The great recession may be over, but this era of high joblessness is probably just beginning. Unemployment is a crucial problem because when unemployment is high people’s incomes decrease. Now the focus will be on the situation of unemployment in Pakistan and what its economic and social impacts are.
The high growth rate of population is the major cause of unemployment in Pakistan. The creation of job opportunities is not keeping pace with the ever-increasing population. Karachi is the biggest industrial base of Pakistan, but investors are reluctant to invest there because of the constant unrest and violence.
Our educational system is also responsible for increasing unemployment among the educated youth. The attitude of our youth towards the choice of a career is unrealistic and unproductive. The rapid increase in mechanisation and computer technology has added to unemployment.
Unemployment rate in rural areas is higher than that in urban areas because there are fewer opportunities of employment in rural areas.
In Pakistan, unemployment rate is increasing in both rural and urban areas in absolute as well as in percentage terms. Unemployment rate in rural areas is higher as compared to urban areas. The existence of industries provides more opportunities for employment in the urban areas. In rural areas, businessmen are setting up industries due to which people seek employment in the manufacturing sector. The agricultural sector is unable to absorb the unemployed due to its mechanisation. Small-scale industries are not working efficiently due to poor economic conditions. People in the rural areas are not able to find stable sources of earnings. However, large the cost to economy resulting from unemployment, the loss of money does not adequately convey the human, social and psychological toll that periods of persistent involuntary unemployment brings in its wake.
Unemployment has plagued capitalism and understanding its causes and costs has been possible only with the rise of modern macroeconomic theory. It is apparent that recession and the high unemployment caused by recession take a heavy toll of the economy.
The government is taking initiatives towards reducing unemployment. The Prime Minister’s Self Employment Scheme rests on different banks and the Small Business Finance Corporation extending loans to unemployed youths and skilled professionals who have diploma/degree and business experience. Loans are ranging from Rs10,000 to Rs500,000 for small businesses and from Rs500,000 to Rs5,000,000 for small industries, etc. The Small Business Finance Corporation is playing an important role in reducing unemployment.
With all these circumstances at hand not only our government but we as citizens of Pakistan should also take bold steps to control unemployment. The government should make efforts to further increase the process of economic growth. Technical training facilities should be provided. This will give the unemployed a chance to enhance their skills and enable them to earn a reasonable income.