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Opinions of Saturday, 20 June 2009

Columnist: Baafi, Alex Bossman

Unemployment Is A Killer Disease

By Alex Bossman Baafi

The normal definition that economists use for the number of the labour force unemployed is ‘those of working age who are without work but who are available for work at the current wage rates’. In other words, unemployment refers to that part of the labour force without work that are willing and actively seeking for work.

The figure could be expressed as a percentage of the total labour force. The labour force by definition refers to those in employment plus those unemployed. International Labour Office (ILO) and the Organization for Economic Corporation and Development (OECD) define unemployment as persons of working age who are without work, available to start work within two weeks and actively seeking for employment or waiting to take up appointment.

It stands to reason that these organisations have two weeks target date in mind for people looking for work to get work all other things being equal. For job seekers to have their dreams of getting jobs fulfilled within such a short period of time indicates that we have different worlds on this same earth. In the developing world and for that matter in this country, one could spend his/her whole adult productive life looking for work and may not be successful. This explains why unemployment is killing softly many people in our country not mention what happens in the developing world as a whole.

Unemployment is one of the several macroeconomic variables, including economic growth, inflation and balance of payment that governments all over the world work hard to control. It must be the government’s priority business to ensure that unemployment in the country is as low as possible not only for the sake of the unemployed themselves but also, it represents a drain from the national economy.

The cost of unemployment

The most obvious cost of unemployment is the unemployed themselves. There is the direct financial cost of the loss in earnings (incomes) measured as the difference between their previous wage and nothing in case of those that have lost their jobs as a result of one reason or the other. In the case those adults actively seeking for work but have not chanced on any, the cost is what they could potentially earn at the current wage rate. It is therefore disheartening to hear that people lose their jobs simply because they are not friends, relatives or supporters of successful political office holders.

The point is that, there are the personal costs of being unemployed. The longer the people are unemployed, the more dispirited they may become. Their self esteem is likely to fall and they are more likely to succumb to stress related illnesses. There are also costs to the family and friends of the unemployed. Personal relations can be strained, and there may be an increase in domestic violence and the number of families splitting up will shoot up leading to more broken homes. Let us now talk about the broader costs to the economy. Unemployment represents a loss of output. In other words, actual productivity of the country is below its potential output as a result of waste of human resources. People work abroad and remit their relatives in the country and we become very happy to computer remittances and add it to our national incomes. When are we going to remit others abroad? Where and what have we been doing as governments of this country to bring unemployment at its lowest ebb? Creating more jobs for our jobless cream of the society is an issue of life and death in my humble opinion. Apart from the lack of income to the unemployed themselves, this waste of human resource or under-utilization of our people leads to less income for other people too. For example, companies lose the profits that could have been made has those jobless people had been in employment. This is one of the reasonable reasons why governments in the developed economies move heaven and earth to continuously create jobs for their people in including the foreign residents out of which we benefit substantially as a people and as a nation in the form of remittances.

Have we taken the pain to find out the root causes why our numerous youth put their lives on the line to depend solely on urines as water traveling through the Sahara desert from the country with the hope of reaching Europe as their final destination?

On the national level, the government loses tax revenues since the unemployment pay no income taxes not to mention social security. We have run away from our duty as a nation to provide social benefit of some kind for our many unfortunate jobless masses who are wallowing in abject poverty. Where is any pragmatic plan or programme to reduce unemployment toward the eradication of poverty and underdevelopment? Another cost is that even those in employment lose any additional incomes they could have earned from higher national output through multiplier effect. Unemployment makes the able and the cream in the society lose confidence in themselves and feel inferior even among their own working peers not to mention their own friends and relatives who reside and return from abroad. Some even see white people as superhuman beings and that is the gospel truth. Out of desperation, some of the irresponsible youth hid behind certain political colours to seize toilets, markets, lorry stations, and cars, such disgraceful and acceptable behavior had been witnessed in recent past in the history of this country.

Are we aware that out of abject poverty which also stems from unemployment, part of our culture makes greed respectable? Some of our political and economic leaders want to become rich overnight in order to enjoy some social status of some sort otherwise, what account for our political office holders’ selfishness in looting the state right, left and center whilst tax payers money is taking good care of them? Have we thought about ‘sakawa’ and the driving forces behind it? It is estimated that unemployment rate in the country is around 25%. How reliable is this figure I cannot tell because I found it notoriously difficult to get the accurate and reliable figure. According to 1999 labour statistics, labour force was estimated at 9million and by occupation, 60% went to agriculture, industry 15% with the services sector taken 25%. Unemployment rate was estimated around 20.3% in 2001. Ten years down the line the nation had not make a duty to carry out a comprehensive survey to tell us accurately the number of our labour force and what proportion of our dear ones are unemployed not to mention the underemployed.

The Ministry of Employment and Social Welfare must come out with a statistical data on the subject to inform policy makers to come out with some meaningful job creation actions plans to tackle this underestimated killer disease.

When looking for solutions to the problems of domestic violence, forced marriages and ‘kayayei’ the Ministry of Women and Children Affairs must understand that this killer disease is one of the root cause symptoms and must be taken seriously.

From the forgone statistics, I sincerely believe that investing heavily in the agricultural sector now will be a major critical bold step forward in the right direction.

Unemployment indeed is a serious economic and social problem and a silent killer disease. The earlier the government stopped the blame game and tackled it head on, the better for the better Ghana.