UNEMPLOYMENT

Presented by:
Gulam Fatima 23020920-243
Zain Ali 23020920-161
M.Shahbaz 23020920-144
Esha Iman 23020920-162
Kiran shehzadi 23020920-247
Ameerah Naveed 23020920-240
UNEMPLOYMENT IN
PAKISTAN
GE-103
23020920-243
 INTRODUCTION
• Unemployment is a significant issue in Pakistan, affecting many individuals
and families. It occurs when people who are willing and able to work are
unable to find suitable employment opportunities. There are various reasons
for unemployment in Pakistan, including a growing population, lack of
education and skills matching job requirements, limited job opportunities,
and economic instability.
The government and various organizations in Pakistan are working to address
unemployment through initiatives such as skill development programs, job
creation projects, and promoting entrepreneurship. Despite these efforts,
unemployment remains a pressing challenge in the country, impacting the
economy and the well-being of many citizens.
 TYPES:
1. *Structural Unemployment:* This occurs when there is a mismatch between
the skills possessed by the workforce and the skills required by employers. It
often results from changes in technology or shifts in the economy.
2. *Cyclical Unemployment:* This type of unemployment is related to the
business cycle. During economic downturns, businesses may cut jobs, leading
to a rise in unemployment. When the economy improves, this type of
unemployment decreases.
TYPES:
3. *Seasonal Unemployment:* In sectors where demand fluctuates based on
the season, such as agriculture or tourism, seasonal unemployment occurs.
Workers may be unemployed during off-season period.
4. *Frictional Unemployment:* This type of unemployment happens when
individuals are between jobs or entering the workforce for the first time. It is
temporary in nature as people search for better job opportunities.
Each type of unemployment presents its challenges and requires specific
Strategies to address Effectively.
 STEPS TAKEN TO ADDRESS
UNEMPLOYMENT

Improving Education and Skills:

Investing in education and vocational training to match skills with job market
needs.
Countries with higher education levels generally exhibit lower unemployment
rates. Example: Germany's vocational training programs contribute to its low
youth unemployment rate of 5.6% (2023)
Promoting Entrepreneurship:
Encouraging self-employment and new business startups through financial
incentives and support programs.- *Data:* - Small businesses account for
64% of new jobs in the USA over the last two decades .
Strengthening Economic Policies:

Implementing policies that foster economic growth,

such as tax incentives for businesses, infrastructure
investments, and trade policies The American
Recovery and Reinvestment Act (2009) helped reduce
the unemployment rate from 10% in 2009 to 4.1% by
2017

Enhancing Labor Market Flexibility:

Reforming labor laws to make hiring and firing easier,

reducing bureaucratic red tape for businesses.- *Data:*
- Denmark's "Flexicurity" model balances labor market
flexibility with social security, maintaining low
unemployment rates around 3.7% (2023) .
Expanding Public Works Programs:
-Government-funded projects aimed at infrastructure
development, creating temporary employment.
India's Mahatma Gandhi National Rural Employment Guarantee
Act (MGNREGA) provides employment to over 80 million rural
households annually

Encouraging Foreign Investment:

Creating a favorable environment for foreign direct investment

(FDI) to spur job creation.Inward FDI stocks in developing
countries have led to significant employment growth,
e.g., Vietnam's FDI inflows have created over 3 million jobs .
 Causes of unemployment:

Economic recession:
During economic downturns, businesses face reduced
demand for goods and services, leading to layoffs and reduced hiring.

Technological Advancements:
Automation and new technologies can render
certain jobs obsolete, leading to job losses for those whose skills are no longer in demand.

Seasonal Unemployment:
Some industries, such as agriculture or tourism, experience fluctuations
in employment due to changing seasons.

Globalization:
Competition from overseas companies and outsourcing of jobs to
countries with cheaper labor can reduce job opportunities domestically.
Mismatch of Skills:
When there is a gap between the skills that employers need and the
skills that workers possess, it leads to structural unemployment.

Lack of Education and Training:

Individuals without adequate education or vocational training
may struggle to find employment in a competitive job market.
 Zain Ali
23020920-161
Topic: Factors of unemployment
Lack of Skill
 Soft skills_: Deficiencies in soft skills like communication, teamwork, and time
management make it difficult to secure jobs.

Soft skills_: Deficiencies in soft skills like communication,

teamwork, and time management make it difficult to secure
jobs.

Language skills_: Limited proficiency in English and other

international languages restricts job opportunities, especially in
the global market.
Low Wage
 Here are some facts about unemployment and low wages in Pakistan ¹ ²:- In
Pakistan, 80% of unskilled workers are not receiving the minimum wage of
Rs25,000 per month.
 83% of households in Pakistan are not receiving the minimum $2 a day
needed to sustain basic needs.- Minimum Wages in Pakistan increased to
32,000 PKR/Month in 2023 from 25,000 PKR/Month in 2022.-
 The unemployment rate is 6.30 percent.- Unskilled workers are not receiving
the minimum wage, and historical high inflation has exacerbated people’s
suffering.
Lack of Education

 Low literacy rate_: Pakistan has a literacy rate of around 58%, which is one of the
lowest in South Asia.
 2. _High dropout rate_: Many children drop out of school before completing their
primary education, with the dropout rate being higher among girls.

Limited access to education_: Many children, especially in rural

areas, lack access to quality education due to a shortage of
schools, teachers, and resources.
Population Gowth

 Rapid population growth rate_: Pakistan's high population growth rate (2.1% annually)
leads to an increasing number of job seekers.
 2. _Large youth population_: A significant portion of Pakistan's population is young
(around 65% under 25), leading to a high demand for jobs.
 3. _Increasing labor force_: The growing population adds to the labor force,
exacerbating unemployment.
Foreign direct investment
 Corruption*: Corruption is one of the factors that affects FDI in Pakistan, and in turn,
affects unemployment.
 - *Population size*: The rapidly growing population in Pakistan is one of the factors
that affects unemployment.
Interest Rate

 High Interest Rate*: Pakistan's high interest rate of 22% makes borrowing money
difficult for individuals and businesses, leading to unemployment.
 - *Reduced Consumer Spending*: High interest rates lead to higher borrowing costs,
reducing consumer spending and leading to unemployment in industries that rely on
consumer demand.
 - *Reduced Investment*: High interest rates make borrowing money for investment
purposes more expensive, discouraging investment and leading to unemployment
Thank u
 EFFECTS OF
UNEMPLOYMENT
Economic Effects*-

1. Government Spending Increases

: Governments spend more on unemployment benefits, reducing funds for
other services. –
2. Consumer Spending Decreases:
People have less money to spend, leading to a decline in sales for businesses.
–
3. Example: Reduced Demand for Non-Essential Goods: People prioritize
essential items like food and rent over luxury items.
Social Effects*-
4. Rise in Crime Rates: Unemployment can lead to an increase
in theft, vandalism, and other crimes as people struggle
financially.-

5. Negative Impact on Mental Health: Unemployment can

cause stress, depression, and feelings of worthlessness.

6. Example: Increased Stress and Anxiety: The uncertainty of

not having a job can lead to mental health issues.-

7. Impact on Family Relationships: Financial strain can lead

to conflicts and strain relationships within families.
Individual Effects*
- 8. Loss of Skills: Long periods of unemployment can
lead to a loss of skills and decreased employability.-
9. Impact on Physical Health: Stress from unemployment
can contribute to health problems like high blood pressure
and heart disease.-
10. Example: Loss of Confidence: Being unemployed for
a long time can make individuals feel less confident in
their abilities.-
11. Effect on Future Employment Prospects: Extended
periods of unemployment can make it harder to find a job
in the future.