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- Referred also as economic problems, which asserts that an economy’s finite resources are
insufficient to satisfy all human needs and wants.
- This also to refer to irregular activity and unfortunate situation of the economy caused by
various factor that would hinder for economic growth and development.
Note: In this chapter, we will discuss three important factors relating to economic affairs and
problems, such as unemployment, globalization and sustainable development.
UNEMPLOYMENT
Unemployment
-Unemployment refers if a person is determined to look for a job/work yet unable to find a job and
there is no available means of livelihood.
- It is those people in the workforce or pool of people who are available for work that does not have
a job.
-Unemployment does not include people who stopped looking for a job a few time/weeks due to
various reasons such as leaving work to pursue higher education, retirement, disability, and
personal issues. People who are actively seeking for a job anywhere are not considered
unemployed.
-Usually measured by unemployment rate, which is dividing the number of unemployed people by
the total number of people in the workplace, unemployment serves as one of the indicators of an
economy’s status.
- Economy is in its most developed and prime condition if there is full employment which means
that everyone who seeks and is able to work with decent work, professionally or not.
Long-term unemployment vs. Short-term unemployment
Unemployment that lasts longer than 27 weeks even if the individual has sought employment in the
last four weeks is called long-term employment. On the other hand, short –term employment,
for obvious reasons, happens when an individual who sought for work yet had not able to find for a
job for less than 27 weeks.
Types of Unemployment
1. Cyclical unemployment
- Also called the ‘demand deficient unemployment’. When a natural business cycles bring
about a loss of jobs. This is the biggest cause of unemployment that happens especially
during a recession. When there is a reduction in the demand for the company’s products or
services, they will most likely making cut back too in their production, making it
unnecessary to retain a wide workforce within the organization. In effect, workers are laid
off.
2. Seasonal Unemployment
- When seasonal cycles reduce the needs for certain jobs. There are certain jobs that come up
at certain times of the year, or just during a certain seasons. Those seasonal cycles will
reduce the need for certain jobs at certain times of the year.
3. Frictional unemployment
- Refers to workers who are in between jobs. An example is a worker who recently quit or
was fired and is looking for a job in an economy that is not experiencing a recession. It is not
an unhealthy thing because it is usually caused by workers looking for a job that is most
suitable to their skills.
4. Structural unemployment
- Happens when the skills set of a worker does not match the skills the demands of the job
available or if the worker cannot reach the geographical location of the job. It can also
happen when there is a technological change in the organization, such as workflow
automation.
5. Voluntary unemployment
- Happens when a worker decides to leave a job because it is no longer financially fulfilling.
An example is a worker whose take-home pay is less that his cost of living.
6. Casual Unemployment
- Happens when work is available for daily or weekly basis. Example are those who work in
construction.
Causes of employment
Unemployment is caused by various reasons that come from both the demand side (or the
employer), and the supply side (or the worker).
From the demand side, unemployment may be caused by high interest rates, global recession, and
financial crisis. From the supply side, frictional unemployment and structural unemployment play a
great role.
Effects of unemployment
The impact of unemployment can be felt by both the workers and the national economy and can
create a ripple effect.
Unemployment causes workers to suffer financial difficulties that may lead to emotional
destruction. When it happens, consumer spending, which is one of an economy’s key drivers of
growth, goes down, leading a recession or even a depression when left unaddressed.
Unemployment results in lowered purchasing power, which in turn causes lowered profits for
businesses and leads to budget cut and workforce reduction. It creates a cycle that goes on and on
and on. Everyone loses in the end.
These negative effects could be categorized into:
1. Loss / lack of income or money
2. Health issues
3. Economic issues
4. Social issues
History of Globalization
Globalization as term came to prominence in the 1980s. Although many consider this process a
relatively new phenomenon, globalization has been happening for millennia. The Roman Empire,
for example, spread its economic and governing systems through significant portions of the ancient
world for centuries. Similarly, the trade routes of the Silk Road carried merchants, goods, and
travelers from China through Central Asia and the Middle east of Europe and represented to
another wave of globalization. European countries had significant investments overseas in the
decades prior to World War I, prompting some economists to label prewar period as earlier golden
age of globalization.
Globalization has ebbed and flowed throughout history, with periods of expansion, as well as
retrenchment. The 21st century has witnessed both. Global stock market plummeted after the
September 11, 2001, terrorist in the United States, but rebounded in subsequent years.
Overall, however, the early 21st century has seen a dramatic increase in the pace of global
integration, driven primarily by raid advances of technology and telecommunications. In general,
money, technology and materials flow more swiftly across national boundaries today than they
ever have in the past. The flow of knowledge, ideas and cultures are flowing with increasing speed
as well enabled by the near instantaneousness of global internet communications.
Benefits of Globalization
Globalization creates new markets and wealth, and promotes greater cultural and social integration
by eliminating barriers.
Proponents of globalization point to the rising economies of poor countries benefiting from
companies moving operations there to minimize costs. Proponents of globalization believe it allows
developing countries to catch up industrialized nations through increased manufacturing,
diversification, economic expansion, and improvements in standards of living.
Experts generally acknowledge globalization brings more tightly integrated global economic
markets. Outsourcing by companies brings jobs and technology to developing countries. Trade
initiatives increase cross-border trading by removing supply-side and trade-related constraints.
Globalization has advanced social justice on an international scale, and advocated report that it has
focused attention on human rights worldwide.
Criticisms/ Risks of globalization
Critics blame the elimination of barriers for undermining national policies and cultures and
destabilizing advanced labor markets in favor of lower-cost wages elsewhere.
Some critics say that moving operations to minimize costs to rise the economies of poor countries
could lower living standards in developed countries by eliminating jobs.
Globalization could carry greater potentials for global recession if countries are not able to work
together to implement effective economic policies that reduce the risk.
One clear result of globalization is that an economic downturn in one country can create a domino
effect through its trade partners.
Globalization detractors argue that is has created a concentration of wealth and power in the hands
of small corporate elite which gobble up smaller competitors around the globe.
Types of Globalization
1. Economic Globalization
- Since World War I, the result of global economic organizations are seen most readily in
those industries, such as the auto and online retailing, that require vast supply chains.
- Global and regional trade agreements serve as prime movers for economic
globalizations. Among the most impactful global agreement is the General Agreement
on Tariffs and Trade (GATT), from which the World Trade Organization (WTO)
sprung. Significant regional trade agreements include the North American Free Trade
Agreement (NAFTA), the Asia-Pacific Economy Cooperation (APEC), and the
European Union (EU).
2. Political Globalization
- The 20th century saw a great rise in governmental and non-governmental organizations
that transcend national political systems that look inward. These organization include
United Nations (UN), International Monetary Fund (IMF), the World Bank, the
Asian Development Bank, the African Union, and among others.
- International tribunals also came into power I the 20 th century, reflecting increased
globalization. They include International Court of Justice (ICJ) which is the principal
judicial organ of UN, and the International Criminal Court (ICC) which is an
independent judicial body with jurisdiction over persons charged with genocide, crimes
against humanity and war crimes.
3. Cultural Globalization
- Refers to the transmission or exchange of ideas, meanings, values, and artistic
expressions of cultures around the world in such way as to extend and intensify social
relations.
- Global organizations related to cultural globalization had sprung, like the United
Nation International Convention on Economic, Social and Cultural Rights
(UNICESCR), and Association of Southeast Asian Nations (ASEAN)
- The rapid development of information technology has put much of the world –
particularly industrialized countries- in a state of near-constant contact. Advocates of
cultural globalization point to improved acknowledgement of human rights on a global
scale and shared understanding of impact on the environment.
Institution
- Institution is a set of folkways ad mores into unit which serves a number of social functions.
A social structure in which people cooperate and which influences behavior of people and
the way they live.
- An organized system of social relationships which embodies certain common values and
procedures and meets certain basic needs of society.
- This also to refer ‘Social Institution’ which is a basic and formal structure devised to meet
the basic social needs such as stability, law and order and clearly defined roles of authority
and decision making.
- Every institution plays a vital role in the process of globalization. Through institution the
rise and fall of globalization would be considering to the participation and involvement of
every institution concerned.
Major Social Institutions and their Functions
1. Family. The most basic social institution in a society, and is a system of organized
relationship involving workable and dependable ways of meeting basic social needs. Family
is necessary to procreate or to have children to preserve generations and posterity. In
family nurturing and teaching values starts.
2. Education. The process of socialization which begins informally at home then formally in
educational institutions. Education as an institution helps develop knowledge, skills,
attitude, and understanding of the people and strive to make them competent members of
the society. Education widens the mental horizons of the people and make them receptive
to new ideas. Education creates working, functioning and literate adults.
3. Government. Government as political institution, administers the regulatory functions of
law and order, and maintains security in society. Form of government and its method of
working depends on the accepted patterns of behavior in society. Government provides and
preserve social peace and order.
4. Economics. Economy is the production, consumption and distribution of goods and
services. Economy provides basic physical sustenance of the society by meeting the needs
for food, shelter, clothing and other necessary supply and services. Economic institution
includes agricultural industry, marketing, credit, and banking system, co-operatives, etc.
5. Religion. The belief in supernatural. Religion constitute a set of beliefs regarding the
ultimate power in the universe, the ideal and proper pattern of behavior and ceremonial
ways to expressing these beliefs.
6. Mass Media. It plays a crucial role influencing people’s mind. Media plays a constructive
role in today’s society –from increasing public awareness to collecting views, information,
and also the attitude of the people towards certain issue. The power of mass media has
allowed it to penetrate the lives of more people and therefore influence how they act and
think.
7. Non-government Organization (NGO). NGO activities include, but not limited to,
environmental, social advocacy and human rights work. They can promote social or political
change on a broad scale or very locally. NGOs are important part of democratic society. It
enhances social integration, implementation of the principle of subsidiarity, building civil
society, social dialogue and participatory democracy.
MNC
NGO
IO
Religion Education
Economics Government
8. Multinational Corporation (MNC). A worldwide enterprise in which a corporate
organization that owns or controls production of goods and services in at least one country
other than its home country. It has workforce that includes people of diverse backgrounds
in all department and offers them equal opportunity for input and advancement within the
company.
9. International Organization. These are organizations established by a treaty or other
instrument governed by international law and possessing its own international personality.
These are central focus of international relations scholarship as well as policy making
efforts around the world. It can provide and encourage various countries to work together
to achieve common objectives and foster cooperative behavior.
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SUSTAINABLE DEVELOPMENT
Sustainable Development
- The development that meets the needs of the present without compromising the future
generations to meet their own needs.
- It is an economic and social growth that does not exhaust the resources of the host
country; respects and safeguards it economic, cultural, and natural environments;
creates income chains of enterprises; builds indigenous institutions that involve and
empower citizenry
- The organizing principle for meeting human development goals while simultaneously
sustaining the ability of natural systems to provide the natural resources and ecosystem
services upon which the economy and society depend.
- Sustainable development ties together concern for the carrying capacity of natural
systems with the social, political, and economic challenges faced by humanity.
- Sustainability can be defined as the practice of maintaining world processes of
productivity indefinitely by replacing resources of equal or greater value without
degrading or endangering natural biotic systems. Sustainability is the foundation for
today’s global framework for international cooperation.
17 Sustainable Development Goals
Applicable to all countries around the world, the Sustainable Development Goals (SDGs) are a
global agenda, adopted by countries as of 2015, enacted by the United Nations General Assembly,
with a vision of ending poverty, protecting the planet and ensuring that all the people enjoy peace
and prosperity. The goals are to be implemented and achieved in every country from the year 2016
to 2030.
A. Consumerism
- Consumerism is a social theory or ideology and economic aspects of capitalism to which
basis for the societal civilization is according to production, marketing, consumption and
distribution of money or currency.
- A social and economic order that encourages the acquisition of goods and services in ever-
increasing amounts. The community is free to choose products and services in the market.
- It has been described through consumerism the continuous pursuit of the people for new,
quality and cheaper products and services. It also demonstrate how people bandwagon in
the shopping malls, fast food and fine dining restaurant, and the patronage to luxury goods.
- According to the critics of consumerism, this has been an economic materialism and selfish
attitude. Consumerism has diminished its value and a waste of money and resources. This
will cause environmental and societal problems and challenges towards attainment of
sustainable development.
- Posterity or the future generation has been endangered through uncontrolled shopping
sprees, establishment of malls, increasing volume of vehicles and production of carbon
dioxide, production of genetically modified organism for meat consumption, mass
production of electronic gadgets, plastic wares and products, and alike which are causing
pollution and destruction to the environment and community.
- Consumerism is a violation to ecological limitation while economy is developing.
Environment and natural resources has been abused and exploited.
- Consumerism is very rampant in the Philippines and has become part of the economic
culture of the Filipino.
B. Energy Sustainability
- Energy sustainability encompasses the providing the needs for energy in the
contemporaneous time, and the assurance of not compromising the needs of the future
generation.
- Sustainable energy refers to any energy which potentially be properly used in the future
without jeopardizing the next generation. This two elements: renewable energy and
energy efficiency.
- Renewable energy is energy that is collected from renewable resources, which are
naturally replenished on a human timescale, such as sunlight, wind, rain, tides, waves and
geothermal heat. Renewable energy includes solar, wind, geothermal, hydroelectric and
ocean energy. These are alternatives foe fossil fuels.
- Energy efficiency simply means using less energy to perform the same task –that is
eliminating energy waste. Energy efficiency brings a variety of benefits: reducing
greenhouse gas emissions, reducing demands for energy imports, and lowering our costs on
a household and economy-wide level.
- Recently, burning and using of fossil fuels (including Carmon, gasoline, petroleum, and
natural gas) as source of energy has been so rampant. Burning of fossil fuels means mass
production of carbon dioxide in the atmosphere. Carbon dioxide is a greenhouse gas which
primarily causes climate change and global warming.
- The comprehensive program and projects of United Nations Development Programme
(UNDP) give way to international and sustainable energy services. These programs focus
on energy access and energy efficiency. These will lead to global development, low-carbon
energy, greener economy, alleviation of poverty, and most especially sustainable
development,
- The Renewable Energy Act of 2008 (RA 9513) is an essential law in the Philippines which
focuses to make 50% the energy production and consumption will be renewable energy-
dependent by 2030.
- By 2013, the Climate Change Commission of the Philippines started to cooperate with
Worldwatch Institutute for a sustainable energy roadmap. It aims to make 100%
renewable-based energy as source of energy that would supply electricity in the next
decade.
Alternative Energy Sources
- Solar energy is the most widespread, safest and most efficient source of renewable energy.
It is usually used through using of solar panels.
- Wind energy is as well commonly used, especially to the seamen in their voyages. Many
companies have invested in production of windmills, wind farms, and energy grids to
advertise and market the use of this alternative energy.
- Geothermal energy is taken beneath the ground through geothermal energy stations. Even
it is limited, it has been the efficient source of electrical power.
- Because the earth is composed of 70% of water (ocean), there is much potential to ocean
energy as a source of sustainable and renewable energy. Waves produce energy through
ocean thermal plants.
- Moreover, rivers and waterfalls are good source of hydroelectric energy.
C. Poverty
- Poverty is not having enough material possessions or income for person’s needs as
multifaceted concept which may include social, economic, and political elements.
- According to World Bank, poverty is hunger, having no shelter, being sickly and having no
means for health services, illiteracy and no access to education, unemployment, unsettled
future, and living stagnantly and contemporaneously.
Types of Poverty
There are six types of poverty according to Eric Jensen’s study from Teaching with Poverty in Mind
(2009)
1. Situational. This particular type of poverty is usually temporary as it involves a crisis or
loss occurring. Events connected with situational poverty include environmental disasters,
divorce, or severe health problems.
2. Generational. This type of poverty involves the birth of two generations into poverty.
Because they were born in this situation, they usually don’t have the tools to help to get
themselves out of it.
3. Absolute. This particular type poverty occurs when people don’t have basic necessities like
roof over their head, food, and water. Their focus in on surviving each day as it comes.
4. Relative. This type of poverty is known as relative because it is relative to the average
standard of living in the person’s society. If family’s income isn’t enough to meet the average
standard of living, they are considered relative poverty.
5. Urban. This type of poverty is only for the metropolitan areas with populations over
50,000. Overcrowding, violence, noise and poor community help programs make it more
difficult for people suffering of this type of poverty to get out of it.
6. Rural. This type of poverty occurs only in rural or specific area. These are areas are
nonmetropolitan with population below 50,000. The low population limits services
available for people struggling financially, and a lack of job opportunities only compounds
the problem.
8 Millennium Development Goals
On September 8, 2000, over the course of the Millennium Summit, eight goals (MDG) were rolled
out and adopted by 189 nations. These goals constitute an unprecedented plan in the global fight
against poverty; that target set for their achievement by December 31, 2015
D. Health Inequalities
- Health Inequalities can be defined as differences in health status or in the distribution
of health determinants between different population groups.
- According to World Health Organization, health inequalities refer to imbalanced
standing of health between people of one country to another.
- Health inequalities are the unjust and avoidable differences in people’s health across the
population and between specific groups of population.
- Health inequalities go against the principles of social justice because they are avoidable.
They do not occur by chance. They are socially determined by circumstances largely
beyond an individual’s control. These circumstances disadvantage people and limit their
chance to live longer, healthier lives.
Social Determinants of Health
Causes of Health Inequalities
As shown in the diagram above, the fundamental causes of health inequalities are unequal
distribution of income, power and wealth. This can lead to poverty and marginalization of
individuals and groups.
These fundamental causes also influence the distribution of wider environmental influences on
health such s availability of work, education and good quality housing. They can also influence
access to services and social and cultural opportunities in an area and in society.
The wider the environment in which people live and work then shapes their individual experiences
of low income, poor housing, discrimination and access to health services. This environment then
shapes individual experiences across the population and leads to the inequalities of health
outcomes.