a. Rising population: West African Population, particularly Nigeria’s population is rising faster than job opportunities. A situation in which birth rate is rising and death rate is falling.
b. Rural Urban Migration and Neglect of Agriculture. In Nigeria for instance, since the oil boom days, there had been a neglect of the agricultural sector and consequent mass exodus of able bodied youths from the rural to the urban areas in search of non-existent white collar jobs. This further reduces employment in agriculture and puts pressure on existing urban jobs.
c. Tremendous Expansion in Educational Opportunities and Investment in Human Capital. There has been a very rapid expansion of primary, posted primary and tertiary education in West Africa which has given rise to an expanded labour market. This has resulted to an influx of thousands of school leavers to the cities in search of wage-employment.
d. Continuous Shortfall in Foreign Exchange Earnings and the resultants fluctuation in the capital expenditure of governments
Because most West African nations are mono cultural economies (exporting of only one commodity) the fall in their prices such as Nigeria’s oil) has led to decline foreign exchange earnings. This has further led to decline in government’s capital expenditure which would have been used to create jobs.
e. The Problem of Alien Influx: As a result of the free movement agreement of the Economic Community of West African states (ECOWAS), there has been a rising influx of foreigners into the relatively richer nations such as Nigeria. In addition, Asians are in great number in West African countries. These aliens take up jobs, sometimes at lower wage rates than could have been taken up by nationals ( Anyanwu, 1995)
f. Pre mature Retirements and Retrenchments most Successive West African governments on the protest of old age, ill health, declining productivity,
148 misconduct and other trivialities such as inability to host the national flag engage in mass retrenchment and premature retirements. The private sector also follows on the ground of lack of raw materials and spare parts. This exercise in Nigeria in 1975, 1984 and 1985 had gone a long way in increasing the number of unemployed in the country.
g. Activities of Multinational Corporation: Most of the multinationals in West Africa only engage in assembling and thus employ only a handful of West Africans. In addition, they adopt high technology methods of production (use of computers and automated machines) thus causing technological unemployment.
h. Non-Revolutionization of Agriculture: The use of crude implements such as hoes and cutlasses had made agriculture both unattractive and unprofitable. This has gone a long way in increasing the volume of unemployment in the sub-region.
SELF ASSESSMENT EXERCISE 4
Discuss the causes of unemployment in developing countries.
3.5 Effects of Unemployment
a. Brain Drain: Unemployment, especially among university graduates, results in emigration of youths to other countries such as advanced nations of Europe and America. This brain drain leads to loss of highly educated and skilled manpower.
b. Increase in Social Vices and Crimes: Frustrated unemployed youths could be a recruiting source of armed robbery, prostitution, economic saboteurs, drug trafficking, smuggling etc.
c. Increased Rural-Urban Migration: Unemployment aggravates rural-urban drift by youths who move to the cities in search of non-existent jobs. This helps also to put pressure on existing food and social amenities in the cities.
d. Fall in National Output: Following Okun’s, law, a 1% fall in employment means a 3% fall in output. Thus, the existence of unemployment means that a nation cannot maximize the use of its labour force increased output.
e. Increased drain on government finance: The presence of unemployment means increased government expenditure for the payment of unemployment benefits in nations where they are paid. The government also spends more for the provision of social services at the same time that it collects less frrm taxes. f. High Dependency Ratio: The mass of unemployment will have to depend on
the small number of the working population for their survival. This will reduce efficiency and savings.
g. Fall in the Standard of Living: Unemployment through the resulting poverty and income inequality reduces the standard of living of the masses.
149 SELF ASSESSMENT EXERCISE 5
Explain the causes of unemployment you know.
3.6 Measures to Fight Unemployment
a. Reduction of Population Rate: Government of West Africa should adopt stiff measures to reduce population growth through family planning, persuasion, coercion, financial incentives and disincentives, legislation and education. b. Tackling the Alien Influx: All illegal aliens in Nigeria and in the West African
sub region should be identified and deported irrespective of their nationalities. c. Fighting Rural-Urban Migration: There should be integrated rural-urban
development programmes, re-orientation of economic activity, social investments and the spread of small-scale labor intensives industries in the rural areas to check rural-urban drift.
d. Modification or the Direct Linkage between Education and Employment: Science, technology and skills appropriate and necessary for our rural development should be emphasized in our educational institutions. Skills inculcated in schools should be relevant to industrial and commercial needs of the countries. The successful implementation of the 6-3-3-4 system of education in Nigeria will help make our graduates job creators rather than job seekers.
e. Diversification of the Base of the Nation’s Foreign Exchange Earnings: Most West African countries should diversify their mono-cultural economies so as to increase their revenues for the creation of job opportunities.
f. Creation of National Employment Schemes: National employment schemes, charged with the responsibility of collating reliable information on the job matter should be created. It will undertake the registration of the unemployed and make placements where openings exist.
SELF ASSESSMENT EXERCISE 6
Suggest other ways/measures of controlling unemployment in Nigeria.
4.0 CONCLUSION
Just like inflation, unemployment is seen as a symptom of basic economic illness or macroeconomic disequilibrium in an economy. This unit so far discussed unemployment as voluntary and involuntary unemployment. Types and causes of unemployment have also been discussed as well as the effects and measures to curb unemployment.
150 5.0 SUMMARY
This unit has analyzed unemployment as a situation or condition being out of work, an activity searching for work, an attitude desiring a job under certain conditions, and a need, needing a job. The unit equally discussed causes of unemployment and effects to include rural-urban migration, brain-drain, social vices and crimes among others. The unit concludes with various measures to control unemployment. The next unit discusses the Philip’s curve, an interaction of inflation and unemployment.
6.0 TUTOR-MARKED ASSIGNMENT
(1) Outline and discuss causes of unemployment in Nigeria. Indentify possible effects of the problem and suggest possible ways in which it can be tackled.
(2) Outline and explain four types of unemployment you know.
7.0 REFERENCES/FURTHER READINGS
Anyanwu, J.C. and Oaikhenan, H.E. (1995). Modern macroeconomics: Theory and
Applications in Nigeria. Joanee Educational Publishers Limited, Onitsha- Nigeria.
Levine, I. (1957). Unemployment by Locality and Industry” in NBER, The Measurement and behavior of unemployment, Princeton University Press. New Jersey.
151 UNIT 3: TRADE OFF BETWEEN INFLATION AND UNEMPLOYMENT (THE
PHILLIPS CURVE)