Reduction in the number of employed populations has become a major problem in most of the African, American and Asian countries. In most cases, the federal governments and the private sectors are responsible for the changes in the economy which lead to unemployment. In most cases, the primary causes of unemployment are common for various nations with the effect being felt evenly. The highest numbers of unemployed groups include the young graduates and the older population who are forced to leave office before their age due to adverse life condition. In this case, the country of study is Zimbabwe which has a reported case of 85 percent unemployment rate since 2014.
Background
The unemployment rate is proportional to the economically active population of the country for the groups who are out looking for jobs. There before, the country has engaged in economic reforms that are essential in closing the wide gap of unemployment. However, based on the fact that most of the population in the country leave in the rural areas and are dependent on agriculture, some environmental factors deterred the plans. As a result, the migration rate to the urban sectors has dramatically increased over the years leading to congestion in towns and poor living conditions. An example of the disaster is the drought that occurred in 1995 worsening the living situation of most individuals (Stoeffler et al. 2016). Latest statistics show that the country is still experiencing a high level of unemployment where varying figures between 70-95 percent have been given for various years since 2008 to date.
Various parts of the economy have been affected hindering growth and development. Some of the primary areas of concern include:
Exploitation of labor
-The high unemployment rates have an enormous impact on both the society and the economy of the country. One of the primary effect in that there is exploitation of labor in both the governmental and private sector. Workers are mistreated for the benefit of others in that they have little or no option. The old saying the rich get richer, and the poor get poorer applies in the country where laborers are forced to work for long hours and at low wages which they readily agree in an attempt to secure their positions. Exploitation in the context of global economy comes in where the citizens cannot meet their expected living conditions (Zinhumwe, 2012). The effect is mainly extended from the working individual to the family and society that he lives. In this case, the life expectancy is negatively affected where people are forced to live in a way that they do not wish. The changes have a great impact on their health, mental state, and personal security.
Spending power
-Similarly, the rate of unemployment in Zimbabwe has dramatically affected the economy through the reduction in spending power of the citizens. When the needs are too high as compared to the salary people, tend to spend on the basic needs with limited quantities of purchase. People opt to save other than spend their money on the less important activities. As a result, the rate of government earning through taxation is affected leading to increased government borrowing. Having being rates as one of the countries with the highest level of unemployment, Zimbabwe is also ranked as one of the slowly developing countries (Stoeffler et al. 2016). The reason behind this is because the government has very little left for expenditure on development and growth strategies. When the federal government fails to support their citizens, there is always an increase in both criminal activities and poverty levels. Statistics on the country borrowing rate is as follows:
Year
Rate (percentage)
2009
75
2011
68
2013
70
2015
75
2017
76
Foreign debt: Zimbabwe external debt as a share of GDP.
Recession -When the nation and the government suffer it is more likely that the provision of services will be affected. In this case, the healthcare facilities, personal income rate, standards of living and education facilities are affected. In Zimbabwe, the largest numbers of those affected include the youth. Therefore, the political violence in the country is relatively high. Research shows that it is more likely that the number of unemployed individuals increases as the value for education decreases. The number of youth willing to venture into education decrease where people go out to look for other means to survive. Additionally, this case contributes to the growth of the informal sector where even children are forced to contribute to their family's income. The domestic care and support are lost where parents no longer concern themselves with their children (Rusvingo, 2015). Zimbabwe has acquired high rate of criminal activities due to street stealing, pick-pocketing among other illegal activities. The statistic on the working children and whether working or in school is as follows:
Children
Age
Percent
In school
5-14 years
9
Working
5-14 years
12
Combining work and school
7-14 years
7
Primary completion rate: UNESCO Institute for Statistics, 2012
Weak export performance- export play a very vital role in the economy of any nation in that they influence the level of employment as well as economic growth. Taking an example of the agricultural and mining sectors that makes approximately 70 percent of the country's economy, when people migrate to the urban areas, the export rate is affected. Since the adoption of the multi-currency regime by the country in the year 2009, the Zimbabwean dollar has been overvalued. The effective gap of 45 percent in the year 2014 has been hurting the export competitiveness. The challenge is highly related to the increase in taxes for the export and imports. An increase in exports should translate to a high level of employment for the country.
Trends in datasets
The GDP of Zimbabwe can recently be rated between $600 to $700 a year per capita. The level reflects on a high level of poverty that might strike the country even further. For modern states, the economy must be favorable to both the government and the citizens of the country. As a result, it is more likely that the spending power, exploitation of labor, recession and export performance factors will continue towards negativism. The case is a reflection of what happens when countries fail to prioritize on the major assets of development in their countries. Based on the idea that the country's population is still increasing, it is more likely that the conditions might be more severe.
However, the country can come up with some mechanisms to solve the problem. The federal government should at first consider making changes in the monetary policy where low-interest rates should be fixed. The process encourages borrowing which enhances the cash flow of the country. In this case, families will be enticed to purchase items beyond their basic need which stimulates demand and put the economy back on track. Similarly, it is essential to consider the fiscal policy which acts as a backup regulation to correct a severe recession (Rusvingo, 2015). The government can fix the problem by either cutting down the taxes or stimulate the economy through increased spending. More confidence is needed in the country that the government will change things around. Therefore, the first steps should be made through amendment of the federal policies. A reduction in the tax rates gives businesses and individual more money to spend where they acquire higher capabilities of investing which in return increases the level of employment. A change should also be implemented in the industrial process where labor-intensive technologies should be deployed. Employers should also focus on maximizing the potential of their workers other than exploitation.
Conclusion
Unemployment is one of the leading challenges for most nations which has dramatically affected both their domestic and international performance. For healthy economic growth, a 2-3 percentage rate is expected to be enough in the creation of jobs at different intervals of the fiscal year. When the rate creeps above six percent, it is more likely that the country will be negatively affected by low capabilities of creating new jobs. Zimbabwe is at high risk of poverty on failure to amend the prevailing rate of unemployment in the country. The most appropriate methods to correct the issue can be acquired by first analyzing the current situation of the country.
References
Rusvingo, S. L. (2015). The Zimbabwe soaring unemployment rate of 85%: A ticking time bomb not only for Zimbabwe but the entire SADC region (2014). Global Journal of Management and Business Research.
Stoeffler, Q., Alwang, J., Mills, B., " Taruvinga, N. (2016). Multidimensional poverty in crisis: Lessons from Zimbabwe. The Journal of Development Studies, 52(3), 428-446.
Zinhumwe, C. (2012, March). The youth and unemployment in Zimbabwe. In National Youth Conference under the theme: Building a future with decent work for the young people, Rainbow Towers, Harare, 29th of March.
