The Impact of Organizational Culture on Employee Retention

The Impact of Organizational Culture on Employee Retention

The Issue of Unemployment and lack of Economic Opportunities

The modern economy on a global scale mostly follows elements of capitalism, with only some developed nations adhering to socialism principles. In this global society, there is an underlying assumption for every able person to have the ability to hold a job and earn their living for a sustainable good life. This is promoted as an ideal state of any economy where an individual can start education or skill development in a field that interests them and get a good-paying job in the same field without facing the issue of job security. However, in the current state of the modern economy, the reality seems far from the ideal state as a significant number of people cannot even find a job that hires them in return for a salary. This population group is referred to as the unemployed in society and is then subjected to live in poor conditions and with minimum resources.

Unemployment is a highly disruptive trend in any economy as it leaves a significant number of people under poverty with no feasible way of taking care of their physiological needs and desires. Despite forcing victims to live in an unsustainable and uncertain way of security, unemployment has also been linked to issues like poverty, depression, and crime rate growth (Tefft, 2011). As a society, it is essential to tackle the situation and the root causes that cause this problem to grow to such extent that even people willing to work for a minimum wage are not able to find a job. Finding a solution to this problem that works on a global scale can be difficult, but it is necessary for the overall good of a state’s citizenry.

Unemployment is one of the biggest societal problems facing the global community today, and therefore, finding a solution to this problem is ineluctable. In light of this essay, “unemployment benefits” is recommended as a solution to this problem of unemployment owing to the commendable impact it will have on the overall economic performance.

Background

Unemployment is defined as the inability of an individual to get a job even when they are actively seeking and trying to get a job. Currently, the global unemployment rate is about 5%, which is at its lowest in a decade and represents the levels of unemployment that were before the global financial crisis of 2008 (“Unemployment, total (% of the total labor force) (modeled ILO estimate) | Data”, 2020). This indicates that about 5% of all people willing to work are not able to get a job and have to somehow manage their lives and living expenses without relying on a salary. This leaves over 170 million people around the globe who are currently unemployed and need to find alternative ways of making a living or surviving in a society that heavily depends on the ability of a person to pay for their needs (“Unemployment, total (% of total labor force) (modeled ILO estimate) | Data”, 2020).

Unemployment is an issue here for the global community as it represents the inability of the society to take care of its members by having little economic opportunities available to sustain all members of the nation. This statistic should be more concerning as it currently represents the lowest number in a decade and at a time when the economy has been positively turned around, and the global economy has recovered from the previous recession. If another recession or financial crisis were to hit the economy now, which has historically been a constant reoccurrence in the global economy, the unemployment numbers would grow significantly higher again. Among the reasons behind the increased unemployment rate are flooding of most degree courses, poorly structured education curriculum and systems rampant corruption, and incompatible government policies. Unemployment is a significant threat to the economic development of a state’s citizenry following their failure to afford basic needs and services.

Literature survey with statistics

Unemployment, by its very definition, leaves a person without a job that pays them; hence, how are the unemployed supposed to take care of themselves, their families, and their needs? When the discussion is about the unemployed, it should be recognized that in most developed countries, where the current conversation or political debate is about raising the minimum wage because people are not able to live a comfortable life with it. How are people with no salary at all, supposed to live? The underlying problem and root causes behind unemployment can vary from one point to another; it cannot be denied that unemployment is a significant problem for any nation. It allows some people to fall into poverty with no way of getting back out as they do not have a job that pays them; more so, they end up struggling to put food on the table resulting in stagnancy. Currently, in some societies, the unemployed who are not with their families fall to the lowest standards in the community and often end up struggling to make ends meet. In other cases, these people end up relying on social services and unemployment benefits to keep up with their daily needs.

The issue of unemployment is not a simple contemporary issue as it does not affect just the unemployed. It also causes significant impact on the loved ones of the unemployed. For instance, an unemployed person that has a family, but without resources to care and provide for them. The problem has been significant, concerning, and persistent, though with no considerable solution implemented so far. In their study on unemployment, Fougère, Kramarz, and Pouget (2009) were even able to link the rate of unemployment with higher intent and probability of youth engaging in crime and illegal activities to earn a living to support their basic needs (Ali, 2014). According to them, unemployment causes poverty and an increase in the crime rate.

Figure 1 – Global unemployment rate from 2009 to 2019 (Plecher, 2020)

The statistics shown in figure 1 indicate that while there is certainly a decline in the global unemployment rate, the positive changes are more indicative of the economy recovering from the negative impact of the 2008 financial crisis. Even more, than a decade later, the rate is still accounted for about 5% of the able workforce unable to find work.

Solution proposed

The issue of unemployment is a societal problem that needs to be solved promptly as it prevents a significant part of the population from living a decent life. Keeping the problem intact would mean that the society is not only failing those who are currently unemployed, but also their children and other dependents, making it difficult for them to receive formal education that would be highly beneficial for their own futures. The ideal way to combat unemployment would be to regularly create new jobs to recruit new employees entering the labor force, but this would still be restricting other job-seekers due to location and skill compatibility.

Keeping the factors of unemployment, its impact on the society, and the need for unemployed people to have more economic opportunities, the recommended solution for this problem is to expand on the unemployment benefits in the countries where the unemployment rate is higher. These benefits refer to the social security program that takes care of unemployed people by providing them with the financial support to help sustain their needs (Shahidi, Muntaner, Shankardass, Quiñonez & Siddiqi, 2019). This is a direct way of supporting the unemployed by providing them with a safety net while they try to find better economic opportunities. Unemployment benefits are an optimal solution to the problem of unemployment because it is effective and is one of the most economical solutions (Lee, 2019).  According to a research study conducted by the United States Congressional Budget Office, every $1 billion in the Unemployment Insurance Programs result in the creation of about 19,000 new jobs for the people and every $1 spent on the unemployment benefits, the economic stimulation yield increases by $1.64, overall signifying the importance and efficiency of this method of solving unemployment. (Amadeo, 2019).
These benefits allow the unemployed to have a better focus on job searching.

However, to make such an effort successful, governments would need to raise awareness of the program to reach more unemployed people. Some data for this purpose is shown in the figure below:

Figure 2 – Unemployment benefits application rate in the United States (US Department of Labor, 2020)

The figure shown above clearly indicates that unemployment benefits should be more accessible to the public while also expanding the budget for the whole program. This will not only create more jobs and economic opportunities but also prevent the unemployed from having to live in poverty (E.O, 2015).

Ethical assessment of the solution

Unemployment is a very complex social and economic issue that needs to be resolved very promptly. However, there is no absolute and assured way of solving the problem of unemployment due to the extremely high number of societal, economic, and political factors surrounding the issue. Therefore, even in the case of the proposed solution that aims to expand on the unemployment benefits, some moral and ethical issues need to be considered first.

Prompt and explicit support from the government to expand unemployment benefits to the unemployed would help them live a better life. However, this support for the unemployed might raise some other issues, such as the government not considering other marginalized groups to be deserving of the same treatment (Schmieder & Trenkle, 2020).

The proposed solution of expanding the unemployment benefits tries to boost the economy while also providing decent economic support to the unemployed. One negative ethical outcome that can come out of this proposal is that some unemployed people might get complacent with the benefits and continue to consume it without trying to get a job (Kyyrä & Pesola, 2020). However, the possible negative outcome is that people who are not actively searching for a job would benefit from the same benefits (Kyyrä & Pesola, 2020). This raises the concern about the efficiency of the unemployment programs and whether the spending would be better in some other areas of development. Another concern would be the justification of the budget for the unemployment benefits in governments with significant economic deficit.

Conclusion

It has been identified that unemployment is one of the most significant social issues facing the global community today. One of the effective ways of solving the problem is to expand on the unemployment benefits. Unemployment benefits are found to have a boosting effect on the economy as a whole in all sectors, which in turn creates more economic opportunities for the unemployed. Some ethical concerns are surrounding the proposed solution of offering unemployment benefits such as the efficiency of the program and misuse of the funds by people taking advantage of the benefits. However, despite these ethical and economic concerns, the society needs to deal with the problem of unemployment adequately as it not only impacts the wellbeing of the unemployed; it also jeopardizes the future of their descendants.

References

Ali, M. (2014). Youth unemployment a global security challenge. Harvard International Review, 36(1), 13.

Amadeo, K. (2019). Unemployment Solutions and What’s Most Cost-Effective. Retrieved from the Balance: https://www.thebalance.com/unemployment-solutions-3306211

E.O, M. (2015). Youth unemployment saga in Nigeria: implications for security challenges and economic development. Advances In Social Sciences Research Journal, 2(4). doi: 10.14738/assrj.24.538

Fougère, D., Kramarz, F., & Pouget, J. (2009). Youth unemployment and crime in France. Journal of the European Economic Association, 7(5), 909-938.

Kyyrä, T., & Pesola, H. (2020). Long-term effects of extended unemployment benefits for older workers. Labour Economics, 62, 101777. doi: 10.1016/j.labeco.2019.101777

Lee, Y. (2019). Blame for unemployment and support for unemployment benefits. International Review Of Public Administration, 24(1), 1-16. doi: 10.1080/12294659.2018.1560959

Plecher, H. (2020). Global unemployment rate up to 2019. Retrieved from Statista: https://www.statista.com/statistics/279777/global-unemployment-rate/

Schmieder, J., & Trenkle, S. (2020). Disincentive effects of unemployment benefits and the role of caseworkers. Journal Of Public Economics, 182, 104096. doi: 10.1016/j.jpubeco.2019.104096

Shahidi, F., Muntaner, C., Shankardass, K., Quiñonez, C., & Siddiqi, A. (2019). The effect of unemployment benefits on health: A propensity score analysis. Social Science & Medicine, 226, 198-206. doi: 10.1016/j.socscimed.2019.02.047

Tefft, N. (2011). Insights on unemployment, unemployment insurance, and mental health. Journal of Health Economics, 30(2), 258-264. doi:10.1016/j.jhealeco.2011.01.006

Unemployment, total (% of total labor force) (modeled ILO estimate) | Data. (2020). Retrieved 7 March 2020, from https://data.worldbank.org/indicator/SL.UEM.TOTL.ZS

US Department of Labor. (2020). Unemployment Insurance Data. Retrieved from US DOL: https://oui.doleta.gov/unemploy/DataDashboard.asp