NATIONAL INSTITUTE OF PUBLIC

ADMINISTRATION

NAME : Nathan Chilufya

STUDENT NUMBER : 29005460

COURSE : Macro Economics

LECTURER : Mr Muleya Joseph Sitali

DUE DATE : 17 November 2022

PROGRAM OF STUDY : BACHELOR OF BUSINESS ADMINISTRATION

EMAIL : nathanchiluya3@gmail.com
Unemployment is the state of an individual looking for a paying job but not having
one. Unemployment does not include full-time students, the retired, children, or those
not actively looking for a paying job. According to recent statistics, approximately
12.85% percent of the labor force is unemployed in Zambia. It is increasing day by
day. Unemployment is not only a social means; its consequences are also far-
reaching. It brings frustration and depression among the youth and purser it to
negative activities. It is one of the cases of robberies, street crime and that lead to
higher poverty rates and poorer neighborhoods that amplify the societal impact of
unemployment in our country.

The foremost problem the world is facing today is unemployment. The ratio of
unemployment is increasing rapidly due to a lack of sources and when
unemployment takes place so many crimes are automatically created. You may find
many graduated masters IT experts, engineers, and doctors wondering about job
opportunities due to bad employment systems. The poverty rate is also at its peak
therefore uneducated and unskilled people can be found easily in Zambia. The
Labour class is also affected by unemployment. Due to unemployment, the living
standard of Zambians is going down with time People are lacking in their basic
needs. Below are the types of employment and how they can be solved

1. Structural unemployment: structural unemployment is the type of

unemployment that happens If there is less capital than the human resource
exists in the economy. The release of new technologies and processes can
lead to structural unemployment when the skills of employees do not match
the demands of the company. While there may be plenty of jobs in the market,
a mismatch between company expectations and employees' skills leads to
such circumstances. The automation process can replace jobs and skills with
the introduction of new technologies, along with less demand for older
technologies. For example, a restaurant may start using new software to
handle customer orders. Then the restaurant will no longer require servers to
physically take orders and convey them to kitchen staff. Since the software
can perform servers' duties, the restaurant no longer requires servers. The
company may lay off these employees since a digital system has replaced
them and their services. This type of unemployment especially affects mid-
aged people who tend to be less proficient in using new technology or lack
 technical skills. structural employment can be solved by ensuring job creation
in our economy. This would include doing things like subsidizing research and
development so that new industries could arise. It would also include making
it easier for businesses to hire new workers. Secondly, we could try to make
sure that Zambian workers had a variety of marketable skills. When people
become structurally unemployed, we could provide them with retraining
opportunities so they could get new jobs.

2. Cyclic unemployment: cyclic unemployment Cyclical unemployment occurs

when the unemployment rate moves in the opposite direction as the GDP
growth rate. So, when GDP growth is small (or negative) unemployment is
high. One primary determinant of the demand for labor from firms shows they
perceive the state of the macroeconomy. If, firms believe that business is
expanding, then at any given wage they will desire to hire a greater quantity of
labor, and the labor demand curve shifts to the right. Conversely, if firms
perceive that the economy is slowing down or entering a recession
businesses will wish to hire a lower quantity of labor at any given wage, and
the labor demand curve will shift to the left. The shift in unemployment caused
by the economy shifting from growth to a recession in the business cycle is
known as cyclical unemployment. When economic output or the business
cycle is low cyclical unemployment will increase. Cyclical unemployment is the
effect of businesses having less demand for workers to employ all those who
are looking for jobs within the business cycle. Most business cycles are
repetitive, with the downturn eventually turning to an upturn again, followed by
another recession, recovery, and so on. Cyclic employment can be stopped,
through the intervention of the government by providing expansionary
monetary policies the policies will ensure the interest rates are lowered. The
result is not only making the payment of loans easier but also increasing
demand since the required confidence gets restored. Additionally, the
expansionary fiscal policy can be applied by the government. it might take
longer because it has to be debated and passed in parliament, as its
acceptance allows more spending, thus raising the budget deficit
3. Frictional Unemployment: Frictional unemployment happens when
employees leave their previous jobs but have yet to find new ones. Most
workers quit voluntarily, either because they need to relocate or because they
have saved enough money to hunt for a better position. Frictional
unemployment also arises when students hunt for their first job or when
mothers return to work. It also occurs when employees are dismissed or, in
certain situations, laid off for business-related reasons, such as a plant
shutdown. The economy that emerged from the COVID-19 pandemic saw
frictional unemployment, for example, when employers asked employees to
return to work in person after they’d worked remotely for many months. Many
employees who preferred to work from home voluntarily left their jobs in
search of roles that better fit their needs. Frictional unemployment is a normal
component of the job-hunting process. Frictional unemployment benefits the
economy by allowing workers to migrate to more productive positions frictional
unemployment can be solved by:-
 Making job information easily available can help to alleviate frictional
unemployment. Employers can accomplish this through a variety of
channels, including online job boards and advertising campaigns. The
sooner potential companies and job seekers exchange employment
information, the faster people find positions that match their
requirements and capabilities.
 Offering flexible hours that allow employees to plan their workdays
around their schedules or according to their most optimal work periods
is typically an appealing incentive other that Allowing employees to
work remotely, which allows them to do tasks even if they do not live in
the same city as the company while also Incorporating part-time or
half-day work choices to assist employees to manage their outside-of-
work commitments and Offering courses in skill development and
training so that employees can improve their talents and potentially
advance in their professions
 To broaden the pool of prospective job seekers, providing relocation
help is an efficient approach to contribute to reduced frictional
unemployment. Reimbursement for moving expenses, relocation
 bonuses, and contributions to an employee's living expenses until they
are settled in their new location are all examples of relocation help.
These tactics assist employees in working during transitional periods
and ensure that businesses can provide the assistance that their
teams require.

4. Natural Unemployment: Natural unemployment is made up of two of the

three types of unemployment: frictional and structural. It explains why, even in
a prosperous economy, there will always be some level of unemployment.
People will always be changing jobs, and they may quit one before finding
another. Some people will always have skills that are no longer required. The
lowest level of unemployment in Zambia was in 2012 at 7.85%. Natural
unemployment in a healthy economy will be between 4.5% and 5%. Natural
unemployment can be solved by:
 Changes in worker productivity influence labor demand, which in turn
influences the natural rate of unemployment. Unexpected increases in
productivity can lead to a larger demand for labor at a given wage rate,
and if the trend continues, the natural rate of unemployment can be
reduced.
 Governments and public policies can have a large impact on the
natural rate of unemployment. Governments can make the job market
more accessible to potential candidates by lowering information costs,
which may reduce frictional unemployment and the time spent looking
for work. and Subsidizing corporate training programs and
encouraging the acquisition of vital practical skills is another action a
government may take to reduce structural unemployment in an
economy, hence lowering the natural rate of unemployment.

5. Seasonal Unemployment: Seasonal unemployment, as the term implies, is

caused by seasonal variations. Employees that are hired during Christmas or
black Friday in supermarkets, and ice cream vendors are among those
affected by seasonal unemployment. It could also include agricultural
harvesters. In most parts of the country, construction workers are laid off
 during the rainy season. School staff is also classified as seasonal laborers.
Season unemployment can be solved by the following
 Subsidizing their commute, increasing their employee discount, paying
for lunch, or awarding a bonus after a good season is all options.
 Make every detail count. Every interaction they have with you, from the
hiring process to the onboarding process, should be carefully planned.
 The greatest strategy to make seasonal employment a win-win
situation is to keep your seasonal staff returning. Retention reduces
your recruiting and training costs while also assisting in the
development of industry leaders. Providing a positive experience and
remaining competitive with industry trends allows you to retain more of
the talent you develop.

6. Classical Unemployment: When real wages, or the cost of employing a

worker, are too high, classical unemployment develops. Because of this,
businesses are unable to hire all available workers. When actual wages are
excessively high, they exceed the profit received by the employer from the
labor provided by the employee. Companies that cannot afford to pay actual
salaries decide not to hire as many individuals as are available. Classical
unemployment occurs when workers negotiate a minimum wage that is higher
than what a firm can afford, making hiring those employees too expensive for
the company and leaving those workers unemployed. Classical employment
can be achieved by cutting down wages. This would increase the demand for
labor and lead to the condition of full employment. “With perfectly free
competition, there will always be at work a strong tendency for wage rates to
be so related to demand that everybody is employed.” Therefore, according to
classical economists, the prices and wages adjust themselves to bring full
employment in an economy.

7. Under unemployment Underemployment differs from unemployment in that it

describes people who are working but aren’t employed at their full capability.
Measuring underemployment shows how effectively the economy is using the
labor force’s skills, experience, and work availability. It is divided into two
 categories of underemployment namely Visible underemployment and
Invisible underemployment. visible underemployment, employees work part
part-time their desire to work more hours. Underemployed people, such as
office employees who can find only part-time roles, may work multiple jobs to
earn the equivalent of a full-time salary. While with Invisible underemployment
individuals who can’t find a job in their chosen field take a job that isn’t in line
with their experience and skills, they represent invisible underemployment.
Their work often pays less than a role that’s more in line with their background
would pay. A person with an engineering degree working at a coffee shop is
an example of invisible underemployment. It can be solved by

 Change in industrial technique: Production techniques should suit the

needs and means of the country. Labor-intensive technology must be
encouraged in place of capital-intensive technology.
 Policy regarding seasonal unemployment: Seasonal unemployment is
found in the agriculture sector and agro-based industries. To remove it:
 Agriculture should have multiple cropping. Plantations, horticulture,
dairying, and animal husbandry should be encouraged.
 Change in the education system: The educational pattern should be
completely changed. Students who have a liking for higher studies
should be admitted to colleges and universities. Emphasis should be
given to vocational education. Qualified engineers should start their
small units.
 Expansion of Employment exchanges: More employment exchanges
should be opened. Information regarding employment opportunities
should be given to people.
 More assistance to self-employed people: Most people in India are self-
employed. They are engaged in agriculture, trade, cottage and small
scale industries etc. These persons should be helped financially,
providing raw materials and technical training.

Both employees and employers have a role in combating unemployment. Workers

can take steps to keep their current jobs while also staying ready for new
opportunities. Businesses, meanwhile, can work to retain their employees
References

1. Bhasin, H. (2020) Cyclical unemployment - definition, causes, and solution,

Marketing91. Available at: https://www.marketing91.com/cyclical-
unemployment/ (Accessed: November 17, 2022).
2. 10 types of unemployment (with reasons and examples) (no date). Available
at: https://in.indeed.com/career-advice/career-development/types-of-
unemployment (Accessed: November 17, 2022).
3. 8 types of unemployment: Understanding each type. (2022, January 20).
Retrieved November 15, 2022, from https://online.maryville.edu/blog/8-types-
of-unemployment-understanding-each-type/
4. Pettinger, T. (2021) Causes of unemployment, Economics Help. Available at:
https://www.economicshelp.org/macroeconomics/unemployment/causes/
(Accessed: November 17, 2022).
5. What causes unemployment? (2018) Economy. Available at:
https://www.ecnmy.org/learn/your-livelihood/unemployment/what-causes-
unemployment/ (Accessed: November 16, 2022).
6. Team, H.E. (2022) What are the causes and effects of unemployment?,
Hirect. Available at: https://www.hirect.in/blog/what-are-the-causes-and-
effects-of-unemployment/ (Accessed: November 17, 2022).
7. Laskor, N.H. (2021) How to solve unemployment problem?, LinkedIn.
Available at: https://www.linkedin.com/pulse/how-solve-unemployment-
problem-nurul-huda-laskor-ashik/ (Accessed: November 17, 2022).