Social Issue Of Unemployment In Canada: Causes, Effects And Solutions

Unemployment in Canada

Discuss about the Social Issue for Unemployment.

Unemployment is that condition of person in which an individual is able to work but he is unable to find work. Usually, unemployment arises because individual does not want to work or he or she is punished by law, but situations changed and now main factors of unemployment includes factors which are not under the control of individual such as seasonal layoffs under jobs related to agriculture, changes occurred in industry related to technology, racial discrimination, absence of adequate skills in worker, and economic fluctuations. As per government view, an unemployed person means someone who does not have job but actively looking for job. Any person who is not searching the job is not included in the category of unemployed person. Unemployment rates include those persons who are working under part time jobs because full time jobs are not available (Casey, 2016). In this paper we state the issue related to unemployment in Canada and possible ways to deal with this issue. At last, we conclude the essay with brief conclusion.

In January 2017, the unemployment rate in Canada was declined to 6.8% from 6.9% in December 2016. There is increase in the full time employment by 15.8 thousand jobs as compared to fall of 0.4% in December. On the other hand part time employment was raised by 32.4 thousand as compare to fall of 0.5% in December. The reason behind this growth in January was jobs created in service sector such as increase in finance, insurance, real estate, and rental and leasing business, building and other support services, transportation and warehousing; and public administration. On the other hand, few jobs are emerged in information, culture and recreation sector (Trading Economics, 2017). 

Inflation and unemployment are those variables which are dependent on each other, and various studies are conducted for the purpose of determining the impact of inflation and unemployment on growth of economy. Wald Model introduced by Cobb – Douglas was used to examine the long term relationship between both the variables. In one study, author conducted Augmented Dickey Fuller (ADF) test for the purpose of assessing the effect of inflation and unemployment on economic growth and result of this study showed that both the variables are stable in nature. A result of ARDL also showed there is long term relationship exists between the variables. Additionally political stability and effective education system also help in reducing the unemployment and it increases the economic growth (Jouzaryan & Mohseni, 2016).

Historical Context of Unemployment

In Canada, unemployment rate related to youth is comparatively higher than adults. In recent years, recession and then subsequent recovery of recession during 2008-2009 is not an exception. Youth unemployment remain high at 16% across the G20 nations and encouraging entrepreneurship is the only solution of this problem (Pinelli, 2014).In 2012, unemployment rate related to youth aged between15-24 was 14.3% as compared to unemployment rate 6% for workers who are under age between25-54.

The main issue of concern in the public is high rate of unemployment among the emerging adults aged upto 18 to 25 years. Because of unemployment there are high chances of depression among the emerging adults as compared to people who are employed. Knowledge related to relationship between unemployment and mental health is very less among emerging adults. As per one survey there are almost 23 % emerging adults were unemployed and almost 12% are depressed because of unemployment. Results of this survey clearly state that unemployment is the biggest reason of depression, and it also state that depression among unemployed are 3 times higher as compared to depression in employed person (McGee & Thompson, 2015, Pp-1). 

Structural unemployment referred to that unemployment which occurred because of changes in customer’s demand and results in growth in one industry and declined in another industry. We can understand this with the help of example that is in Atlantic Canada there is no demand for building the ship because of some changes. This type of unemployment results in regional unemployment because there are number of areas in which people are not able to find new jobs and their old areas are already shut down.

Seasonal unemployment causes because of change in climate and it varies in the Canada regions. There are number of industries which cannot work in winter time such as fishing, construction, and tourism. On the other hand there are number of companies in which demand increases such as ice cleaning. There are some other general examples under which we can see number of peoples is seasonally unemployed such as farming, lumbering and etc. in these areas people are employed for six months and earn well but for other six months they are unemployed when there industry has no work (Catt, 1961).

In 1980, big recession was begins and it mainly hit the manufacturing sector of Canada, and this recession continued until 1985. In case of forest product industry, unemployment increases from 6.4% in 1979 to 19.2% in 1982. In 1982 unemployment rate was 44%. During the period of 1980s and 1990s, resource manufacturing sector of Canada also face major employment loss. In 1964-1973 unemployment rates in G-7 nations for the decade were 3.1% as compared to period 1983-1992 when it was 7.8% (Castells & Aoyama, 1994).

Government Policies and Programs

Employment reduction was not even in all sectors, and Canada was badly affected because it face large reductions in manufacturing employment almost 32% as compared to G-7 average of 24% during the period 1971 to 1991 (Hershel, Kelly, Demers, Teschke & Hertzman, 2001).

There are number of government policies and programs initiated by government such as economic policy, monetary policy and focus on inflation. Economy is the collection of number of customers and firms which are dealing on daily basis to determine the goods and services to be produced such as firms which are supplying various products and consumers which are ultimately consuming that product, and also price paid by consumers to consuming that product.

In case of predominantly market economics such as Canada and the United States, governments play important role at all levels such as they tax number of economic activities for raising the revenue, and then these resources are spend by government on different services such as defense, health care, education, and public housing.

There is case when government are not imposing tax directly on some products but still they access certain level of control by making different regulations in some areas such as product safety, ownership of foreign investors, licenses for television stations, milk production quotas, and minimum wages.

On the other hand Macroeconomics usually focuses on some specific goods and services and their detail instead of focus on some economic attributes such as total output, inflation, unemployment, and economic growth. Macroeconomics Policy includes two policies that are fiscal policy and monetary policy (Bank of Canada, n.d.; WSWS, n.d.).

Fiscal policy includes number of decisions related to taxation, spending, and borrowing. Fiscal policy is set up for all levels that are federal, provincial, and municipal because all these levels have ability to raise revenue by imposing any type of taxation and to spend these resources on different goods and services. Every fiscal policy framed by government has different dimensions especially for federal level because at this level revenue can be raised by imposing different taxes, and these collected resources are spend on different products in different regions and try to generate number of benefits from these resources.

From many years government is trying to deal with unemployment, and after analyzing this topic three theories are identified in this context and how to deal with this issue. First theory related to this topic states that work force is developing more rapidly as compared to job market and this happens because of increase in birth rate, increase in expectations from life, and also increase in the percentage of population which seeks entry in the job market such as women emergence becomes the major part of labor market. The proposed solution relayed to this is to create more jobs and government does this thing by taking steps in subsidies, tax incentives, and directly creates the jobs.

There are many changes in job market which eliminates the many skills which cause many individuals unemployed such as increase in use of computers has unemployed many individuals engaged in clerical jobs. The proposed solution for this issue is to teach the employees with new updated technology and provide them improve marketable skills. We can treated it as disease in which we cannot kill the patient either we should prevent or cure the disease.

Conclusion:

In this paper we state the issue related to unemployment which is the major economic issue in Canada. As we stated above this issue is really the matter of concern in Canada and other parts of the world also and government framed different kind of policies for dealing with this issue that is economic policy, fiscal policy and monetary policy. It is clear from above factors that issue of unemployment must need serious solutions because it also slows down the development of economy in state.

References:

Bank of Canada. The Economy and Economic Policy. Retrieved on 15^th February 2017 from: https://www.bankofcanada.ca/publications/books-and-monographs/why-monetary-policy-matters/1-economy/.

Castells M. & Aoyama Y. (1994). Paths towards the informational society: employment structure in G-7 countries, 1920–90. International Labour Review,  133(1) Pp- 6-33.

Catt, G. (1961). Unemployment in Canada.The Western Socialist. Vol. 28 (6) pages 6-9.

Casey, W. C. (2016). State minimum wage policies and unemployment rates. Retrieved on 15^th February 2017 from: https://www.csus.edu/ppa/thesis-project/bank/2016/whiting-casey.pdf.

Hershler, R. Kelly, S. Demers, P. Teschke, K. & hertzman, C. (2001). Effects of de-industrialization on unemployment, re-employment, and work conditions in a manufacturing workforce.  BMC public health.

McGee, E. R. & Thompson, J. N. (2015). Unemployment and Depression among Emerging Adults in 12 States, Behavioral Risk Factor Surveillance System, 2010. Volume 12 (38).

Mohseni, M. & Jouzaryan, F. (2016). Examining the Effects of Inflation and Unemployment on Economic Growth in Iran (1996-2012). Procedia Economics and Finance, Volume 36, Pages 381-389

Pinelli, M. (2014). 10 Recommendations to Help Reduce Youth Unemployment through Entrepreneurship. Retrieved on 15^th February 2017 from:https://www.forbes.com/sites/ey/2014/09/05/10-recommendations-to-help-reduce-youth-unemployment-through-entrepreneurship/#781c136bf8cf.

Trading Economics, (2017). Canada Unemployment Rate. Retrieved on 15^th February 2017 from: https://www.tradingeconomics.com/canada/unemployment-rate.

WSWS, (2012). Canadian government attacks wages and unemployment benefits. Retrieved on 15^th February 2017 from: https://www.wsws.org/en/articles/2012/05/cana-m28.html.