What is unemployment - Have you ever heard of “unemployment”? In society, the term unemployment is commonly used. What is it, actually?
Unemployment is known as not having a job or is a term for those who don’t work or those in the process of searching for a job. Not only that, but unemployment can also be used for those who have a job but are not productive to work.
According to the Central Body of Statistical Data (BPS), the unemployment rate in August 2022 was about 8,42 million. This is an increase of 2 million from its previous number in January 2021. Why does it happen? Let’s find it out!
Also Read: Want A Part-Time Job? Here's How To Prepare For It!
The Cause of Rising Unemployment
1. Low Quality of Education
When applying for a job, we must adjust ourselves to the applied position accordingly based on the requirement needed. For example, if a company needs employees on an undergraduate level, one must possess the qualification first. Or if the company wants employees who are good at operating computers, one must provide proof.
If a job seeker doesn’t have any skills needed in the company, the chance to get the job will automatically become thin. So, we need to get the highest possible degree we can. Because through education, many skills can be acquired.
Someone who went to college will have soft skill and hard skill,. Hence, they can fulfill the requirements needed to apply to a company.
2. The Advance of Technology
Another reason why unemployment happens is because of the advance in technology. Even though it is true that technology can affect us positively, it can also affect us negatively.
Because of technology, many roles that were previously done by humans are replaced by machines. This affects the working chance, which is getting smaller day by day. For example, the toll operator on the highway now that e-toll exists. They are not needed anymore. e-toll.
Therefore, more advanced technology can replace all manually done work.
3. The Imbalance Between The Number of Workers and Job Vacancies
Unemployment is caused by more advanced technology and the imbalance between the number of jobs available and the number of job seekers.
There is high competition between fresh graduates and experienced workers. The balance between the number of jobs and job seekers is not fulfilled hence why the imbalance exists.
The explosion of Indonesia’s civilians also adds to why this happened. Many fresh graduates or others become unemployed while waiting for any job vacancies.
4. The Laying Off of Workers (PHK)
Unemployment can also happen because there is laying off. The reason varies. One may get fired because their contract was up or because of external factors like the Covid-19 epidemic.
The epidemic that has lasted for more than two years has significantly affected the economy. One of them is the number of companies that chose to lay off their employees to avoid bankruptcy. They have to cut the company’s expenses to survive in such times.
Those who are laid off must find new jobs, of course. But it’s not easy, since they have to compete with other job seekers.
5. Global Market Competition
Now, it can not be avoided that much overseas company established their company in Indonesia. It should be opening new opportunities at first, but they prefer recruiting foreign workers to those of Indonesia.
That invokes global competition in our own country, of course. Hence, job opportunities become fewer and fewer, and it creates unemployment.
6. Geographical Problems
Unemployment can also happen because of geographical problems, Whizmates. Generally, a company will build its office in the city. Why? Because they think that the citizens will give them the push they need to develop the company considering the high quality of education there.
Not only that, but the company will also require job seekers to live near their work area. That is why people who live far from the city need help to get a job because of the cost-sink ratio of the transportation they use.
As a result, the imbalance in the jobs number happens. The citizens can get jobs more accessible than those who live in the countryside.
7. Poverty
Unemployment causes poverty. The otherwise can happen as well. Commonly, civilians with a low economy don’t get a chance to get a higher education.
That resulted in the skills one has that needs to be improved in the working society. They will be quickly eliminated compared with other job seekers, since the competition in the active community is fierce.
Now, after knowing the cause of unemployment, what do you think is the negative result of that unemployment? To cease your curiosity, take a look at this explanation.
Adverse Effects of The Increase in Unemployment
1. The Rising in Crime Numbers
One of the causes why crimes exist is because low economy level. Those who need money to pay their debts will do anything to get the money, even through illegal means.
Unemployment will affect the family’s finance and economy. The family’s need will not be fulfilled. That caused the person to turn to thievery, robbery, fraud, and other crimes.
Therefore, the crime numbers will rise because of the pressure to pay living costs while they have no income to turn to.
2. The Chance of Conflict in The Family Risen
This one point is related to the previous one. Some people choose to commit crimes to prevent conflict in their households. Otherwise, there are some who have already had the battle and then committed the crimes as a solution.
As we know, money is an important asset in fulfilling family needs. Everything needs money. If there is no money, conflicts inevitably will happen.
3. The Widening of The Gap in Equality Among The People
Unemployment will also cause a social gap. After all, this is the continual effect of poverty. People will need help to fill their basic needs, like clothes, food, and living space.
Unemployment can affect the gap in food, living spaces, clothes, and education among people. This will only get bigger between societies as time passes by. And it will result in one’s socializing options, which will depend on their social stratification.
4. Lowering One’s Competitiveness
Other than the social gap, unemployment can also affect one’s competitiveness. Unable people tend to give in their way of life, so they will spare no effort in seeking a job.
This pessimism is a result of being rejected many times due to having no skills to offer to the company.
Because there are many people unemployed, the competitiveness in the working society decreases. This can result in the company not getting employees that fit the requirements.
5. The Poverty Number Increases
Someone unemployed needs an income. It will be difficult for them to pay their bills, raising the poverty number higher.
With a higher poverty number, other effects like prosperity will also decrease.
6. Lowering The Gross Domestic Product
Other than causing poverty, unemployment can also be the reason why the GDP is getting lower.
This happens because the rise of unemployment will lower economic activity as well. As a result, the GDP, which is sourced from the tax, will decline.
Also Read: 7 Jobs That Make A Lot of Money, Must Know!
Those are the causes and effects of unemployment. Besides the education quality, learning financial literacy is also essential to lessen the unemployment rate.
By managing your finance, you will get used to allocating your money to other needs. Let’s learn financial literacy through the Whiz Financial App.!
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