The Unemployment Experience
According to literature, unemployed people may have following
experiences:

• Many prefer to maintain appearances by being out of the house during

conventional working hours;
• They do not undertake any kind of constructive activity;
• The unemployed destroys the very structure that employment
generates. For instance: the structure of time, routine, status and
social networks.
• Given the excessive amount of time, the unemployed ought not to be
persistently late for interview but they often are (Miles, 1983);
• They ought to spend extra time on careful budgeting but they appear
to lose interest in such details;
• They ought to have more time to undertake leisure activities but they
seem to retreat from all such social interactions;
• Their interaction is always with the same like minded/other
unemployed people.
Unemployment in Saudi Arabia
 Homework Assignment

What are various social aspects of

unemployment in Saudi Arabia?
 Thanks!
Any Questions?